A Guide to Solar Panel Grants and Funding in the UK (May 2025)

Written-by

Janet Richardson

Reviewed-by

Richard Burdett-Gardiner

Updated on

Jun 13, 2025

A Guide to Solar Panel Grants and Funding in the UK (May 2025)

If you want to benefit from solar panels but think you can’t afford them there are options available in the UK that provide partial or even full funding for solar panel installations. 

Solar panels can significantly reduce your annual electricity bill, potentially by 50% to 80% or even more so it is worth considering the various solar panel grants, financing schemes, loans and discounts that can really help with the upfront cost.

Depending on the size of your house and the type of panel you choose, solar panels can cost between £4,000 and £10,000 and pay for themselves in as little as 8 years. During this pay-back period you will benefit from lower energy bills and insulate yourself from increasing energy costs. 

We’re going to take a look at the types of grants and funding schemes on offer, their eligibility criteria, benefits and application process, to help you make a green investment in your home. We'll also cover some incentives that have already ended. 

If you’re not sure that any of the current grants are right for you, keep an eye out for future solar panel financial initiatives. According to reports late last year, the government is planning to expand solar panel initiatives that encourage installation of low-carbon technology, particularly focusing on solar panels, to reach its 2030 clean energy targets.

Smart Export Guarantee (SEG)

The Smart Export Guarantee is a government-backed scheme that was launched in 2020 for an indefinite period. It was introduced to essentially replace the Feed-in Tariff. Under the scheme homeowners can receive payments from energy suppliers for any surplus solar generated electricity they export back to the grid.

The scheme includes other small-scale low-carbon electricity generators such as wind turbines, hydro, and others. Energy suppliers with over 150,000 customers must offer a tariff while those with fewer can participate voluntarily.

Though the SEG is not technically a grant it can help increase the savings you make from solar panels and reduce the time it takes to break even. Energy suppliers that are registered as an SEG licensee decide the rate, contract length and any other terms, which SEG homeowners receive.

Payments are calculated by using export meter readings and the tariff rates must always be above zero.

The table below shows the Smart Export Guarantee (SEG) rates for UK Energy Suppliers. 

Energy Supplier	SEG Rate (p/kWh)	Tariff Name	Customer Requirement	Notes
Octopus Energy	31.31 (peak)	Intelligent Octopus Flux	Octopus customers with compatible battery	Time-of-use tariff
Octopus Energy	26.2	Octopus Flux	Octopus customers with battery	Time-of-use tariff
OVO Energy	20	SEG Install Exclusive	OVO customers with battery	Requires installation by OVO
So Energy	20	So Bright	So Energy customers with battery	Requires installation by So Energy
Good Energy	20	Solar Savings Exclusive	Good Energy customers with battery	Exclusive to Good Energy customers
E.ON Next	21	Next Export Premium v2	E.ON Next customers	24 month fixed term
E.ON Next	16.5	Next Export Exclusive	E.ON Next customers	Requires installation by E.ON
British Gas	15.1	Export and Earn Plus	British Gas customers	Higher rate for BG electricity customers
Octopus Energy	15	Outgoing Fixed	Octopus customers	Fixed-rate tariff
ScottishPower	15	SmartGen+	Scottish Power customers	Requires installation by ScottishPower
EDF	15	Export 12m	EDF customers	12 month export tariff
OVO Energy	15	OVO SEG tariff	OVO customers	Standard SEG tariff
ScottishPower	12	SmartGen	None	Requires installation by ScottishPower
So Energy	4.5	So Export Flux	None	Variable rate export tariff
Octopus Energy	4.1	SEG Tariff	None	Flat-rate export tariff
OVO Energy	4	OVO SEG Tariff	None	Standard SEG tariff for non customers
Good Energy	4	Export Only	None	Available to non-customers
British Gas	3.02	Export and Earn Flex	None	Variable-rate export tariff
EDF	3	Export variable	None	Variable-rate export tariff
Utilita	3	Smart Export Guarantee	None	Standard SEG tariff
E.ON Next	3	Next Export	None	Standard SEG tariff
Utility Warehouse	2	UW Smart Export Guarantee	None	Standard SEG tariff
Rebel Energy	1	Snail	None	Variable-rate export tariff

 

* This table is accurate to the best of our knowledge on 08/05/2025. The figures will change often so please check with your energy provider for up-to-date information. 

As you can see the best SEG tariff currently available is Octopus Energy's Intelligent Octopus Flux, which rewards customers with Octopus as their supplier and a compatible battery with 30.31p/kWh during peak hours (4-7 pm) and 22.73p/kWh at other times.

Eligibility Criteria

There are a few criteria that must be met to take advantage of the SEG as follows:

System Capacity
Your solar panel system’s total installed capacity (TIC) must be no more than 5MW. For micro-CHP systems, the capacity limit is 50 kW. 

Smart Meter
You will need a smart meter that provides half-hourly export readings. This enables the energy supplier to accurately track the electricity you export to the grid. Your electricity supplier can usually install one for you if you don’t have one already. 

