How UK homeowners can finance solar panels in 2026, from government grants and bank cashback to Hometree, Sunsave, green mortgages and the new Warm Homes Plan.
How UK Homeowners Can Finance Solar Panels in 2026
Installing solar panels is one of the best long-term investments a homeowner can make. But the upfront cost, typically between £8,000 and £15,000 for a full system with battery storage, stops many people in their tracks.
The good news is that the landscape has changed dramatically. You are no longer limited to raiding savings or taking a personal loan. Here is a breakdown of every finance route available right now.
Government Grants and Schemes
Warm Homes: Local Grant
This is the headline government grant in 2026. Launched in April 2025 as part of the Labour government's Warm Homes Plan, eligible households can receive up to £15,000 to cover energy-efficiency improvements such as solar panel installations, and a separate £15,000 grant towards a low-carbon heating solution such as a heat pump. The grant is available to households across England.
It is means-tested and targeted at lower-income households, so it is not open to everyone. Check with your local council to confirm eligibility criteria in your area.
What Happened to ECO4 and ECO5?
ECO4 (Energy Company Obligation Phase 4) ran from April 2022 and was the main government scheme providing free or heavily subsidised solar, insulation and heating upgrades to low-income and vulnerable households. It targeted homes with an EPC rating of D or below and was accessed through energy suppliers.
ECO4 has now been extended and runs until December 2026. ECO5, which many in the industry expected to follow, has been cancelled. The government has confirmed there will be no ECO5 phase. Instead, the ECO framework has been wound down and replaced by the broader Warm Homes Plan, which channels funding through local authorities rather than energy suppliers.
If you were hoping to qualify for ECO4, the window is still open but closing. Contact a participating energy supplier directly to check eligibility before the December 2026 deadline.
Home Energy Scotland Grant and Loan
Scottish homeowners have a separate route. The Home Energy Scotland Grant and Loan provides a total of £6,000, made up of a £1,250 grant and an optional £4,750 loan. To qualify, you must live in a home not connected to the main gas network and have an EPC rating between D and G.
Wales: NEST Scheme
The Welsh government's NEST scheme supports fuel-poor households with energy improvements including solar. Contact the Energy Saving Trust Wales or your local authority for current eligibility.
Northern Ireland
There is currently no equivalent solar grant scheme in Northern Ireland.
Tax Incentives
0% VAT on Solar Installations
All UK homeowners benefit from zero VAT on solar panel materials and installation until 31 March 2027, when the rate returns to 5%. On a typical installation, that saving is worth over £1,000. This applies to supply-and-install packages from certified MCS installers, not to components purchased separately.
It is not a grant, but it is effectively money off the price you are quoted. Do not overlook it.
Smart Export Guarantee (SEG)
The Smart Export Guarantee is not a grant, but it is a meaningful ongoing income stream. Every unit of electricity you export back to the grid earns you a payment from your energy supplier. Current maximum tariff rates are around 30p per kWh, which adds up over a full year of generation.
To qualify, your system and installer must be MCS certified, and your home must have a smart meter. Once set up, SEG income runs passively for the lifetime of your system.
Bank and Mortgage Products
Green Mortgages and Rate Discounts
Several major lenders now offer incentives for homes with high energy efficiency ratings. Barclays, NatWest, HSBC, the Co-operative Bank, Santander and Virgin Money all offer either reduced mortgage rates or cashback rewards for properties with an EPC rating of A or B.
If you are planning to remortgage, it is worth asking your lender specifically about green mortgage products and whether a solar installation changes your eligibility.
Cashback From High Street Banks
This is one of the most underused options available. Several banks pay cashback directly to mortgage customers who carry out qualifying energy improvements, including solar:
| Lender | Offer |
|---|---|
| Lloyds Bank | Up to £1,000 cashback via Eco Home Reward |
| Halifax | Up to £1,000 cashback via Green Living journey |
| Barclays | Up to £500 cashback for eligible solar installations |
| HSBC | Up to £750 via Energy Efficient Homes Cashback mortgage |
Eligibility criteria and claim windows vary. Always check current terms directly with your lender before booking installation work, as schemes can change at short notice.
Additional Mortgage Borrowing at 0% Interest
Some lenders allow existing mortgage customers to borrow additional funds at zero interest specifically for energy-efficiency improvements. Nationwide has offered this in recent years, allowing homeowners to borrow up to £15,000 and repay it over five years with no interest charged, while the solar system generates savings from day one. Check whether your lender offers a similar product when you next review your mortgage.
Personal Loans and Green Loans
High street banks including Barclays, NatWest and Lloyds offer personal loans and green-specific loans for home improvements. Online lenders such as Zopa and Lendable can also be worth comparing for quick approvals and clear terms. Credit unions may offer lower rates for members.
