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With the rising cost of electricity and the looming threat of climate change, switching to solar panels, also called photovoltaics, has never been more appealing—until now.
More solar panel grants are available to UK residents than ever. These newer grants have opened up their eligibility criteria, allowing more UK residents than ever to take advantage of incentives like the 0% VAT, Smart Export Guarantee (SEG), ECO4, and the HUG2.
We will explore what these grants offer, who is eligible, and how to apply. Let’s get started!
What Government Grants Are Available for Solar Panels?
Thanks to government incentives designed to help combat the threat of climate change, we now have plenty of government grants and tax incentives available for solar panels in the UK. Some incentives are available to all UK residents, regardless of income, to help lower the cost of installing photovoltaics.Â
Other incentives are designed to help low-income households make the switch, and sometimes, those photovoltaics can be free, depending on your eligibility criteria.
Let’s take a look.
| UK Solar Grants | Run Time | Potential Savings | Eligibility |
| 0% VAT | Apri 2022 to March 2027 | £2,300 (4kW solar panels + battery) | All UK buyers |
| Energy Company Obligation 4 (ECO4) | April 2022 to March 2026 | Partially or fully FREE solar panels | Low-income households |
| Smart Export Guarantee (SEG) | January 2020 to indefinite | Additional £45 to £80 (£440 to £660 total savings) | Any solar panel owner |
| Home Energy Scotland Grant and Loan | June 2023 to indefinite | £6,000 (£1,250 grant + £4,750 optional loan) | Means-tested for low-income or home energy performance |
| Home Upgrade Grant (HUG) | September 2023 to March 2025 | Up to £10,000 dependent on region or property type | Homes with an energy performance rating of D to G |
| Public Sector Decarbonisation Scheme (PSDS) | April 2023 to April 2025 | Regionally dependent | Companies and institutions looking to decarbonise |
0% VAT on Solar Panels & Batteries
Since April 2022, UK homes have benefited from 0% VAT on equipment and installation of energy-efficient systems, including EcoFlow Solar Panels or EcoFlow Solar Generators complete with backup battery systems. Â
Benefits of 0% VAT
A typical 2-3 bedroom home with rooftop photovoltaics could save more than £2,300 on total installation costs for a 3kW to 4kW system with a battery, compared to the original 20% VAT before tax incentives.
In addition to photovoltaics, the 0% VAT applies to other energy-saving materials, including heat pumps, biomass boilers, wind, hydro, insulation, and more.
Eligibility
The new 0% VAT rule opened up eligibility by removing more restrictive eligibility requirements in the previous 5% reduced rate. Now, it includes the equipment and installation of various energy-saving measures, including photovoltaics, heat pumps, biomass boilers, insulation, and more.
How to Apply for 0% VAT
The best part of 0% VAT is that if your equipment and installation qualify, like EcoFlow Rigid Solar Panels such as EcoFlow 400W Rigid Solar Panel or EcoFlow 100W Rigid Solar Panel, your installer will automatically apply the 0% VAT. So, there’s no need to apply; just find a reputable installer and ask them if it’s included.
Smart Export Guarantee (SEG)
The Smart Export Guarantee (SEG) began in 2020, and no end date has been announced. It’s similar to the old Feed-in-Tariff system in that small-scale, low-carbon electricity generators can get paid for surplus electricity they export back to the grid.
It is not a government grant, but they do require all licensed energy suppliers with over 150,000 customers to offer the SEG to their customers, while those with fewer customers can optionally offer it.
Benefits of Smart Export Guarantee
When you produce your own electricity, you can shop around to find the supplier with the best export rates per kWh. Generally, it will be between 1 – 20p per kWh, with an average of about 5.5p. You also have a say in the contract length you sign up for.
Eligibility
All homeowners with photovoltaics are eligible since the limit is a 5MW capacity, which is many times larger than any household solar system.
To be eligible, you must have a smart meter to measure your exports and consumption. Certain suppliers want a say in what equipment you install, so ask them what their requirements are. Note also that DIY solar installations are usually not eligible unless assessed by an MCS-certified technician.
How to Apply for Smart Export Guarantee
To become an SEG Generator, you must find an electricity supplier authorised to offer an SEG tariff. All SEG licensees have their own application process, so you need to apply directly with them.
What Is the ECO4 Grant for Solar Panels?
ECO4 (Energy Company Obligation) replaced the old ECO3 in 2022 and runs until March 2026. It is an improved version of ECO3, offering more flexible eligibility so more people can access it. Under ECO4, the government is offering 1 billion pounds each year to help improve the energy ratings of homes in the UK by installing photovoltaics and heat pumps.
Benefits of ECO4 Scheme
ECO4 helps low-income households replace inefficient heating systems with more environmentally friendly systems, like photovoltaics. Depending on qualifying factors, you will receive partial to complete assistance on purchasing and installing your panels.
