Grants for solar panels in 2023

        With over 1.3 million UK homes already benefiting from solar panels and solar panel costs plummeting by 64% - 82% since 2010, the opportunity to embrace solar energy has never been more affordable. That’s not even taking into account the various grants and schemes offered by the UK government to make solar energy more accessible.

This comprehensive guide explores popular grants and schemes, like ECO4 and Smart Export Guarantee (SEG), that can potentially help you maximise savings even during times of rising living costs.

What Grants for Solar Panels Are Available in the UK?

       The United Kingdom offers several grant schemes to promote solar panel adoption among homeowners and businesses. These grants and incentives are designed to reduce the financial burden of installing solar panel systems, making them an attractive option for those seeking to use renewable energy. 

In this section, we will explore the key grant programs available in the UK in 2023\. Each of these schemes presents unique benefits and eligibility criteria, providing a spectrum of opportunities for those considering solar panel installation.

ECO4 Scheme

       Introduced in July 2022 and set to run until March 2026, the Energy Company Obligation Scheme (ECO4) is a government-funded initiative available in England, Scotland, and Wales. The ECO scheme started in 2013 and is currently running in its 4th and final instalment.

ECO4 focuses on improving energy efficiency in households, with a particular emphasis on homes powered by electricity. Run by energy suppliers, local authorities, and healthcare professionals, the scheme aims to reduce carbon emissions and lower energy bills for eligible households.

 

Companies that offer ECO4 grants:

• British Gas
  
  
• EDF Energy
  
  
• EON
  
  
• Octopus Energy (including Co-op Energy)
  
  
• Outfox the Market
  
  
• Ovo Energy (including Boost and SSE)
  
  
• Scottish Power
  
  
• Shell Energy
  
  
• So Energy
  
  
• Utility Warehouse
  
  
• Utilita

Benefits:

• Substantial Savings: ECO4 can cover up to 100% of the cost of new solar panels, resulting in significant financial relief.
  
  
• Improved Energy Efficiency: Besides solar panels, participants may also benefit from insulation upgrades, further reducing energy consumption.

Eligibility Criteria:

• Household income must be less than £31,000 per year.
  
  
• Referral by an energy provider, local authority, or doctor.
  
  
• Receipt of certain benefits.
  
  
• The home must meet specific insulation requirements (might receive insulation as part of the scheme).
  
  
• Only available for properties with an Energy Performance Certificate (EPC) rating of D or lower.

How to Apply:

1. Contact an energy supplier participating in ECO4.
   
   
2. Undergo a telephone assessment to determine eligibility.
   
   
3. Schedule a home visit for suitability confirmation.
   
   
4. Choose a supplier that best suits your needs.
   
   
5. Complete the application process with the selected supplier.
   
   
   

LA Flex Scheme
 

        If you're not eligible for ECO4, there's an alternative solution: the Local Authority Flexible Eligibility (LA Flex) initiative. LA Flex helps low-income households without benefit eligibility access energy-saving measures. It assists homes falling short of ECO4's criteria, approximately 46.1% of fuel-poor households, according to the ECO4 report.

Benefits:

• Access to Energy Savings: LA Flex helps households not receiving benefits to improve energy efficiency.
  
  
• Diverse Eligibility Routes: Four different routes offer various pathways to qualify for LA Flex.
  
  
• Reduced Energy Costs: Eligible households can expect lower energy bills, improving overall financial well-being.

Eligibility Criteria: Eligibility depends on the chosen route, including factors like income, property energy efficiency, and vulnerability.

Route 1: Qualify if your home's energy efficiency rating (SAP) is D, E, F, or G, and your household income is under £31,000.

Route 2: For owner-occupied or privately rented properties in SAP bands E, F, or G, meet two of the following proxies:

• Reside in a deprived area.
  
  
• Receive a Council Tax reduction.
  
  
• Vulnerable to living in a cold home.
  
  
• Someone in your property receives free school meals.
  
  
• Referred under a local authority scheme.
  
  
• Referred by your energy supplier or Citizens Advice.
  
  
• Have specific pre-payment meter circumstances.

Route 3: Own a property with SAP rating D, E, F, or G, or privately rent a home with SAP rating E, F, or G. Additionally, have a resident with a severe health condition, confirmed by an NHS referral letter.

Route 4: Energy suppliers and local authorities with unique methods to identify low-income and vulnerable homes can submit your property for LA Flex measures to the Department for Energy Security and Net Zero.