Green loans are often earmarked for energy-efficiency purposes and can attract a lower rate than a standard personal loan. They are unsecured, so your home is not at risk, but interest does add to the total cost over the term.
Specialist Solar Finance Providers
This is where things get genuinely interesting for homeowners who do not qualify for grants and prefer not to remortgage. A new category of solar-specific finance company has emerged in the UK, offering zero-deposit plans with long repayment terms specifically designed so that monthly energy savings cover, or exceed, the monthly finance payment from day one.
Hometree Finance
Hometree is currently one of the most established names in this space. Backed by a £300 million facility from Barclays and CPP Investments, the company offers zero-deposit payment plans covering solar panels, battery storage and heat pumps.
Key features of the Hometree Solar Plan:
- No deposit required
- Terms from 5 to 25 years
- System monitoring, maintenance and unlimited repairs included for the plan's lifetime
- No callout fees or excess
- If equipment fails and cannot be repaired, Hometree replaces it at no cost, even after the manufacturer warranty has expired
- You can exit the plan at any time by paying the settlement amount, with no early repayment penalties
- Application takes two minutes online and does not affect your credit score
Hometree Finance is available through accredited installer partners rather than directly to the public. Monthly payments are subject to an annual increase of 2.5%, which is worth factoring into long-term comparisons. Many homeowners find that their energy bill savings exceed their monthly plan payment from the outset, effectively making the switch cost-neutral or better from day one.
Sunsave
Sunsave describes itself as the UK's first FCA-authorised solar subscription service and is a strong direct competitor to Hometree. Founded in 2022, it has raised over £113 million and has been growing rapidly.
Key features of Sunsave Plus:
- No upfront cost
- You own the system from day one (this is not a roof-lease or rent-a-roof arrangement)
- Fixed monthly payment that does not change for the full subscription term
- 20 years of monitoring, maintenance, replacement parts and insurance included
- Most customers find their combined new energy bill plus monthly payment is lower than the energy bill they were paying before
Sunsave Plus is available in England and Wales. If you have a mortgage with Halifax or Lloyds, going solar via Sunsave Plus also makes you eligible to claim their cashback rewards simultaneously.
Octopus Energy and E.ON Next
Both Octopus Energy and E.ON Next have entered the solar finance and installation space with their own bundled packages. These tend to appeal to existing customers of each supplier and are structured differently from Hometree and Sunsave. They are worth comparing directly if you already use either supplier for your energy, as terms and pricing change regularly.
Power Purchase Agreements (PPAs)
A Power Purchase Agreement allows you to have solar panels installed on your property with little or no upfront cost. The provider owns the system and you agree to buy the electricity it generates at a reduced rate compared to grid prices.
The trade-off is that you do not own the panels and therefore do not benefit from SEG export payments. Selling your property can also be more complex if a PPA is in place. PPAs are more common in the commercial sector but residential options do exist, particularly for households who cannot access finance in other ways.
Installer Finance and Buy Now Pay Later
Many solar installers now offer their own in-house finance arrangements or work with consumer credit brokers at the point of sale. Common structures include:
- A 10 to 20 per cent deposit with the remainder spread over months or years
- 0% APR options over 24 months for qualifying installations
- Buy now, pay later arrangements where installation happens first and payments begin after a six to twelve month holiday period
Terms, rates and eligibility vary between installers. When requesting quotes, always ask specifically what finance options are available and what the representative APR is on any offer that is not 0%.
Regional and Local Authority Schemes
Beyond the national picture, many local councils run their own grant or low-interest loan programmes funded through the UK Shared Prosperity Fund or devolved government budgets. These vary significantly by area and change regularly. It is always worth contacting your local council or checking the Simple Energy Advice website to see what is currently available in your region.
Stacking These Options: Getting the Best Deal
The most financially efficient approach is often to combine several of these routes. A few examples of how this works in practice:
- A Lloyds or Halifax mortgage customer using Sunsave Plus gets zero-deposit installation plus £1,000 cashback
- A homeowner remortgaging in 2026 could access 0% additional borrowing from their lender and offset the cost with SEG income from day one
- A household that qualifies for the Warm Homes Local Grant could receive up to £15,000 towards installation at no cost, while also benefiting from the 0% VAT rate and SEG payments going forward
At an absolute minimum, every homeowner going solar right now should take advantage of the 0% VAT rate before it ends in March 2027 and register for the Smart Export Guarantee once panels are installed.
If you are unsure which route fits your circumstances, getting multiple quotes from MCS-certified installers is the right first step. A good installer will walk you through the finance options available to you and help you work out what the real monthly cost looks like once energy savings are factored in.
A note on accuracy: Grant schemes, bank products and finance terms in this area change frequently. Always verify current eligibility and terms directly with the relevant provider before committing to any agreement.