Certification
Your renewable energy system and installer must be certified by the Microgeneration Certification Scheme (MCS) or a recognised equivalent such as Flexi-Orb. If you do not have an MCS certificate, your installation and installer should be accredited in accordance with EN 45011 or EN ISO/IEC 17065:2012. It’s best to speak to your chosen SEG licensee to understand exactly what information they need from you. 

Location
The SEG scheme is available in England, Wales, and Scotland. 

Other Requirements

You cannot receive SEG payments if you are already receiving payments under the Feed-in Tariffs (FiT) scheme. 
The SEG does not apply to DIY solar panels in the UK unless they have been properly assessed or installed by an MCS certified technician. 

How to Apply for the SEG

Find a SEG supplier
Contact your chosen energy supplier as each one has their own application process. A full list of SEG licensees is available on the Ofgem website. Although you don’t have to get your SEG tariff from your energy supplier, some suppliers will offer higher SEG rates to their own customers. You can change your energy supplier to get the best SEG rate if this is the case. 

Complete the application
Request the application form from your chosen SEG licensee. Complete and submit the form. If you want to join Octopus Energy, for example, you can sign up online and the process takes 2 days to process. 

Read the terms and conditions
SEG suppliers are free to determine the terms of their tariffs, including the payment rate and contract length. 

Check whether your supplier needs an MPAN (Meter Point Administration Number) 
To obtain an MPAN (Meter Point Administration Number), you'll typically find it on your electricity bill. If you don't have a bill, you can contact your electricity supplier or the local Distribution Network Operator (DNO) to request it. 

Photo verification 
You will usually need to take a photo of your first meter reading for your energy supplier. This helps verify the accuracy of your initial export reading and is a standard requirement for most SEG applications. 

Check how payments are made
SEG suppliers offer various payment methods, so clarify the details with your chosen supplier. 

The Energy Company Obligation 4 (ECO4) Scheme

The ECO4 (Energy Company Obligation) scheme came into effect on the 1st of April 2022 and is due to run until March 2026. The ECO4 scheme is aimed at low-income, fuel-poor, and vulnerable households with homes that are poorly insulated and have a low energy efficiency rating (D, E, F, or G). It focuses on improving the least energy-efficient homes and those in fuel poverty. The scheme can also provide up to 100% cover for new solar panel installations. 

The scheme is a government backed initiative. The government has assigned £4m to improve the energy ratings of UK homes and reduce carbon emissions with this scheme. 

Eligibility

Your home needs to meet specific requirements to be eligible for solar PV panel funding via the ECO4 scheme. 

• Your home must require energy efficiency upgrades. Eligibility for this scheme does not depend on how old your property is but is primarily determined by the EPC (Energy Performance Certificate) rating of your existing energy systems. The measures that would benefit your home are decided by a retrofit assessment. 
• The combined gross annual household income must be below £31,000. 
• You must own your own home and live in it or live in a privately rented home. You will need to obtain permission from your landlord prior to any renewable installation in this case. 
• You should be in receipt of government benefits such as child benefits or income support. 
• You may be eligible if you have an all-electric home (on and off gas) where biomass boilers or District Heat Network have been deemed unsuitable. 

If you are not currently receiving benefits but have a low income you may still be able to qualify for ECO4 under the ECO4 LA Flex. The government is letting councils make decisions on ECO4 grants based on the needs and specific circumstances of people in the area.

LA Flex gives councils the flexibility to determine eligibility criteria in their area. This means that criteria will no longer be limited to benefits or even based on income but instead will take into consideration the circumstances of people in the area (e.g., age, number of occupants, number of children, condition of the house, etc.). This will allow more people in the UK to be able to get solar panel grants.

How to Apply for ECO4 Scheme 

1.    Check your eligibility
You can use an online eligibility checker provided by a participating energy supplier. The energy supplier that you choose may conduct a telephone assessment to discuss your home and energy needs. Energy companies that provide ECO4 measures include:

• British Gas 
• E.ON 
• EDF Energy
• Octopus Energy
• OVO Energy
• Scottish Power
• Shell Energy
• So Energy
• The Utility Warehouse
• Utilita Energy
• E 
• Ecotricity
• Outfox the Market
• ESB Energy 

You’ll need to provide details about any benefits you are receiving, household income and your EPC rating. Qualifying benefits include:

• Income-based job seekers’ allowance
• Income-related employment and support allowance
• Income support
• Pension credit guarantee credit
• Working tax credit
• Child tax credit
• Universal credit
• Housing benefit

You can also contact organisations like the Green Homes Group or Energy Funding Service for help. 

2.    Online Application
Fill out the online application form supplied by the ECO4 provider you have selected. Make sure you have all the necessary documentation and supporting evidence ready. 

3.    Bespoke survey
If your online application is successful and you are considered eligible for ECO4 measures a TrustMark-certified surveyor will visit your home to assess its energy efficiency. The survey will help decide the most suitable energy-saving measures for your home.