Smart Export Guarantee (SEG)

            The Smart Export Guarantee (SEG) is a government initiative introduced in January 2020 in the United Kingdom. It’s designed to encourage homeowners and small-scale renewable energy generators to invest in green technologies by offering financial incentives for excess energy exported to the grid. The SEG can be considered a successor to the Feed-in Tariff (FiT) scheme when it runs its course in October 2023.

The SEG scheme is administered by various energy suppliers in the UK, including:

• Octopus Energy: 15p/kWh
  
  
• Tesla: 10-12p/kWh
  
  
• British Gas: 6.4p/kWh
  
  
• Scottish Power: 5.5p/kWh
  
  
• Shell Energy: 3.5p/kWh

Benefits:

• Financial Rewards: SEG ensures that small-scale renewable energy producers are paid for the surplus electricity they export to the grid, providing a potential income stream.
  
  
• Promotes Renewable Energy: Encourages the adoption of solar panels, wind turbines, and other green energy technologies, contributing to a cleaner environment.
  
  
• Choice of Suppliers: Allows participants to choose from various energy suppliers offering competitive tariffs.
  
  
• Reduced Energy Bills: Enables homeowners to reduce their energy bills by using their own generated electricity and earning from surplus exports.

Eligibility:

• Have a renewable energy system with a capacity of up to 5MW.
  
  
• Ensure your energy supplier offers the SEG scheme.
  
  
• Install a smart meter to accurately measure energy exports.
  
  
• Comply with relevant industry standards and certifications.

How to Apply:

1. Install a renewable energy system (e.g., solar panels).
   
   
2. Choose an energy supplier participating in the SEG scheme.
   
   
3. Install a smart meter to measure energy generation and exports.
   
   
4. Register for SEG with your chosen supplier.
   
   
5. Start exporting surplus energy and receive payments based on your supplier's tariff.
   
   
   
   

The Green Deal

           The Green Deal, launched in 2013 in the United Kingdom, aimed to improve energy efficiency in homes and businesses. The current deal is set to run until 2025. It’s administered by the UK government and designed to provide financial support for energy-saving improvements, which may include:

• Insulation, such as a solid wall, cavity wall, or loft insulation
  
  
• Heating
  
  
• Draught-proofing
  
  
• Double glazing
  
  
• Renewable energy generation, such as solar panels or heat pumps

Benefits:

• Energy Efficiency: Helps reduce energy consumption and greenhouse gas emissions through various home improvements.
  
  
• Financial Assistance: Offers loans and grants to cover the cost of energy-saving measures.
  
  
• Lower Energy Bills: Increases property energy efficiency, resulting in reduced energy bills.
  
  
• Environmental Impact: Contributes to the UK's efforts to combat climate change.

 

Eligibility:

        Eligibility criteria vary, but typically, applicants need to be property owners or tenants with the landlord's consent. Each measure had specific eligibility requirements. However, all premises in England, Scotland, or Wales with an electricity meter are generally eligible.

How to apply:

1. Schedule an assessment with a certified Green Deal Assessor.
   
   
2. Receive a report outlining recommended improvements.
   
   
3. Obtain quotes from Green Deal Providers for the suggested improvements.
   
   
4. Choose a provider and agree to the Green Deal Plan.
   
   
5. Install the recommended measures.
   
   
6. Repay the costs through your electricity bill.
   
   
   
   

Reduced VAT

Reduced VAT is a tax relief scheme in the United Kingdom introduced to promote energy-saving measures. It aims to reduce the cost of certain energy-efficient products and services by eliminating value-added tax for these purchases.

Before this tax break was introduced, VAT for energy-saving products stood at 5%. The VAT rate will return to its original rate on 1 April 2027 when this scheme concludes.

Benefits:

Lower Costs: Reduced VAT rates on eligible products and services make energy-efficient upgrades more affordable.

Eligibility:

Eligibility depends on the specific products or services being purchased, as determined by UK tax regulations.

How to apply:

1. Identify eligible products and services that qualify for reduced VAT rates.
   
   
2. Purchase the qualified items from authorised suppliers.
   
   
3. Verify that the reduced VAT rate is correctly applied during the transaction.
   
   
   
   

Home Upgrade Grant

           The Home Upgrade Grant (HUG) is a government initiative introduced in [Specify Year] in the United Kingdom. It’s currently in its second phase (HUG 2), which will run from April 2023 to March 2025. Its goal is to provide financial assistance to homeowners and landlords to make energy-efficient improvements to their properties, reducing carbon emissions and energy bills.

The grant gives authority to 45 local authorities across England to award grants of up to £10,000 to UK homes.

Benefits:

• Financial Support: Offers grants to cover a portion of the cost of eligible energy-efficient upgrades.
  
