Solar panels are becoming an increasingly common option for UK households, giving people the option to produce their own green energy. One issue that many people face, however, is the price of solar panels and organising installation.
This article will go through the options available to you to lessen the financial strain when transitioning to solar energy including the various solar panel grants that either reduce installation costs or give the option to earn money in the long-term.
What Solar Panel Grants and Schemes are Available?
There are several government grants and incentives available for the installation of solar panels in the UK.
Energy Company Obligation (ECO4) Scheme (government-backed)
ECO4 is a government-backed scheme worth £4 billion designed to improve the energy efficiency of the least energy efficient households in the UK.
Under the terms of the scheme, energy companies are required to help low-income households increase their energy efficiency to help them lower their fuel bills. This also helps reduce carbon emissions and will help the UK meet its reduction targets.
ECO4 is a 4-year scheme, which started in April 2022 and is set to end 31 March 2026.
Before we discuss at the scheme’s actual measures, let’s take a closer at how a building’s energy efficiency is measured in the UK:
Energy efficiency is determined through an Energy Performance Certificate (EPC), with a rating that ranges from A to G. The lower your EPC rating, the higher your running costs (i.e. energy bills).
Bear in mind that a landlord can only legally rent out a property if the building’s EPC rating is E or higher.
Read here on how to find out your property’s EPC rating.
Under the ECO4 scheme, only D-G energy rating homes will be eligible. For social housing, however, only E-G properties are eligible. Some of the measures given to these properties are as follows:
- Financial aid (with a cap at £5000) for replacing broken boilers or upgrading systems with inefficient heating.
- Loft improvements to increase a building’s insulation
- Install greener energy systems
These improvements in energy efficiency will help those struggling with fuel poverty; in other words, you will be looking at cheaper energy bills this upcoming winter. You could be saving up to £1,600 per year!
ECO4, though an effective measure, remains limited in its eligibility. You can only receive aid in this scheme if you are
- A landlord, homeowner, or private tenant
- Receiving qualifying benefits
- In a property with a low EPC rating or with electric storage heaters
Smart Export Guarantee (SEG)
The SEG is another government grant that enables households with solar panels to sell back some of their surplus energy production back to the power grid. You need to have a solar panel battery in order to receive this grant.
The SEG supports installations with a total installed capacity (TIC) up to 5MW (or up to 50kW for micro-CHP). Installations with a TIC greater than 5MW are not covered by the grant.
In order for an installation to be considered an ‘eligible installation’ and be eligible to receive a SEG export tariff, all applications must:
- Demonstrate that the installation and/or installer are suitably certified
- Have an export metre
- Have an export metre point administration number (MPAN)
The SEG remains a relatively small grant (on average, the power grid will pay 4-6 p/kWh), though it does help relieve financial pressure by reducing your monthly energy bills.
VAT Incentives
Up until recently, VAT was reduced from 20% to 5% for solar panel installations. In March 2022, then-chancellor Rishi Sunak announced that VAT would be completely removed from all renewable energy measures, including solar panel installations.
Prior to Sunak’s decision, only those over 60 or those receiving disability benefits (i.e. Disability Living Allowance or Severe Disability Allowance) were eligible for this VAT reduction. Now, all households are eligible for this reduction until 2027.
This decision is designed as part of a greater effort to enable a greener future for the UK, with progressively less reliance on non-renewable energies.
The removal of VAT on installation counts for the materials used (i.e. scaffolding) and labour costs. This represents a considerable reduction in costs, making the transition to renewable energy more affordable.
As installation costs vary, you can request a quote here.
For more information on the UK government’s Green Deal measures, read here.
Can I get a solar panel grant under the ECO4 scheme?
It depends on your financial situation and the current energy efficiency of your home.
How to know if you’re eligible for the ECO4 scheme grants?
To be eligible for the grants, your home needs to have an E EPC rating or lower, and you receive a qualifying benefit payment including:
- Child Benefit
- Income-based Jobseekers Allowance
- Universal Credit
You also need to be the owner of the property or have the permission of your landlord.
For the full list of eligible benefits, go here.
Bear is mind that social housing is not eligible for ECO4 scheme grants.
How to apply?
After you have made sure you are entitled for a grant, go to the ECO4 application website.
You will be told to fill out a survey, with details about your home to ensure your eligibility The survey takes 10-15 minutes to complete.
After the survey is complete, the installation process will begin, in accordance with what is convenient for you. Installation should take around 3 days to complete.
To sum it up
The UK government has introduced various schemes to help ease the financial burden of solar panels. Although these grants aren’t available to all households, they remain a feasible option for those struggling to pay for increasing energy costs.
Solar energy will always remain a financially attractive option, as, despite dear upfront costs, yearly energy bills are considerably reduced.