4.    Application and installation planning
The application process is usually free. At this point your surveyor will submit your application to your chosen energy supplier for funding approval. If your application is approved, you will be assigned a certified installed. You will also receive a personalised installation plan. 

5.    Installation of energy-efficient measures
Trustmark-registered installers will carry out the work, which may include loft, wall, and underfloor insulation, air source heat pumps, solar panels, or other energy-efficient measures.

Feed-in Tariff (FiT) (Scheme ended in April 2019)

The Feed-in Tariff (FiT) was a UK government scheme that paid homeowners and businesses for generating their own electricity from renewable sources such as solar panels or wind turbines. The scheme was set up with the aim of promoting renewable energy and reducing the UK’s dependence on fossil fuels. If you signed up for the scheme you receive payments for the electricity you generate whether you use it yourself or export it to the grid. The scheme closed to new applicants in April 2019. However, anyone who signed up before that date can still receive FiT payments.

Eligibility Criteria

• The scheme was open to homeowners, businesses, and organisations with eligible renewable energy systems such as solar panels.
• Installations must be certified by Microgeneration certification Scheme (MCS) or the Renewables Obligation Order Feed-in Tariffs (Roo-FiT) process.
• Total installed capacity must be no more than 5 MW or 2 MW for Micro-CHP.
• You need a generation and/or export meter. 
• The installation must be performed by an MCS accredited installer. 
• Do it Yourself installations do not qualify for FiT. 
• You must have an Energy Performance Certificate rating of D or above to qualify for FiT (for higher tariff rates).
• If you have multiple installations, you may be eligible for lower tariff rates. 

How to apply for the Feed-in tariff (Important note: scheme ended in April 2019)

• Install an eligible renewable energy system, such as solar panels, wind turbines, or micro-CHP using a qualified installer.
• Ensure MCS accreditation. The system must be certified by the MCS as this verifies that the installation meets certain standards. 
• Contact your energy supplier to let them know that you want to register for FiT payments.
• Complete an application form likely provided by your energy supplier.
• Sign a contract with the supplier outlining the terms of the FiT payment. 
• Register with Ofgem. Once everything is in order your details will be added to the Ofgem Central FiT Register. 
• At this point, you may need to choose how you'll provide meter readings to your supplier.
• Decide on export tariff. You may have the option of receiving payments for surplus energy exported back to the grid, known as the export tariff. 

0% VAT on solar panels & batteries

From April 2022, the government reduced the 5% VAT relief on energy saving measures to 0%. The VAT free period is set to end in March 2027 so now is a good time to consider installing solar panels. If the VAT on energy saving measures was to return to its original rate of 20% you could be saving 1,000s of pounds by acting now.

The 0% VAT rate also applies to other energy saving materials and equipment such as Air Source heat pumps, Ground Source heat pumps, biomass boilers, Controls for central heating and hot water systems, Draught stripping, insulation and Micro combined heat and power units. As of 1st of February, the 0% VAT also applies to solar batteries. The government is keen to ensure homeowners can save and store as much electricity as possible. Prior to February the 0% VAT only applied to solar batteries installed as part of a solar panel installation. It now also applies to solar batteries as a standalone product. 

Eligibility criteria

• You must use the same provider to supply and install your solar panels to qualify for 0% VAT. However, if you do buy from one supplier and use a different provider to install your solar panels, you will be charged 5% on the cost of installation. 
• You can install other goods/services (e.g. insulation) at the same time, but the primary bulk of the work must be for the energy-saving materials.
• You’ll pay 5% VAT on the cost of any repairs or maintenance after your initial solar panel installation. 

How to Apply for 0% VAT

There is no need to complete any application process. If your energy saving material or equipment qualifies, your installer will automatically apply the 0% VAT. So, all you’ll need to do is find the right installer for the job. 

Home Energy Scotland Grant and Loan

The Home Energy Scotland Grant and Loan was launched in April 2022. It provides homeowners in Scotland a grant, interest free loan or a combination of both to install clean heating systems and energy efficiency measures. Although originally available funding for solar PV, solar thermal and energy battery storage has been closed, and self-builders are no longer eligible starting August 1, 2024. However, applications submitted before June 2024 for solar PV and energy storage will continue to be processed. The scheme remains open for other improvements, including clean heating systems and energy efficiency improvements. Additionally, hybrid heat pumps will no longer be eligible for funding from March 4, 2025. 

Eligibility criteria

• You must be a Scottish homeowner.
• Your home must be heated by oil, coal, LPG, or electric heating and not mains gas.
• Your home must have an energy performance certificate (EPC) between D and G. If you don’t have an EPC, a rating can be provided free of charge. 
• Your household income must meet the low-income threshold (below £36,000) or you must live in the most economically deprived areas (IMD 1-3)

How to Apply for Homes Energy Scotland Grant and Loan

Contact Home Energy Scotland
You can either phone them on 0808 808 2282 (Monday to Friday 8am to 8pm, Saturday 9am to 5pm) or complete the contact form on the Home Energy Scotland website.