  
• Energy Savings: Enhances property energy efficiency, resulting in lower energy bills.
  
  
• Environmental Impact: Contributes to the reduction of carbon emissions.
  
  
• Property Value: Improves property value and comfort.

Eligibility:

• Low-income household
  
  
• Off the gas grid
  
  
• Energy Performance Certificate (EPC) rating between D and G
  
  
• Live in one of the local authority areas listed

Application Guide: 

1. Identify the energy-efficient improvements you want to make.
   
   
2. Check the grant eligibility criteria.
   
   
3. Apply for the Home Upgrade Grant through the relevant local government department or agency.
   
   
4. Complete the necessary documentation and provide proof of project completion.
   
   
5. Receive the grant to offset project costs.

PPA Schemes for Social Housing

Power Purchase Agreement (PPA) schemes for social housing provide an opportunity for social housing providers to adopt renewable energy measures and reduce costs. These initiatives are typically organised and managed by social housing organisations or energy companies.

In effect, it allows a landlord to lease roof space to a solar company to install a solar energy system. The company can then sell the generated electricity to the occupants at a rate they set, but typically much lower than conventional grid electricity. The company can also sell the unused energy by feeding it back into the grid.

The PPA will end after an agreed-upon number of years, at which time the landlord will receive ownership of the solar system.

Benefits:

• Lower Energy Costs: Allows social housing providers to secure affordable and stable energy prices, reducing operational costs.
  
  
• No Upfront Costs: Neither the landlord nor the consumers need to make an upfront capital investment to enjoy solar energy.
  
  
• Community Impact: Generates potential income for social housing organisations, which can be reinvested in community services.
  
  
• Limited Risk: Neither the landlord nor the consumer need to take on the responsibility of maintaining the solar system.

Eligibility:

Eligibility criteria may vary depending on the specific PPA scheme and provider but typically involve social housing organisations or property owners.

How to apply:

1. Research and identify PPA schemes available in your area or through social housing organisations.
   
   
2. Contact the scheme provider or social housing organisation for information on eligibility and participation.
   
   
3. Evaluate the terms of the PPA, including energy pricing and contract duration.
   
   
4. Sign the PPA agreement and work with the provider to install renewable energy systems.
   
   
   

Solar Panels Grants That Are Now Expired

          Since the turn of the century, the UK has invested in numerous incentives to encourage the adoption of solar energy among homeowners and businesses in a bid to meet its aggressive green energy targets. Different grants and schemes have enjoyed various degrees of success, with some evolving into new iterations or phases. Others have either served their purpose or been left by the wayside.

Here are several well-known solar panel grants and schemes that were once available to homeowners and businesses have now expired:

Domestic Renewable Heat Incentive (RHI)

         The Domestic Renewable Heat Incentive (RHI) was introduced to promote the adoption of renewable heating technologies in households. It began on a specified date and closed for new applications on 31 March 2022, subsequently replaced by the Boiler Upgrade Scheme. Administered by the government, its goal was to reduce carbon emissions and energy bills for homeowners.

The RHI provided funding for MCS-certified solar thermal panels. However, this scheme ended in March 2022 as part of the government's transition to the Boiler Upgrade Scheme. Homeowners interested in adopting renewable heating technologies should explore this scheme, which will end in 2028. 

The Boiler Upgrade Scheme offers a £5,000 reduction for air-source heat pumps and a £6,000 reduction for ground-source heat pumps.

Feed-in Tariff

        The Feed-in Tariff (FiT) was a government initiative introduced to incentivise households to generate electricity from renewable sources. It was the first of its kind in the UK and can be considered a predecessor to the SEG scheme. New signups for the scheme concluded on 31 March 2019 for all new applications.

Eligibility Criteria: Unfortunately, the Feed-in Tariff is no longer available for new applicants. It ended primarily because the government wanted to shift its focus toward more commercial and high-impact solar projects. 

Additionally, the cost of solar panels has significantly decreased (by roughly 82% since 2010), making them more affordable for homeowners without the need for substantial subsidies. However, those who signed up before the FiT deadline will continue to receive payments as per their contract terms, usually spanning 20 years.

Green Homes Grant

         The £2 billion Green Homes Grant was initiated to support homeowners in making energy-efficient improvements. However, this scheme ended on 31 March 2021. The grant aimed to help households reduce emissions and energy bills by offering up to £10,000 in funding for improvements.

The Green Homes Grant focused on solar thermal panels as a primary measure. Nevertheless, the scheme was discontinued in March 2021 due to various issues, including a low uptake rate and logistical challenges. 

