The Warm Homes Loan Scheme, which opened on 27 October 2026, lets UK homeowners borrow up to £15,000 for solar panels and a further £15,000 for a home battery. The interest rate can be up to 5 percentage points lower than on a normal loan. It isn’t a grant, so you still repay every pound you borrow, but on the government’s own example of £10,000 over seven years the lower rate saves £1,993 in interest. The discount gets smaller the longer you borrow, and the loan does nothing to protect you from a poor installer, which is where most of the risk sits.
The Warm Homes Loan Scheme is the lending part of the government’s £15 billion Warm Homes Plan, published in January 2026. Around £2 billion of that plan sits behind these loans.
The government doesn’t lend you the money. Instead, you borrow from an ordinary lender, and 10 took part at launch: HomeServe (partnering with E.ON), Hometree Finance, Propensio, Secure Trust Bank, Selina Finance, South Manchester Credit Union, Sunsave, Tandem Bank, The Money Co-op and thisbank. More are expected to join in 2027
The loans cover solar panels, batteries and heat pumps across England, Scotland, Wales and Northern Ireland. The work must be done by an MCS certified installer using MCS certified products.
The government pays your lender a grant of up to 20% of your loan. This is paid only after the installation has been verified on the MCS database. In return, the lender has to pass the saving on to you as a lower interest rate.
The scheme is designed to take up to 5 percentage points off the lender’s normal rate. It only applies to loans of three years or longer, and it can never push the rate below 0%. So a lender whose normal rate is 8% can bring it down to 3% at best. A 0% loan is only possible where the lender’s normal rate was 5% or less to begin with.
The government’s own example shows the effect. Borrowing £10,000 at 8% over seven years costs £155.86 a month, or £13,092.42 in total. Through the scheme at 3%, it costs £132.13 a month, or £11,099.17 in total. That’s £23.73 a month less, and £1,993.25 less over the life of the loan.
You still pay back the full £10,000, plus interest. Cheaper borrowing is still borrowing.
Some lenders advertise repayment terms of up to 30 years. A longer term lowers the monthly payment, but the 20% cap on the lender’s grant runs out before it can buy the full 5 points off the rate.
We ran the formula from the government’s scheme rules on a £10,000 loan with a normal rate of 8%. These are the results:
| Loan term | Best rate through the scheme | Monthly payment | Total repaid |
|---|---|---|---|
| 7 years | 3.00% | £132.13 | £11,099 |
| 10 years | 3.11% | £97.06 | £11,647 |
| 15 years | 4.49% | £76.45 | £13,761 |
| 20 years | 5.17% | £66.92 | £16,060 |
Borrowing over 20 years rather than 7 cuts the monthly payment in half, but adds almost £5,000 to what you repay. Your lender’s starting rate will differ, so treat these as a guide to the shape of the trade-off rather than a quote.
The government’s guidance is to compare the total amount repayable, including any fees, not just the monthly figure. Some scheme loans are also secured against your home as a first or second charge mortgage, so check which kind you’re signing.
In 2024 Spirit Energy installed 22 solar panels (8.8 kW) and a 13.5 kWh Tesla Powerwall 3 on a house in Reading. The system cost around £17,000 and delivered £1,869 of value in its first year. You can read the full Reading solar and battery case study here.
If that £17,000 were borrowed on the same assumptions as the table above, the yearly repayments would look like this. A 7-year loan costs about £2,696 a year and £18,869 in total. A 10-year loan costs about £1,980 a year and £19,802 in total. A 20-year loan costs about £1,366 a year and £27,311 in total.
The short loan costs more each year than the system saves at first, but it costs the least overall. The 20-year loan is roughly covered by the savings from year one, but you pay around £8,400 more for the same roof. Neither choice is wrong. You just need to see both numbers before you choose.
Savings also tend to grow over time as electricity prices rise, which a first-year figure doesn’t show. Our guide to solar panel payback periods works through how that plays out over 25 years.
You can apply if you own the property, with or without a mortgage. This includes private landlords. The property must be residential and in the UK. There’s no income test, but the lender runs its usual credit and affordability checks and can add rules of its own.
For solar, the loan can cover new roof-mounted panels, including adding panels to a system you already have. The cap includes scaffolding, temporary safety equipment and the grid connection. A battery can be financed on its own or alongside solar. An EV charger can go on the same loan, but only as part of a solar or battery installation.
The loan won’t pay for a new roof or any structural work needed before the panels go on. That makes a full technical and structural survey before you sign more important, not less. If repairs come up halfway through, they have to be paid for separately.
The lender will want to see a proper quote. Under the scheme rules it must be dated within the last six months, addressed to you, itemised, show the system size in kW and include the installer’s MCS number. A one-line price on a text message won’t get through.
Grants are a separate part of the Warm Homes Plan, and they’re not repaid. For solar, the main grant route is the Warm Homes Local Grant, which runs in England through local councils. It’s for homes with an EPC rating of D to G where household income is generally £36,000 or less, or where someone receives certain benefits. It can pay for solar, insulation and heat pumps in full. You can check eligibility on GOV.UK.
The Boiler Upgrade Scheme is the other grant you’ll see mentioned. It gives £7,500 towards a heat pump in England and Wales, rising to £9,000 for homes switching from oil or LPG until 31 March 2027. It doesn’t cover solar or batteries. It can be combined with a Warm Homes Loan to cover the rest of a heat pump’s cost.
The two routes don’t stack for solar. You can’t take a Warm Homes Loan for panels that another public grant is already paying for. If you qualify for the Local Grant, start there. If you don’t, the loan is the route open to you.
You apply to one of the participating lenders, not to the government. Some lenders work only with their own partner installers. Others will lend against a quote from any MCS certified installer.
When you accept a loan, you also agree that the government or its agent can ask to inspect the property to check the work. Keep your quote, finance agreement, invoice and MCS certificate together once the work is done.
Choose the installer and the design first, and the loan second. If a lender chooses the installer for you, you’ve given up control of the decision that matters most to how much the system saves. Our solar return on investment guide in the Knowledge Bank explains what drives that number.
Solar in the UK has always moved in booms and busts. MCS certified contractor numbers fell from nearly 5,000 in 2012 to around 1,700 in 2019 after the Feed-in Tariff closed. A scheme like this one creates another boom, and booms attract companies that price low to win the work. A company installing at a loss can’t survive long enough to support a system built to run for 25 years.
Spirit Energy gets a call every three or four weeks from someone whose installer has gone bust, sometimes partway through the job. If you’ve borrowed for that system, the repayments carry on.
These are the checks to run before you sign:
Trading history. Look the company up on Companies House. Check how long it has been trading and whether its directors have a string of closed companies behind them.
Balance sheet. Check the company’s net assets. A firm with almost nothing on its balance sheet has little to lose by closing and starting again.
Long-term reviews. Look for customers writing years after their installation, not on the day the scaffold came down.
One-star reviews. Read how the company responds. Look for whether it tries to resolve the problem or argues in the comments.
The people. Ask who will be on your roof, and who will answer the phone in five years’ time.
Ask the lender whether your agreement is linked to the installer. The scheme rules note that, under consumer credit law, lenders can share liability for installation problems on some types of agreement. This varies by product, so confirm it in writing before you sign.
Spirit Energy has been installing since 2010, has completed more than 6,000 installations, and still looks after systems from its first year. Spirit Energy doesn’t offer finance, and the system design is the same whether you pay cash or borrow. A bespoke technical quotation includes forecast generation and savings, so you can check them against the repayments before you commit.