Reduce Your Install Cost With Solar Panel Grants
- All solar panel installs benefit from 0% VAT on purchases (saving 20%), and can use the Smart Export Guarantee to earn money from excess energy generation (typically 4–15p per kWh).
- The ECO4 scheme, for households on qualifying benefits with an EPC rating of D or lower, can fully fund your solar panel installation. Runs until December 2026.
- The Warm Homes: Local Grant offers up to £30,000 free for low income or low energy rated households, which can be used for solar panels. For everyone else there’s low or interest free loans.
- There are local council solar panel grants available in some regions, and you can save 20–30% by using group buying options like Solar Together.
Use Our Free Grant Checker: Input Your Details To See What’s Available
No VAT on solar panel installations for residential properties. Applied automatically by MCS-certified installers.
Get paid typically 4–15p/kWh for electricity you export to the grid. Requires MCS certification and smart meter.
ECO4 Scheme: Free Solar Panels for Eligible Households
Running until December 2026 (recently extended from March 2026) the ECO4 scheme can potentially get you 100% free solar panels. It’s wise to act quickly as it likely won’t run past December, and you have to meet certain criteria:
ECO4 Eligibility Requirements
Check if any of these describe you, if so you might qualify.
- Receiving benefits like Universal Credit, Pension Credit, Child Tax Credit, etc.
- Your home has an EPC rating of D, E, F, or G
- Property owner or private tenant with landlord permission
Important note: ECO4 is now confirmed to run until December 2026, following an extension announced in the November 2025 Budget. Funding is allocated in stages, so early applications are more likely to be successful.
ECO4 Flex: Expanded Eligibility
If you’re not on benefits, there is an alternative version called ECO4 Flex. You could be eligible if:
- A household member has a health condition made worse by cold
- You’ve been in fuel debt for over 13 weeks
- Your local authority identifies you as living in fuel poverty
How to Apply for ECO4
Extended until December 2026: Apply as soon as possible.
If you, or somebody in your household receives a means-tested benefit like Universal Credit, Pension Credit or Child Tax Credit and your home has an EPC rating of D or below you’ll usually qualify.
For ECO4 you simply find an approved installer or energy supplier and they’ll handle the rest. Just let them know you’re eligible. For ECO4 Flex contact your local authority first to get a Local Authority Declaration to start the process.
The installer will send a surveyor to check your property, and make sure you have an electric heating system (required). They’ll also check your roof, then give you the final go-ahead.
If everything’s approved, the MCS-certified installer will install your panels, and collect the payment from the energy company directly (whole process is 2–4 weeks).
Once your system is installed and MCS-certified, you can register for the Smart Export Guarantee (through your energy supplier) to start earning from energy you don’t use.
Warm Homes Plan: The £15 Billion Initiative
Launched in January 2026, the Warm Homes Plan offers fully funded support for low income households, including solar panels and batteries. For everyone else there are low or zero interest loans available.
Warm Homes: Local Grant
The Warm Homes: Local Grant is a new initiative that lets qualifying households get free energy upgrades.
Eligible households can receive up to £30,000 for green home improvement projects. To qualify, you generally need to:
- Have a combined household income under £36,000
- Live in a home with an EPC rating between D and G
- Reside in England
- Receive government benefits (though this isn’t always required)
How to Apply for the Warm Homes: Local Grant
Runs until March 2028: Delivered through your local council.
The WH:LG is delivered locally, around 278 local authorities have secured allocations. Check on GOV.UK or contact your council directly to find out if the scheme is running in your area.
Submit your proof of income (under £36k) with your D–G rated energy certificate, and confirmation of homeowner or landlord consent (landlord may be required to pay 50%).
If you’re approved, a qualified assessor will come to your property and decide which options (solar, heat pumps, battery, insulation) would work best.
Your provider will install up to £15,000 worth of solar, battery, insulation and potentially a further £15,000 for heat pumps. The whole process can take 4–8 weeks.
You’ll receive MCS certification, a new EPC reflecting the improvements, and full documentation. You can then register for the Smart Export Guarantee to earn from any unused solar energy you generate.
0% VAT on Solar Panels: A Saving for Everyone
Unlike the means-tested grants above, the 0% VAT rate on solar panels is available to all UK homeowners. This relief, introduced in April 2022, continues until 31 March 2027.
How Much Can You Save?
With the standard VAT rate sitting at 20%, this relief translates to genuine savings for everyone:
- On a £6,000 solar panel system: approximately £1,200 saved
- On a £9,000 system with battery: approximately £1,800 saved
- On a larger £12,000 installation: approximately £2,400 saved
What’s Covered by 0% VAT?
The relief applies to more than just solar panels. You’ll pay 0% VAT on:
- Solar photovoltaic (PV) panels
- Solar thermal panels
- Battery storage systems (including retrofitted batteries since February 2024)
- Inverters and associated equipment
- Heat pumps
- Insulation materials
The 0% rate only applies when a professional installs your panels. DIY installations don’t qualify for the VAT relief.
What Happens After March 2027?
From 1 April 2027, the VAT rate on solar installations will rise to 5%. While still lower than the standard 20%, this means homeowners installing before the deadline will save an additional 5% on their overall costs.
Smart Export Guarantee: Earn Money from Your Solar Panels
The Smart Export Guarantee (SEG) isn’t a grant in the traditional sense, but it provides ongoing income from your solar panels. You sell your energy back to a supplier, and has no expected end date.
Current SEG Rates in 2026
SEG rates vary significantly between suppliers. As of January 2026, fixed rates typically range from 4p to 15p per kWh, though time-of-use tariffs with battery storage can reach over 30p per kWh during peak periods.
