What Government Grants and Funding Are Available for Solar PV?

The UK government is committed to expanding renewable energy adoption, with solar PV playing a key role in reducing carbon emissions and lowering energy costs. These initiatives aim to make solar PV more affordable, reduce reliance on fossil fuels, and support the UK’s goal of achieving net-zero emissions by 2050.To encourage more households and businesses to install solar panels, various grants, tax incentives, and funding schemes have been introduced.

By taking advantage of these government-backed schemes, property owners can offset installation costs, generate additional income through energy exports, and benefit from long-term savings. Below, we explore the key funding options available for solar PV and how businesses and homeowners can access them.

1. The Smart Export Guarantee (SEG)

The Smart Export Guarantee (SEG) is a scheme that allows solar panel owners to sell excess electricity back to the grid.

• Under this scheme, energy suppliers pay households and businesses for the renewable electricity they generate but don’t use.
• Payments vary between suppliers, so it’s worth comparing rates to maximise your returns.
• The SEG replaced the Feed-in Tariff (FiT), which previously offered long-term payments for generating solar energy.

Although the SEG doesn’t cover installation costs, it helps homeowners recover their investment faster by turning excess solar power into a financial benefit.

2. ECO4 Scheme

The ECO4 (Energy Company Obligation) is a government initiative designed to help lower-income households improve energy efficiency.

• While the scheme primarily funds insulation and heating upgrades, some homeowners may qualify for support in installing solar PV systems.
• Eligibility is based on income and energy efficiency ratings, so it’s worth checking if your property qualifies.

ECO4 focuses on reducing fuel poverty while increasing the use of renewable energy solutions in homes.

3. VAT Reduction on Solar Panels

The UK government has introduced a 0% VAT rate on energy-saving materials, including solar PV systems.

• Previously set at 5%, the VAT cut applies to homeowners installing solar panels between 2022 and 2027.
• This reduction lowers installation costs significantly, making solar PV a more affordable option.

For businesses, the standard 20% VAT rate still applies, but companies can claim tax relief under other schemes.

4. Local Authority Grants

Some local councils offer grants and funding to encourage renewable energy adoption. These vary by location, but can include:

• Grants for low-income households to install solar PV.
• Loans or subsidies for businesses investing in renewable energy.
• Community solar funding for shared solar PV projects.

Checking with your local council can help identify additional financial support available in your area.

5. The Boiler Upgrade Scheme (BUS) – Solar Thermal Grants

While the Boiler Upgrade Scheme (BUS) primarily funds heat pumps and biomass boilers, it also supports solar thermal systems.

• Solar thermal panels are used for heating water, rather than generating electricity like solar PV.
• If your property is eligible, you can receive a £5,000 grant towards solar thermal installation.

This scheme is useful for homeowners looking to combine solar PV with solar thermal to cover both electricity and heating needs.

How to Apply for Government Solar PV Grants and Funding

Applying for solar funding depends on the specific grant or scheme you’re interested in. Here’s a general step-by-step approach:

1. Check Your Eligibility

Different grants have varying criteria, so it’s important to check whether you qualify before applying.

• ECO4 is income-based, while the VAT reduction applies to all homeowners.
• The SEG requires you to have an MCS-certified solar PV system.

2. Compare Your Options

Since funding sources differ, compare multiple grants and incentives to find the most cost-effective combination. Some homeowners may qualify for both local authority funding and national schemes.

3. Work with an MCS-Certified Installer

Most grants, including SEG payments and VAT reductions, require installation by a Microgeneration Certification Scheme (MCS) -accredited installer.

4. Submit Applications and Required Documentation

For most grants, you’ll need to provide:

• Proof of property ownership or tenancy agreement.
• Energy Performance Certificate (EPC), if required.
• Installation details from an accredited provider.

Once your application is approved, you can proceed with installation and start benefiting from lower energy costs.

Q&A: Common Questions About Solar PV Grants

Q1: Can I get a grant for solar PV if I already have panels installed?

Most grants cover new installations only, but you can still benefit from the Smart Export Guarantee (SEG) if you generate excess electricity.

Q2: Are there government grants available for businesses installing solar PV?

Businesses can apply for tax incentives, including the Annual Investment Allowance (AIA), which provides tax relief on solar panel investments.

Q3: Do solar PV grants cover battery storage systems like the Tesla Powerwall?

While most grants focus on solar PV installation, some local authority schemes may support battery storage integration.

Q4: How long does it take to receive grant approval?

Approval times vary but can range from a few weeks to a couple of months, depending on the grant and local authority processing times.

Q5: Will government funding for solar PV continue in the future?

The UK government continues to support renewable energy adoption, so more funding schemes are expected. However, existing grants like ECO4 and the VAT reduction have set end dates.

Is Solar the Right Option for You?

ESS Group specialises in helping homeowners and businesses maximise their savings with solar PV. From navigating government grants and incentives to designing and installing efficient solar systems, our team ensures you get the most out of your investment. Whether you’re looking to reduce energy costs, lower your carbon footprint, or gain energy independence, we provide expert guidance every step of the way. Contact ESS Group today to explore your solar options and take advantage of the funding available for your transition to renewable energy.