The ECO4 is expected to help 450,000 low-income homes upgrade their heating systems. Those households will save about £290 annually on their power bills, or up to £1,600 for the least-efficient homes.
Eligibility
The ECO4 scheme is available to low-income and vulnerable households who meet the following requirements.
- Your income must be less than £31,000.
- You currently have an inefficient heating system within the D-G energy efficiency band.
- All-electric homes (on and off-gas) where biomass boilers or District Heat Network have been ruled out.
- You own and live in your home, or you have permission from your landlord for privately rented homes.
- Must be receiving government benefits like child benefits or income support. However, if you don’t receive benefits but are low-income, you may qualify under the ECO4 LA Flex, which gives local councils the flexibility to determine eligibility in their region, allowing it to be custom-tailored to specific circumstances.
- Northern Ireland residents are excluded from eligibility.
How to Apply for ECO4 Scheme
To apply, you need to contact a participating energy supplier. These include British Gas, Boost, Bulb, Co-Op Energy, EDF Energy, Eon, Octopus Energy, Outfox the Market, Ovo Energy, Scottish Power, Shell Energy, So Energy, SSE, Utility Warehouse, and Utilita.
When you contact them, they will determine your eligibility by asking you a series of questions about your home and heating needs. Then, an installer will visit your home to determine what efficiency installations suit it.
Home Upgrade Grant (HUG2)
The HUG2 is the second phase of the Home Upgrade Grant, available until March 2025. It offers assistance with energy-efficient, low-carbon, renewable power upgrades.
Your local council must approve the precise terms, but installing photovoltaics on your home is an eligible upgrade. If you pass the other eligibility criteria, the council will visit your home and make recommendations to make it more efficient.
Benefits of the Home Upgrade Grant
The amount you may receive heavily depends on your region, so you must check with your local council to find out what you may be eligible for. However, the amount is often substantial, with some residents receiving up to £10,000.
Eligibility
The Home Upgrade Grant is for low-income homeowners with a total household annual income of £39,000 or less before housing costs and bills. They must also be off the gas grid, have an Energy Performance Certificate (EPC) between D and G and live in specific councils.
If your income exceeds £39,000, you can still arrange an interview, and your local authority can decide your eligibility.
If you rent your home, your landlord must apply.
How to Apply for Home Upgrade Grant
You can apply directly on the HUG website if you own your home and your local council participates in HUG2.
How Much Do Solar Panels Cost in the UK With a Government Grant?
With the falling prices of photovoltaics and government grants, purchasing solar panels has never been more appealing. Even without grants, photovoltaics are worth the investment. After the solar payback period, when your power savings pay for the cost of equipment and installation, your electricity is completely free for as much as 20 years.
How much photovoltaics will cost you depends entirely on the system you buy. Before government incentives, an average 3kWh system in the UK costs £5,000-£6,000. For larger homes with higher power needs, a 6kWh system costs around £9,000-£11,000.
You may get partially funded or even free photovoltaics, depending on the grant. The ECO4 gives free photovoltaics to eligible applicants or partial payments for others. Some incentives, like HUG2, will allow up to £10,000 off an eligible system, which means smaller systems can be free.
Finally, the 0% VAT can save £2,300 or more for all UK residents, regardless of income.
Are There Any Other Ways to Finance Solar Panels?
Other ways to finance photovoltaics include home equity or solar loans from your bank and the Barclay Greener Homes initiative.
Barclays Greener Homes
Barclays Greener Home Reward is eligible for first-time claimers with a Barclays residential mortgage who pay by direct debit. This scheme is part of Barclays’s commitment to encouraging energy-efficient home improvements.
You can claim a £1,000 cashback reward when you apply with Barclay Greener Homes directly. You must claim it within nine months of applying and prove that you have bought and paid for your solar system. Barclays also requires solar installers to be registered with TrustMark to ensure high-quality installations.
Which Solar Panel Grants Have Expired?
The UK has been running photovoltaic grants for some time, so older incentives have expired. These include the Feed-In-Tariff system, which expired in 2019, though those who already registered still get the 20 years of savings they signed up for.
The Green Homes Grant expired in March 2021. The Renewable Heat Incentive for owners of biomass boilers, heat pumps, and solar thermal collectors expired in March 2022. The Free Solar Panel Scheme, in which your installer provided a free system in exchange for all your Feed-in-Tariff payments, ended in 2019.
Final Thoughts
Now has never been a better time to invest in clean, renewable power from the sun. The UK is currently offering great government grants and incentives. The 0% VAT means all UK residents can pay no VAT on equipment or installation. Low-income households can take advantage of the ECO4 and HUG2 grants that could provide free or nearly free panels. Finally, you can sign up for the Smart Export Guarantee (SEG) with eligible energy suppliers, where you can sell the excess power you produce back to the grid.
Why not invest in EcoFlow Solar Panels today? Great discounts like these will not last forever.
