Solar Panel Grants
Solar panel grants, such as the ECO4 scheme, may help eligible households access funding for renewable energy installations. These schemes are designed to make solar panels more affordable while improving the energy efficiency of homes.
0% VAT
Solar panels, battery storage and other renewable technologies are also currently zero-VAT rated, which can save homeowners over £2,300 on a typical 4kW system.
Homeowners can also benefit from the Smart Export Guarantee (SEG), allowing you to earn money by exporting excess electricity back to the grid. Combined with energy bill savings of up to £660 per year for an average home, solar can provide strong long-term financial benefits.
0% VAT on Solar Panel Installations
Since April 2022, households in the UK have benefited from 0% VAT on the supply and installation of energy-efficient technologies, including solar panels and battery storage. This government incentive is designed to help homeowners reduce energy bills while improving the energy efficiency of their properties.
The current zero-VAT scheme runs until March 2027, after which VAT will return to the reduced rate of 5%. Installing a solar system during this period can therefore provide significant upfront savings.
According to UK Government estimates, a typical household installing a 3–4kW solar system with battery storage could save over £2,300 on installation costs thanks to the VAT reduction from 20% to 0%. In addition, many homes can save up to £660 per year on energy bills, helping systems pay for themselves much sooner.
The VAT reduction is automatically applied to eligible installations, so homeowners do not need to apply separately to benefit from the savings.
Smart Export Guarantee (SEG)
The Smart Export Guarantee (SEG) allows homeowners with solar panels to earn money by exporting excess electricity back to the national grid. Introduced in 2020, the scheme requires larger UK energy suppliers to offer payments for the renewable electricity their customers export.
SEG is not a direct government grant, but it enables solar system owners to receive payments for unused energy their system generates. Export rates vary by supplier and typically range from 1p to 20p per kWh, with many homeowners receiving around 5–6p per kWh on average.
Homeowners are free to choose any SEG provider, even if it is not their current electricity supplier, allowing you to compare tariffs and select the best rate. To qualify, your solar system must be certified and your property must have a smart meter capable of measuring exported electricity.
Combined with savings on your energy bills, SEG payments can further improve the long-term value of installing solar panels.
ECO4 Scheme
The ECO4 (Energy Company Obligation) scheme is a UK government programme designed to help improve the energy efficiency of homes while reducing carbon emissions. Running from April 2022 until March 2026, the scheme has £4 billion of funding available to support energy-saving improvements in eligible households.
Through ECO4, some homeowners may be able to access support for renewable energy measures, including solar PV panels, helping to reduce installation costs and improve household energy efficiency.
How the Scheme Helps
ECO4 is aimed primarily at low-income and vulnerable households with inefficient heating systems. In some cases, qualifying homes may be able to receive solar panels at little or no cost.
The scheme aims to upgrade around 450,000 homes across the UK to higher energy efficiency standards. Depending on the improvements installed, households may see average savings of around £290 per year, with the least efficient homes potentially saving much more.
Who May Be Eligible
The ECO4 scheme is designed to help households that meet certain criteria, which may include:
- Household income below £31,000
- Homes with an EPC rating between D and G
- Owner-occupied or privately rented properties (with landlord permission)
- Households receiving certain government benefits
- Properties with inefficient or outdated heating systems
Some households that do not receive benefits may still qualify through ECO4 LA Flex, which allows local councils to extend eligibility to low-income households based on local needs.
Eligibility is typically confirmed through a short assessment, followed by a property survey to determine which energy-saving improvements are suitable for your home.