Potential SEG Earnings
Your earnings depend on your system size, electricity usage patterns, and chosen tariff. A typical 4kW system generating 3,500 kWh annually might export around half of that electricity. At an average rate of 12p per kWh, that’s roughly £210 per year in SEG payments.
With higher rates like Octopus Intelligent Flux (which requires a battery), annual earnings could reach £670 or more.
How to Sign Up for SEG
To receive SEG payments, you’ll need:
- An MCS-certified solar installation
- A smart meter capable of recording exports
- An export agreement with a SEG licensee
Your SEG supplier doesn’t need to be your electricity provider. Shop around for the best rates, as they can make a meaningful difference to your returns over time.
Solar Together: Group Buying for Better Prices
Solar Together has an innovative approach to lowering the cost of solar through group buys. They work with local councils and their own marketing channels to create high demand in a focused area, then negotiate bulk discounts.
How Solar Together Works
The process is straightforward:
- 1Registration: Sign up for free through your local council’s Solar Together page, or their website.
- 2Reverse Auction: Pre-vetted installers bid for the group’s work, with the lowest competitive offer winning
- 3Personal Recommendation: You receive a tailored quote based on your property details
- 4Decision: Accept or decline with no obligation, a £150 deposit is required if you accept the price
- 5Installation: The winning installer contacts you to arrange surveys and installation
Typical Savings with Solar Together
Participants typically save 20–30% compared to standard market rates. For a system that might normally cost £10,000, that could mean paying £7,000–£8,000 instead.
In a recent survey of over 2,000 solar panel owners, Solar Together was the most popular funding scheme, with 28% of respondents using it to install their panels.
Is Solar Together Available in My Area?
Solar Together operates in participating council areas across England and Wales. Contact your local council to find out if they have coverage, and when the next auction will take place.
Regional Grants: Scotland, Wales, and Northern Ireland
Beyond UK-wide schemes, each devolved nation offers additional support for solar installations.
Wales: Nest Warm Homes Scheme
The Welsh Government’s Nest scheme has provided free home energy improvements to over 60,000 households since 2011. Solar panels are included in the package of potential improvements.
To qualify for funded improvements, you need to:
- Own or privately rent your home in Wales
- Have an EPC rating of E or less (or D if a household member has an eligible health condition)
- Receive means-tested benefits OR have a household income below defined thresholds
Even if you don’t qualify for funded improvements, Nest provides free energy advice to all Welsh residents. Call 0808 808 2244 for more information.
Scotland: Home Energy Scotland Grant and Loan
Scottish homeowners can access the Home Energy Scotland Grant and Loan scheme. While standalone solar PV funding isn’t currently available, solar PV-T systems (which combine electricity generation with water heating) are eligible.
The scheme offers:
- Grants up to £7,500 for clean heating systems
- Additional grants up to £7,500 for energy efficiency measures
- Optional interest-free loans up to £7,500
- Extra funding (£1,500) for rural and island households
ECO4 remains available in Scotland for eligible households seeking solar panel funding. Contact Home Energy Scotland on 0808 808 2282 for guidance.
Northern Ireland
Unfortunately, grant options are more limited in Northern Ireland. The SEG scheme doesn’t operate there, and ECO4 isn’t available. However, the 0% VAT relief does apply to Northern Irish homeowners until March 2027.
Check with your energy supplier about any export tariffs they may offer voluntarily.
Business Solar Panel Incentives
Businesses installing solar panels in 2026 can benefit from several incentives:
Full Expensing
Write off 100% of the purchase price in the first year until March 2035. Great if you have excess profits you want to write down.
Annual Investment Allowance (AIA)
Write off £1 million annually for qualifying assets, including solar panels. Good if you have unused space to install solar, excess profits and want to capitalise on the Commercial SEG payments.
Commercial SEG
Businesses with solar installations up to 5MW can participate in the Commercial Smart Export Guarantee, creating an additional revenue stream from surplus electricity. These industrial level solar systems can generate £200,000 – £600,000 per year in revenue.
Real-World Grant Examples: What You Could Actually Save
To give you a clear understanding of what solar panel costs with grants applied look like, we have put together these real-world examples:
Frequently Asked Questions
Can I get free solar panels in 2026?
Yes, through the ECO4 scheme, Warm Homes: Local Grant, or regional schemes like Wales’s Nest programme.
What’s the payback period for solar panels?
Most households see payback periods of 7–11 years, depending on system size, energy usage, and whether you have a battery. After this point, your solar panels continue generating free electricity for another 15+ years.
Are solar panels worth it in the UK?
For most homeowners, yes. A typical installation saves £400–£1,000 per year on electricity bills, plus SEG income of £100–£670+. With panels lasting 25–30 years, total lifetime savings often exceed £20,000.
Do I need planning permission for solar panels?
Most residential solar installations are classed as “permitted development” and don’t require planning permission. Listed or heritage buildings might.
Can tenants get solar panel grants?
Private tenants can potentially access ECO4 or Warm Homes: Local Grant funding with their landlord’s permission. The landlord would need to agree to the installation and may need to be involved in the application process.
What happens to my grants if I move house?
If you’ve received grant funding, you’ll benefit while you live there, and the new owners will benefit after you move. This can potentially increase your property’s sale value.
Act Before These Deadlines
Several key incentives have approaching deadlines worth noting:
- ECO4: Ends December 2026 with no planned extension
- 0% VAT: Rises to 5% from 1 April 2027
- Full Expensing (businesses): Available until March 2035
- Warm Homes: Local Grant: Currently funded until 2028
With many grants available, and strong incentives for everyone else, 2026 represents a great time to consider installing solar panels. If you’re serious, and qualify for ECO4 or The Warm Homes: Local Grant the time to act is now, as applications are limited and many councils are already near or at capacity.
