2023 presents an ideal time for solar panel installation due to soaring energy bills, an 88% drop in solar panel prices since 2010, and growing environmental concerns. While solar panel grants aren’t as abundant, incentives still exist.
According to estimates, the investment pays off in about seven years at current electricity prices, leading to a surge in demand that installers are struggling to meet.
However, the upfront cost, starting at around £5,000 for a mid-terrace house, can be a hurdle. In this article, we’ll talk about how you can find financial assistance to fund your solar panel installation.
How to Know if You’re Eligible for a Solar Panel Grant
Solar photovoltaic (PV) panels fall under the Energy Company Obligation (ECO) scheme which is a government initiative aimed at assisting low-income households with sustainable heating solutions.
Since its launch in 2013, over 2.4 million UK homes have benefited from free and discounted measures, including cavity wall insulation, biomass boilers, and solar panels.
The ECO scheme requires energy companies to enhance the energy efficiency of poorly insulated homes, and eligible households can apply directly to these companies for grants. Under the current phase, ECO4 (introduced in spring 2022, replacing ECO3), certain criteria must be met:
- Home with an Energy Performance Certificate (EPC) of D or below
- Annual household income less than £31,000
- Receipt of at least one eligible benefit, such as child benefit, pension guarantee credit, JSA, income support, tax credits, universal credit, or housing benefit
- Homeownership or landlord’s permission for improvements
However, priority is given to green energy solutions under ECO4, with a particular emphasis on repairing boilers and installing greener heating systems like heat pumps and biomass boilers.
Applying for a Grant
To avail of the ECO4 scheme, you simply need to contact an energy supplier participating in the program; it doesn’t even have to be your own supplier.
During the application process, you’ll be required to provide information about your income, benefits, and your property’s energy efficiency rating.
Following your application, an installer will schedule a visit to assess your home’s suitability for the grant. The level of support you receive depends on both the supplier and your individual circumstances.
Do Interest-Free Loans Exist?
Securing an interest-free loan for a solar panel installation is uncommon outside of Scotland. Financing options from banks and energy companies typically involve APR interest rates of approximately 9-10%.
For instance, borrowing £5,000 with a seven-year loan term could result in repaying around £7,000.
While cheaper options exist, they vary based on geographical location. In the South West, for instance, homeowners can apply for a low-interest energy efficiency loan through Lendology which is a not-for-profit organization working with local authorities.
Although not entirely free, with a typical APR of 4.2%, it offers a more affordable alternative compared to banks and energy companies.
Previously, small businesses in Wales could benefit from interest-free loans for solar panels through the Energy Efficiency Loan Fund, which assisted over 700 businesses in transitioning to renewable energy. Unfortunately, this scheme closed in 2021.