Receive advice
Home energy Scotland will talk to you about your property occupancy and personal circumstances. They will help you decide what funding scheme is best for you and explain the key conditions involved. 

Apply for scheme
Your advisor will help you with the application process for the specific scheme you are eligible for. An Energy Performance Certificate (EPC) may be required for energy efficiency improvements. 

Submission and assessment 
Submit your application. Home Energy Scotland will assess your eligibility, and if you are applying for a loan, they will also conduct affordability and credit checks. 

Funding offer
If your application is successful, you will receive a funding offer. You must not start work on any installations until you have received this offer in writing. 

Warm Homes Nest Scheme
The Warm Homes Nest Scheme is available indefinitely. The Welsh Government's Warm Homes Nest Scheme provides free advice and funding to help improve residential energy efficiency. If eligible, homeowners and private renters may even qualify for free home upgrades including solar panel installation. The scheme aims to reduce energy bills, make homes warmer for better health and well-being, and lower the household’s carbon footprint. 

Eligibility criteria

Location
You must live in Wales.

Home ownership
You must own or privately rent your home. If you're a private renter, you'll need your landlord's permission to make energy efficiency improvements. 
Local Authority or housing association properties are not included. 

EPC rating
Your home must have an EPC rating between D and G. 

Low-income or benefit receipt
You must be living on a low income or receive a means-tested benefit such as Universal Credit, Pension Credit, or Housing Benefit. There are defined low-income thresholds for eligibility, which may vary depending on the specific Nest initiative. Qualifying means-tested benefits may include Pension Credit, Income Support, and Universal Credit. 

Health conditions
In some instances, someone in your household may need to have a chronic respiratory, circulatory, or mental health condition.

How to apply for the Warm Homes Nest Scheme

Contact Nest 
Call the freephone number, 0808 808 2244 or request a callback by completing the form on the Nest website. Alternatively, you can email advicewales@est.org.uk. 

Home survey
If eligible, an official contractor will carry out a home survey. The survey will assess your home’s energy efficiency and identify potential improvements.

Tailored package of improvements
Based on the survey, Nest can recommend a tailored package of improvements which could include heating, insulation, and potentially solar panels. 

Accessing the programme
Nest offers free, impartial advice to help you lower your energy bills, increase your income, and reduce your carbon footprint. You may also be eligible for free home energy efficiency improvements. If your home is without heating or hot water boiler repair or replacement may be available. 

The Home Upgrade Grant (HUG) (Scheme has now ended)

The HUG scheme was a government initiative that aimed to deliver £700m in funding between 2023 and 2025. It provides successful local authorities with funding to improve homes in England with energy-efficient upgrades and low-carbon heating which will help with the 2050 net-zero targets set by the government. The HUG (Home Upgrade Grant) Phase 1 ended in September 2023. HUG Phase 2 was scheduled to end in March 2025.

The Warm Homes: Local Grant has now replaced the Home Upgrade Grant (HUG) scheme. The new scheme, which launched in April 2025, offers energy-efficient home improvements to low-income households, expanding eligibility to include homes with gas boilers.

Under the HUG scheme, energy suppliers work in partnership with the successful local authorities to install energy efficient improvements in homes with low incomes and EPC ratings that don’t use gas as their main form of heating. This is where a home's main source of heating is either electricity, oil, coal, or LPG (liquefied petroleum gas) bottles. The goal of HUG is to make homes more energy efficient and cheaper to run.

Eligibility criteria

Income: 
You must be a low-income household. Generally, this means your household income is below £36,000 per year. However, if you live in a specific postcode area or have a member of your household receiving certain benefits, you might be eligible even if your income is higher. 
Energy Performance Certificate (EPC): Your home must have an EPC rating of D, E, F, or G. This indicates the energy efficiency of your home and the measures that can be taken to improve it. You can find your property's EPC rating by searching on GOV.UK. 

Off the Gas Grid: 
You must not have a mains gas heating system. This grant is primarily for homes that rely on other heating systems like electric heating, oil-fired boilers, or other alternative heating sources. 

Local Authority Participation: 
The local authority in which you live must have opted into the Home Upgrade Grant (HUG) scheme. You can find a list of participating local authorities on GOV.UK. 

Property Ownership: 
While not explicitly stated in all sources, it's generally understood that you need to own the property you live in to be eligible. If you live in a private rented property, your landlord can apply if they own four or less properties and contribute to the upgrade costs. 

How to apply for the Home Upgrade Grant (HUG) (Important note: Scheme has now ended)

Check eligibility
Ensure you meet eligibility criteria. Different local councils may have slightly different eligibility requirements, so it's best to check with your specific council. If you don't meet the eligibility criteria for HUG, you may still be eligible for other grants like the Warm Homes: Local Grant or the Boiler Upgrade Scheme. 

