Solar panel grants in the UK - An updated guide for 2024

Let's not beat around the bush; solar panels can be pricey. And, with the cost of living reaching astronomical highs in recent times, this price tag might have stopped you from investing.

This situation is about to change, though, with three new government incentives that make it cheaper and easier to switch to renewable energy sources. We've gathered the information on all of them so you'll know what they could save you, what it takes to be eligible, and how to apply.

What are the benefits of installing solar panels?

There are lots of benefits to having solar panels installed on your property. Not only will the clean energy source reduce your carbon footprint, it could also reduce your energy bills by up to 90%. With ever-growing energy bills becoming the norm, solar panels can be a truly worthwhile investment.

You can even receive payments when you send your surplus energy to the National Grid using one of the grants for solar panels mentioned on this page (SEG).

Also, despite what many people believe, solar panels don't need a constantly cloudless sky overhead to produce energy. Our predictably British weather is actually perfect for solar panels - all they need is standard daylight.

How expensive are solar panels in the UK?

Solar panels cost roughly £6,000 - £7,000 without the use of a grant - the price varies based on the panels' quality and the size of your home.

The good news is that while energy bills have skyrocketed, the price of solar panels has actually fallen. When paired with one of the current government grants for solar panels, it'll give you a much bigger saving than ever before. 

Energy Company Obligation 4 (ECO4)

The ECO4 scheme replaced ECO3 in April 2022 and is set to expire in March 2026. The UK government has allocated £4bn to improve the Energy Performance Certificate (EPC) rating of low-income households and reduce carbon emissions. You'll have the opportunity to replace any inefficient heating systems with eco-friendly systems, such as solar PV panels.

More people than ever will be eligible for the ECO4 solar panel grant because of the introduction of LA Flex.

What eligibility criteria do you need to meet?

You're eligible for the ECO4 scheme if you:

• Are a homeowner, landlord, or private tenant
• Have a property with inefficient electric heating (E, F, or G EPC rating)
• Are receiving any of the benefits listed below

The benefits that qualify you for the ECO4 scheme are:

• Jobseekers Allowance (JSA), income-based
• Employment and Support Allowance (ESA), income-related
• Housing Benefit
• Pension Credit
• Income Support (IS)
• Universal Credit (UC)
• Work Tax Credit (WTC)
• Warm House Discount Scheme Rebate
• Child Tax Credits
• Child Benefit, depending on income threshold

If you aren't receiving benefits but are still considered low-income, you could still qualify for ECO4 as part of the ECO4 Local Authority Flex & Delivery Scheme. Through LA Flex, your local council has the flexibility to determine your individual eligibility based on income and other circumstances, including your age, the number of children you have, and the number of total occupants.

How do you apply for the ECO4 grant?

The first step in applying for the grant is to check your eligibility on the ECO4 Funding page. Once you've filled out and submitted the online eligibility checker, a certified surveyor will visit your home at no cost to you. They'll quickly confirm whether the house is suitable for ECO4 and which measures can best be implemented.

Once the survey's done, they'll arrange to install the solar panels when it's the most convenient for you. That’s where BOXT solar installers come in.

Smart Export Guarantee (SEG)

The Smart Export Guarantee (SEG) launched in January 2020, replacing Feed-in-Tariff, and doesn't currently have an end date. SEG doesn't offer government grants for solar panels directly; instead, it provides your household with a different way to save money by investing in a solar panel system.

If you decide to invest in a solar panel system, SEG helps to reimburse that investment. The scheme requires energy suppliers to pay homeowners for any solar-powered energy they're not using. Unlike Feed-in-Tariff, under SEG, you get paid for every unit of electricity you feed back to the National Grid.

What eligibility criteria do you need to meet?

If your home generates energy in any of the following ways, you can qualify for an SEG:

• Solar PV panels
• Wind 
• Micro-combined heat and power (micro-CHP) 
• Hydro
• Anaerobic digestion (AD) 

You'll also need to have a smart reader installed to provide half-hourly export readings.

How do you apply for SEG?

To apply to be an SEG generator, you'll need to shop around for a licensee (an electricity supplier who offers an SEG tariff) and apply to them directly. All SEG licenses are required to offer an SEG tariff if you have an eligible solar panel system, but they each have their own application process to follow.

Tariffs often change, so it's worth shopping around for the most competitive price - you don't have to get your SEG tariff from the same company you buy your electricity from.

0% VAT on solar panels

Since April 2022, UK homes have been able to benefit from zero VAT on solar panel materials and installation. The scheme ends in March 2027 and returns to 5% VAT. While it's at 0%, the average family can save more than £1,000 when choosing to have solar panels installed and up to a further £1,180 a year on energy bills.

The scheme also covers other energy-saving materials such as central heating, insulation, heat pumps, and more. It doesn't include solar batteries.

What eligibility criteria do you need to meet?

To be eligible for the 0% VAT scheme, your home and solar installation need to meet the following requirements:

• You have to purchase both the installation and solar panel products together
• The solar panels aren't suitable for DIY installation
• You can install other goods/services (e.g. heat pumps) at the same time, but the majority of the work must be for energy-saving materials

If the cost of the products (excluding VAT) is less than 60% of the cost of installation, you'll pay 5% VAT and the standard rate of 20% on the products.

How do you apply for the 0% VAT grant?

If your solar panel materials and installation qualify, the 0% VAT will be automatically applied by your installer. There's no need to fill out an application form or complete any process.

Think you might be ready to invest in a solar panel system? Talk to us.

Solar panels are much more affordable than in previous years. With grants like ECO4 and LA Flex, many households are becoming eligible to save money on upfront solar panel costs. By making the jump to renewable energy, you can save on household bills and even make money through the SEG scheme.

To help make your investment even more affordable, BOXT also offers a range of finance plans: 36, 60, 84 and 120 months at 11.9% APR.

If you want our experts to walk you through a tailored plan for your household and what the perfect solar panel set-up would look like, simply answer a few questions about your home and we’ll be in touch.