Going solar in the UK has never been more affordable, thanks to a combination of government grants, tax breaks, and energy supplier schemes. This guide covers every financial incentive available in 2025 so you can cut the upfront cost of your installation.
Current Solar Panel Grants & Schemes (2025)
| Scheme | What You Get | Eligibility | How to Apply |
|---|---|---|---|
| Zero VAT on Solar | 0% VAT (saving £1,000 on a 4kW system) | All residential properties in GB | Automatic – installer applies it |
| ECO4 Scheme | Partial or full funding | Low-income households, certain benefits (UC, PIP, JSA etc.) | Contact your energy supplier or local authority |
| Smart Export Guarantee (SEG) | 5–15p per kWh exported | Systems up to 5MW, MCS-certified install | Apply to any SEG-licensed supplier |
| Home Energy Scotland | Up to £7,500 grant + £7,500 loan (0% interest) | Scottish homeowners/private tenants | homeenergyscotland.org |
| Nest Scheme (Wales) | Free or subsidised solar panels | Welsh households on means-tested benefits | nest.gov.wales |
| Local Authority Grants | Varies (£500–£3,000) | Check your council website | Contact local council energy team |
Zero VAT on Solar Panels Explained
Since April 2022, the UK government removed VAT on residential solar panel installations. Previously charged at 5%, the rate is now 0% and has been extended through to at least March 2027. This applies to solar panels, batteries, inverters, and associated installation work. On a £6,000 system, that’s a saving of £300 compared to the old 5% rate, or £1,000 compared to the standard 20% VAT.
ECO4 Scheme: Free Solar Panels for Eligible Households
The Energy Company Obligation (ECO4) runs until March 2026 and requires large energy suppliers to fund energy efficiency improvements for low-income and vulnerable households. Solar panels are now included as an eligible measure.
Who Qualifies?
- Households receiving means-tested benefits (Universal Credit, Pension Credit, Child Tax Credit, etc.)
- Properties with an EPC rating of D, E, F, or G
- Homeowners and private tenants (with landlord permission)
- Some local authorities run “flexible eligibility” allowing households just above the threshold
Smart Export Guarantee (SEG)
The SEG replaced the old Feed-in Tariff in 2020 and pays you for electricity you export to the grid. While rates are lower than the old FiT, they still make a meaningful difference to your return on investment.
| Supplier | Tariff Name | Export Rate | Fixed or Variable |
|---|---|---|---|
| Octopus Energy | Outgoing Fixed | 15p/kWh | Fixed |
| British Gas | SEG | 5.6p/kWh | Fixed |
| EDF | Export Reward | 4.0p/kWh | Fixed |
| Ovo Energy | SEG | 4.0p/kWh | Fixed |
| Octopus Energy | Agile Outgoing | Varies (avg 8p) | Variable (half-hourly) |
Home Energy Scotland Grants (Scotland Only)
Scottish homeowners can access some of the most generous solar funding in the UK through Home Energy Scotland. The scheme offers up to £7,500 as a grant and a further £7,500 as a 0% interest loan, meaning you could cover virtually the entire cost of a solar + battery system.
Eligibility:
- Own your home (or be a registered private tenant with landlord consent)
- Property must be your main residence
- EPC band D or below for the full grant amount (higher bands get reduced grants)
- Household income under £44,000 for maximum support
How Much Can You Actually Save?
Here’s a realistic example for a 4kW system in England:
| Item | Cost / Saving |
|---|---|
| System cost (before grants) | £6,500 |
| Zero VAT saving | -£300 (vs old 5% rate) |
| Net cost to you | £6,200 |
| Annual electricity bill saving | £580 |
| Annual SEG income (2,000kWh exported at 15p) | £300 |
| Total annual benefit | £880 |
| Payback period | 7 years |
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Step-by-Step: How to Claim Solar Grants
- Step 1: Check your EPC rating at epcregister.com – many schemes require band D or below
- Step 2: Contact your energy supplier to ask about ECO4 eligibility
- Step 3: Check your local authority website for council-run solar schemes
- Step 4: In Scotland, call Home Energy Scotland (0808 808 2282) for a free assessment
- Step 5: Get 3 quotes from MCS-certified installers – MCS certification is required for SEG and most grants
- Step 6: Once installed, register for the Smart Export Guarantee with your chosen supplier
Frequently Asked Questions
Has the Feed-in Tariff been replaced?
Yes. The Feed-in Tariff closed to new applicants in March 2019. It was replaced by the Smart Export Guarantee (SEG), which pays you for electricity exported to the grid but at lower rates. Existing FiT recipients continue receiving their agreed tariff for the full 20-year term.
Can I get a grant for solar battery storage?
Yes, in some cases. Home Energy Scotland includes battery storage in its grant scheme. ECO4 can sometimes fund batteries as part of a wider package. The zero VAT exemption also covers batteries when installed alongside solar panels.
Do I need to be on benefits to get help?
Not necessarily. While ECO4 primarily targets benefit recipients, some local authorities run flexible eligibility criteria based on postcode, fuel poverty risk, or EPC rating. The zero VAT saving and SEG payments are available to everyone regardless of income.
Will solar grants still be available in 2026?
The zero VAT extension runs to at least March 2027. ECO4 is funded through March 2026 with a possible successor (ECO5) under consultation. The SEG is a permanent obligation on licensed suppliers with no end date. Home Energy Scotland is subject to annual budget allocation.
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