Contact Local Council/Energy Provider
Contact your local council or energy provider to express your interest in the Home Upgrade Grant (HUG) program. Some councils may have waiting lists for the grant, so it's important to register your interest early. 
The Home Upgrade Grant Phase 2 is no longer accepting applications, with successful authorities already announced. 

Application
Complete the application form providing all necessary information and documents. 

Home survey
The council will arrange for a qualified surveyor to visit your home and assess its energy efficiency. 

Assessment and approval
The council will review your application and the survey results. If approved, you can proceed with planning your home upgrades.

Installations
The council will work with approved installers to complete the work agreed to improve your home's energy efficiency. 

Warm Homes Plan 

The Warm Homes Plan, specifically the "Warm Homes: Local Grant," officially launched on April 1, 2025. This grant provides energy saving improvements such as new solar installations and low carbon heating to eligible households in England and Wales. The grant is currently available until 2028 for social housing residents, low-income households, and renters. Those eligible will be able to receive up to £30,000 each for green home improvement projects.

This grant, which is delivered by local authorities, aims to improve the energy efficiency of homes and reduce energy poverty. The scheme is a government backed initiative in line with its climate policy to cut carbon emissions and meet its net zero targets. 

Eligibility Criteria:

Low income
The Warm Homes Plan targets households with a gross annual household income of 36,000 or less, those living in deprived areas or those already receiving mean-tested benefits like Universal Credit or Housing Benefit. 

Energy performance
The property receiving a grant must have an EPC (Energy Performance Certificate) rating between D and G. A retrofit evaluation is conducted to determine eligibility.

Ownership
Tenants in social housing properties are eligible for funding to install solar panels and benefit from renewable energy solutions. Owner-occupied households with low incomes are also eligible as well as private renters if they have permission from their landlords.

Location
The property must be in England. 

Council discretion
Regional council discretion is allowed with a flexible approach tailored to community needs, allowing more people to qualify.

How to Apply for Warm Homes Plan: Local Grant 

Check eligibility
Visit the GOV.UK website and use the online tool to see if you meet the eligibility criteria for the Warm Homes: Local Grant. Alternatively, you can contact your local council to verify your eligibility.

Submit application
Apply for funding via the Department for Energy Security and Net Zero’s website or at designated centres in your area. You will need to provide income details or benefit status to prove your eligibility.

Assessment and installation
Once your application has been approved a professional assessor will evaluate your property to make sure it is suitable for solar installation. Certified installers will then complete the installation process.

Solar Together

The "Solar Together" scheme is a group-buying initiative that allows communities including residents and small businesses to buy solar photovoltaic (PV) panels, battery storage, and electric vehicle (EV) charge points at a lower cost than if they were to buy them individually. You can also choose to fit a domestic battery system to store surplus electricity generated by the solar panels and use it when it’s needed. By pooling together their purchasing power, participants can secure more competitive prices from pre-vetted installers. The scheme aims to make clean energy more accessible and affordable, helping households reduce their carbon footprint and save money on energy bills. 

The initiative is owned by iChoosr, which has been running collective schemes for energy-switching and solar panels for more than a decade. They are a group-buying specialist that collaborates with local authorities to deliver Solar Together in different areas, and they also manage the online platform for the scheme. iChoosr's primary role is to support local authorities in delivering Solar Together locally and maintain the online platform. 

Once enough people in a participating council have signed up, solar installers are allowed to enter an auction for the right to do the job, with the lowest bid winning. The scheme aims to secure high-quality solar panels and battery storage at prices lower than those available in the open market. 
Participating installers are vetted to ensure they meet certain quality and reliability standards. 

Here’s a list of installers working with the solar together initiative:

• Project Solar
• CRC Electrical and Renewables Ltd.
• Everyone's Energy UK Limited
• The Eco Roof and Wall Company
• 0800 Repair
• Solar Fast
• Warma UK
• Greener Energy Group
• Effective Home
• Glow Green
• So Energy
• Soly
• SES Building and Energy
• ARC Electrical 

Eligibility criteria

Location
You need to live or work within a local authority that's participating in the Solar Together scheme. Small and medium-sized enterprises (non-domestic) and Commonhold Associations can also participate if they meet the eligibility requirements. You can check which councils are involved on the Solar Together website. 

Property ownership/permission
You must either own your own home or have the necessary permission from your landlord to install solar panels on the roof. 

Roof suitability
The scheme involves a roof survey by an accredited installer to ensure your roof is suitable for solar panels. 

Deposit
A deposit of £150 is required if you decide to go ahead with the installation. 

Planning permission
Some installations may require planning permission, particularly for listed buildings or installations within their grounds. 

How to apply for Solar Together

Search for your local Solar Together scheme
Solar Together's website has a tool to help you find out if your local authority is running a scheme. You can also check your local council's website. 

Register for free
Registration is free and requires details about your property, including roof size, orientation, and electricity usage. 