Only 39,000 vouchers were issued, which represented a mere 6.5% of the original target of 600,000 homes. The rollout faced criticism, and the Parliament's Environmental Audit Select Committee reported that 86% of participants had a poor or very poor experience with the scheme.

Today, there are numerous alternatives to this scheme, including The Green Deal, ECO4/LA Flex, and Home Upgrade Grant.

Various Free Solar Panel Schemes

         Under these schemes, private companies would provide and install solar panels on your property at no cost. In exchange, they would maintain ownership of the panels and collect the Feed-in Tariff (FIT) payments generated by the solar energy system.

One alternative that emerged in the wake of these schemes was the 'solar buyback' option. In this arrangement, companies would offer homeowners a lump sum payment upfront in exchange for the right to collect the FIT payments that the homeowner would have otherwise received. However, homeowners had to carefully assess whether the lump sum offered was worth forfeiting the future FIT payments.

The history of these free solar panel schemes is intertwined with the rise and fall of the FIT. At its inception in 2010, the FIT provided substantial incentives for homeowners to adopt solar energy, with companies essentially covering the costs of installation. However, a significant reduction in FIT payments in 2016 led to a decline in the popularity of these schemes, ultimately resulting in the discontinuation of the FIT initiative in 2019.

While free solar panel schemes are no longer available, homeowners interested in solar energy solutions can explore other options, such as Solar Together programs and regional solar panel initiatives that may offer cost-effective ways to adopt solar technology.

Can I Get Free Solar Panels in the UK?

        Yes, you can still get free solar panels in the UK through the government's ECO4 scheme despite the expiry of numerous popular grants.

The Energy Company Obligation (ECO) scheme is designed to assist low-income households in saving energy, improving home insulation, and reducing carbon emissions. ECO4 specifically offers the opportunity to have fully funded or discounted solar panels installed in your home.

To be eligible for the ECO4 scheme, you need to receive at least one of the following benefits:

• Income-based Jobseekers Allowance (JSA)
  
  
• Income-related Employment & Support Allowance (ESA)
  
  
• Income Support (IS)
  
  
• Pension Credit Guarantee
  
  
• Working Tax Credit (WTC)
  
  
• Child Tax Credits (CTC)
  
  
• Universal Credit (UC)
  
  
• Housing Benefit
  
  
• Pension Credit Savings Credit
  
  
  

         Participating in the ECO4 scheme allows you to harness the benefits of solar energy without the burden of upfront costs. If you meet the eligibility criteria, you can apply for the ECO4 scheme to have solar panels installed in your home.

Other grants can help you save a significant amount on the upfront cost of installing a solar system. Schemes like the SEG, on the other hand, can help you make further inroads into reducing your electricity bill.

The Cost of Solar Panels in the UK

           The cost of solar panels in the UK depends on various factors. 

Panel type plays a significant role, with monocrystalline panels costing £0.80 - £1.20 per watt, while polycrystalline panels are £0.70 - £0.80 per watt, and thin-film panels are £0.55 - £0.80 per watt for a 4 kW system. 

System size also matters; small homes might need 2 kW to 4 kW systems (£1,600 to £4,800), while larger ones require 6 kW to 10 kW systems (£4,800 to £12,000). Installation costs average £500 to £1,000 per kW installed, adding £2,000 - £4,000 to a 4 kW system.

Maintenance expenses are reasonable, with yearly costs of around £100 to £200. Cleaning costs £60 - £300 per session, and repairs range from £100 to £500. Monitoring systems cost £100 - £300, while battery systems range from £2,000 to £6,000.

Taking everything into account, the typical cost of a solar system installation in the UK today is between £2,000 to £12,000.

However, solar panels offer savings on electricity bills, estimated at £183/year for a 2 kW installation to £583/year for 10 kW. And government incentives like the Smart Export Guarantee (SEG) provide additional earnings. Not to mention the fact that solar panels can boost property value by up to 25%. 

As a result, break-even on high-end installations typically takes 6 to 10 years, while the average is around 14 years. Over the span of 25 years, UK households can make up to £6,000 in profits.

Summary

         In the UK, various grants and schemes have come and gone to promote solar panel adoption, with many also evolving over time. Today, ECO4 stands as a prominent opportunity for eligible households, offering fully funded or discounted solar panels. 

While some previous schemes have ended, solar panels remain a valuable investment, providing long-term energy savings and contributing to a greener future. With many initiatives in play and constant changes, it’s essential to stay informed about the latest available options and eligibility criteria to ensure the feasibility and cost-effectiveness of your solar solution.