Interest-free loans for solar panels launch in the UK
Key Points
- Warm Homes loans offer cheap and interest-free finance for green home tech
- Solar panels, batteries and heat pumps could cut bills by £550 a year
- Borrowing caps range from £10,000 to £35,000 depending on the technology
- The scheme covers homeowners and private landlords across the whole UK
- The government will list participating lenders on GOV.UK
Treasury launched its Warm Homes loans scheme on Monday (26 October), offering cheap and interest-free finance for solar panels, batteries and heat pumps.
The government said installing a heat pump, battery and solar panels could cut a household’s energy bills by up to £550 a year. Switching to a time-of-use tariff could add further savings on top of that figure.
The scheme covers homeowners across the whole of the UK, including Scotland, Wales and Northern Ireland. Private landlords can also use it to upgrade the homes they let out.
Participating lenders offer loans at a lower interest rate than they would normally charge, and the government covers the difference. The subsidy cuts rates by up to 5 percentage points, and some households could borrow at 0%.
A lender that would normally charge 8% to finance solar panels could offer the same loan at 3% under the scheme.
The scheme caps borrowing for each technology at the following amounts:
- Solar panels: £15,000
- Battery storage: £15,000
- Air-to-water heat pumps: £20,000
- Air-to-air heat pumps: £10,000
- Ground source heat pumps: £35,000
The heat pump caps apply before the Boiler Upgrade Scheme grant comes off the price. EV chargepoints qualify only when households install them alongside solar panels or a battery.
Only FCA-regulated lenders that join the scheme can offer the loans. The government will list participating lenders on GOV.UK once it names them.
The loans sit alongside the Boiler Upgrade Scheme, which takes £7,500 off the cost of a heat pump in England and Wales. Homes switching from oil or LPG heating can get £9,000 towards the cost.
The loans form part of the government’s £15 billion Warm Homes Plan, which aims to upgrade up to 5 million homes by 2030.
The launch came alongside a package of “everyday fixes” from Prime Minister Andy Burnham’s government ahead of the Budget on Wednesday (28 October).
“We can’t control global events, but we can act where we can make a difference,” said John Healey, Chancellor of the Exchequer.