Reverse auction
Pre-vetted solar installers bid for the work in a reverse auction, where the most competitive offer wins. 

Personal recommendation
After the auction, you'll receive a personal recommendation based on your registration details, including costs and specifications for a solar panel installation. 

Your decision
You then decide whether to accept the recommendation. There's no obligation to continue at this point.

Installation
If you accept the recommendation, the winning installer will contact you to survey your roof and set an installation date.

The Public Sector Decarbonisation Scheme (PSDS) 

The Public Sector Decarbonisation Scheme (PSDS) is primarily designed to benefit public sector organisations by funding energy efficiency and low-carbon measures within their buildings. While the PSDS doesn't directly benefit homeowners, it can indirectly impact them through various ways, such as reduced emissions and potentially lower energy costs for public buildings.

The scheme offers numerous benefits, including reduced carbon emissions from public sector buildings, grant funding for energy efficiency and heat decarbonisation projects, and support for the UK's goal of net zero by 2050. It also promotes sustainable practices and can lead to long-term cost savings. 

Eligibility criteria

To be eligible for the Public Sector Decarbonisation Scheme (PSDS), public sector organisations in England, or those with reserved functions operating in the devolved administrations, must have a building served by a fossil fuel heating system that is at the end of its useful life. They also need to demonstrate how their project will achieve meaningful carbon reductions by replacing the fossil fuel system with a low-carbon alternative. 

How to apply for Public Sector Decarbonisation Scheme (PSDS), financing

To apply for the Public Sector Decarbonisation Scheme (PSDS), you'll need to follow a multi-step process that involves identifying a suitable building, understanding the eligibility requirements, and applying through the Salix Finance website. 

Identify a Suitable Building:

Project Scope:
The PSDS aims to decarbonize heating systems, so you'll need to identify buildings within your organization that are using fossil fuels for heating and that align with the scheme's eligibility criteria. The scheme also provides grants to support energy efficiency which can include the installation of solar panels alongside other measures. like insulation. 

Prioritisation:
Consider buildings based on the condition and age of the existing fossil fuel plant, building retention, and occupation. 

Lease Agreements:
If the building is not owned, ensure you have a long-term lease agreement that places the responsibility for operation and maintenance of building services on the public sector body. 

Understand Eligibility and Project Criteria:

Guidance Notes:
Access the relevant guidance notes for the specific PSDS phase you are applying for (e.g., Phase 4 or Phase 3c) on the Salix Finance website. 

Eligible Measures:
Familiarise yourself with the list of eligible measures, which are categorized into low carbon heating measures, other measures saving direct carbon, measures saving indirect carbon, and enabling measures. 

Subsidy Control Compliance:
If your organisation operates as an enterprise, you'll need to demonstrate compliance with the subsidy control principles. 

Prepare Your Application:

Application Form:
Download the appropriate application form for your project size (up to 30 sites or more than 30 sites) from the Salix Finance website. 

Inputting Measures:
In the application form, input all measures you plan to install, including a breakdown of costs and associated energy savings. 

Carbon Cost Curve:
The application form will automatically generate a carbon cost curve, which you can use to identify a grant value that will likely achieve a competitive grant carbon cost. 

Submit Your Application:

Application Portal:
The application portal will open for a specific period, so ensure you submit your application within the designated timeframe.

Internal Discussions:
Before submitting, conduct internal discussions and decision-making to establish a clear internal governance structure.

Ongoing Monitoring:
Be aware that you will be required to provide monitoring data for three years post-installation to assess the project's effectiveness. 

Solar Finance and Loans 

Although solar panels are much cheaper today than in past years, they are still a significant investment. They can cost anywhere between £3,000 and £10,000 and paying out such large sums of money may not be easy for everyone. If you find yourself in this situation you might want to consider the solar panel finance options available in the UK.

Solar panel financing is a means of investing in solar panels by paying for your system in instalments over an established amount of time, usually between several months and up to 20 years. This allows you to reap the benefits of solar power immediately without having to find the large upfront cost.

However, you should bear in mind that solar finance options usually involve interest rates which could affect you significantly in the long run. Some solar panel companies offer financing options that include a deposit upfront, with the remaining balance settled after installation, often within a short timeframe like a few days. Manufacturers and installers often require a deposit before granting solar panel finance. 

The most common solar panel finance options include monthly payment subscriptions, financing through solar installation companies, taking out personal loans, and making use of government grants and schemes.

Several companies offer solar panel finance, including energy providers, installation companies, and manufacturers. Examples include Octopus Energy, E.ON, ScottishPower, and SolarStyle. Some installers like Deege Solar and SunGift Solar also offer financing through partnerships with financial institutions. Additionally, companies like Perfect Sense Energy and Solarsense provide commercial solar panel finance options. 

Here are some examples of energy providers, installation companies, manufacturers and other companies that offer solar finance options.

Energy Providers

Octopus Energy: 
Octopus Energy offers several solar finance options through partnerships with companies like DivideBuy and Zopa, allowing customers to spread the cost of solar panels and batteries into monthly payments. These options include interest-free loans over 1, 2, or 3 years, as well as longer-term loans with a fixed interest rate. 

Octopus Energy Finance Options 

• 0% Finance: Octopus Energy partners with DivideBuy and Zopa to offer interest-free loans for solar panel installations, allowing customers to pay off the cost over 1, 2, or 3 years. 
• Fixed Interest Loans: For longer terms (5 or 7 years), Octopus Energy provides loans through DivideBuy, with a fixed interest rate of 9.9% APR. 
• "Buy Now, Pay Later" (BNPL): Octopus Energy's partnership with Zopa Bank allows customers to finance the purchase and installation of solar panels, with payment spread over up to 84 instalments (7 years). 
• Green Deal Savings Measures: Octopus Energy also encourages customers to investigate the Green Deal Savings Measures, which may provide additional financing options for solar panel installations. 
• Solar Sharing: Octopus Energy also offers a "Solar Sharing" program where customers can share their excess solar energy with charities, providing another way to contribute to renewable energy while potentially reducing their costs. 

E.ON:
E. ON Next offers flexible financing options for their solar panels, including 0% APR interest-free credit over 36 months. Customers can also choose to pay a deposit and settle the balance within seven days of installation. Alternatively, they can opt to pay in full, which doesn't require a credit check. 

E. ON Finance Options

• 0% APR Finance: E. ON Next offers 0% APR finance options, allowing customers to spread the cost of their solar system over 36 months, with no interest charges. 
• Pay a Deposit: Customers can pay a deposit upfront and then settle the remaining balance within seven days of the installation being completed, which is subject to a credit check. 
• Pay in Full: Customers can choose to pay the full amount upfront, which is a quick and easy process and does not require a credit check. 
• Smart Export Guarantee (SEG) Tariff: E. ON Next also offers an exclusive SEG tariff, which pays customers for the electricity they export back to the grid, according to a news article. 
• ECO4 and other grants: E.ON may be able to offer free solar panel funding through various grants and funding schemes, including the ECO4 scheme, which helps eligible homeowners, private and social housing renters who are on a low income or receiving means-tested benefits. 

ScottishPower:
ScottishPower offers a monthly payment plan, starting at £132.45 a month, for their solar and battery storage installations. This allows customers to spread the cost over 3 to 5 years with no deposit or VAT. 

Key Features of the ScottishPower Solar Finance:

• No Deposit: Customers can begin with no upfront payment. 
• No VAT: The cost of the solar panels and batteries is not subject to VAT. 
• Monthly Payments: Customers can choose to pay the cost of their solar and battery storage system in monthly instalments over a period of 3 to 5 years. 
• Starting at £132.45: Monthly payments begin at £132.45. 
• Partnership with Santander: ScottishPower also partners with Santander, offering loan options for customers, subject to status. 
• Potential for Savings: ScottishPower estimates that homeowners can reduce their electricity bills by up to 92% per year with a solar and battery storage system. 
• Guide Price: Customers can get a guide price for their solar panel installation by providing some basic details.
• Tailored Quote: A tailored quote will be provided after more details about the customer's home are obtained. 
• Final Payment: After installation, ScottishPower will request the final payment, and customers can complete the borrowing options section if they borrowed money from Santander. 

Customers in Scotland may also be eligible for government schemes and grants to help pay for their solar panels. 

Home Energy Scotland:
Home Energy Scotland offers grants and loans for energy-saving home improvements, including solar panels.

SmartGen:
ScottishPower also offers a Smart Export Guarantee (SEG) program where eligible customers can benefit from a variable unit rate and payments every 90 days.

Government Funding:
Homeowners may be eligible for government funding and grants to help pay for their solar panels. 

Installation Companies:

Deege Solar:
Deege Solar has partnered with some of the UK’s leading financial institutions FCA, to offer competitive finance for solar panels along with our other services. Deege Solar’s finance options allow homeowners across the entire UK, install solar panels without the initial upfront cost. Their affordable solar panel loans, means that homeowners can take advantage of the latest Solar PV technology to reduce their bills up to 70%.

Key features of Deege Solar finance

• Get A Solar Panel System Installed with No Deposit Required.
• Easy online application, to find out if you are eligible.
• Pay back for your solar panel investment at a monthly fixed rate.
• Spread the cost of your Solar Panel Installation up to 10 Years.
• Available for all Deege Solar Services with a minimum order spend of £1000.
• Competitive Interest Rates, representative 10.9% APR
• Borrow Up to £50,000 for your dream Solar PV System.
• Flexible Finance Options.
• There is no penalty for early repayment of your solar panel loan.

SunGift Solar: 
SunGift Solar offers various financing options for businesses looking to install solar PV systems, including Power Purchase Agreements (PPAs), solar panel leasing, and government grants and green incentive programs. They also partner with financial institutions to provide solutions that fit individual needs, such as zero upfront cost options and the ability to spread costs over time. 

Financing Options

• Power Purchase Agreements (PPAs): PPAs allow businesses to install solar PV systems without any upfront capital expenditure. SunGift Solar partners with financial institutions to provide this option, allowing businesses to lease their roof and purchase renewable electricity at a reduced rate. 
• Solar Panel Leasing: This option allows businesses to lease solar panels from SunGift Solar, making the installation and ownership of the system less of a burden for businesses. 
• Government Grants and Green Incentive Programs: SunGift Solar assists businesses in accessing available government grants and green incentive programs to help offset the cost of solar panel installations. 
• Zero Upfront Cost Financing: SunGift Solar has offered new finance packages that remove the upfront cost of purchasing solar panels outright, allowing businesses to still enjoy the benefits of solar energy without a large initial investment. 
• Spread the Cost Options: SunGift Solar can also help businesses spread the cost of their solar panel installation over time through various financing arrangements. 

Manufacturers and other companies

SolarStyle:
Offers 0% APR interest-free credit for up to one year or allows a deposit with remaining balance paid within seven days. 

Solar Dynamics Ltd:
Offers a range of financing options for solar panel installations, including hire purchase and asset finance. 

Perfect Sense Energy:
Perfect Sense Energy offers a variety of finance options for solar panel installations, including Self-Funding Asset Finance, Capital Expenditure (CapEx), and Power Purchase Agreements (PPAs), according to their website. These options are designed to help businesses manage the initial costs of solar panel installations and potentially benefit from tax incentives and quicker returns on investment. 

Key features of Perfect Sense Energy finance options

Self-Funding Asset Finance:

• This option allows businesses to make repayments through electricity savings, offering a plan with no upfront cost. 
• Repayment terms typically range from 3 to 10 years, with the possibility of cashflow-neutral or cashflow-positive outcomes depending on the term length and any initial deposit. 
• Shakier terms (3-4 years) may be cashflow-neutral, while longer terms (5-7 years) can be cashflow-positive, particularly with a deposit, where savings from electricity bills exceed finance repayments. 

Capital Expenditure (CapEx):

• Businesses can buy the solar PV system outright using staged payments. 
• This option is suitable for those who want to take advantage of tax incentives and realize an immediate return on investment (ROI). 
• Businesses may be eligible to claim tax relief through capital allowances. 

Power Purchase Agreements (PPAs):

• With a PPA, a third-party provider installs and maintains the solar system, and the business pays only for the electricity generated, often at a lower rate than grid energy.
• This option offers no upfront cost and can benefit businesses by potentially paying 40-60% less for solar power than traditional grid energy, without the responsibility of ownership and maintenance.
• A PPA can be a suitable option for businesses that want to avoid the upfront investment and potential maintenance costs associated with owning a solar system. 

Solarsense:
Provides competitive finance for solar panels and clean energy technologies for businesses, including asset finance, hire purchase, and PPAs.

Eligibility Criteria

Solar Panel Loans:

• UK Residency and Property Ownership: Most lenders require you to be a UK resident and own the property where the panels will be installed.
• Employment: Some lenders may also require you to be in full-time employment. 

Other Financing Options:

Credit Score: Your credit score can impact your options and interest rates. Those with lower credit scores may face higher interest rates or be denied.
•    Financial Advisor: It's recommended to consult with a financial advisor to assess your affordability and determine the best financing option for your situation. 

How to apply for solar panel financing

Evaluate Your Financial Situation:
Assess your income and expenses:
This includes mortgage or rental payments, other debts, and your overall budget.

Check your credit score:
Your credit score will impact the types of loans and interest rates you're eligible for.

Determine your affordability:
Consider how much you can comfortably afford for monthly payments on a solar panel loan. 

Consider your long-term goals:
Think about how solar panels will impact your energy bills and how they might benefit you in the future. 

Research Financing Options:

Solar panel loans:

These are specifically designed for solar panel installations and can be offered by lenders like banks, credit unions, or specialized solar financing companies. 

Mortgage options:
You might be able to include the cost of solar panels in your mortgage or refinance your existing mortgage to incorporate solar financing. 

Government schemes:
Explore options like the Energy Company Obligation (ECO) scheme, which may provide funding or grants for solar panel installations for eligible homeowners. 

Green finance:
Some banks offer green loans or green mortgages specifically for environmentally friendly projects like solar panels. 

Leasing:
Solar leasing allows you to use solar panels without buying them outright, but you'll typically pay a monthly fee to the leasing company. 

Get multiple quotes: 
Compare quotes from different solar installers to ensure you're getting a fair price for your solar panel system. 

Apply for Financing:

• Gather necessary documents: This might include bank statements, income verification, property details, and quotes from solar installers.
• Complete the application: Apply through the lender's website or by working with a financial advisor.
• Consider a loan or mortgage advisor: They can help you navigate the application process and find the best financing option for your situation. 
• Understand the terms and conditions: Carefully review the terms of your loan or lease before signing any agreements.