Solar Panel Grants UK 2026 SEG, ECO4 & Available Funding
While the UK no longer offers a direct solar panel grant for all homeowners, several financial incentives make solar more affordable in 2026: 0% VAT on residential solar (saving ~£1,000), Smart Export Guarantee (SEG) payments of 4-15p/kWh for exported electricity, the ECO4 scheme providing free solar for eligible low-income households, and the BUS grant (£7,500) for heat pumps that pairs well with solar.
0% VAT on Residential Solar
Since April 2022, residential solar panel installations carry 0% VAT (previously 5%). For a £5,500 system, this saves approximately £1,000 compared to the old rate. The 0% VAT applies to: solar panels, inverters, battery storage systems, mounting hardware, and installation labour. It covers both new installations and additions to existing systems. This VAT relief is confirmed through at least March 2027. No application needed — your MCS-certified installer simply does not charge VAT on the qualifying installation.
Smart Export Guarantee (SEG)
The SEG requires licensed energy suppliers (150,000+ customers) to offer payment for electricity you export to the grid. 2026 rates: Octopus Energy: Up to 15p/kWh (Agile Outgoing, variable based on wholesale prices). Ovo Energy: 7.5p/kWh fixed rate. British Gas: 5.5p/kWh. EDF: 4.1p/kWh. A 4kW system exporting 1,360 kWh/year earns £54-£204 annually depending on the tariff chosen. Requirements: MCS-certified installation, smart meter (or SMETS2 meter), and registration with your chosen SEG supplier. You can be on a different supplier for import and export.
ECO4 Scheme — Free Solar for Eligible Homes
The Energy Company Obligation 4 (ECO4) scheme runs until March 2026 and funds energy efficiency improvements for eligible households. Solar panels are included as a qualifying measure. Eligibility: household income under £31,000, or receiving qualifying benefits (Universal Credit, Pension Credit, Child Tax Credit, etc.), AND your home must have an EPC rating of D, E, F, or G. If eligible, the scheme covers the full cost of solar panel installation. Contact your energy supplier or search the Simple Energy Advice website to check eligibility.
Boiler Upgrade Scheme (BUS) — Heat Pump Grant
While not directly for solar, the BUS grant provides £7,500 towards an air source heat pump. Pairing a heat pump with solar panels is an excellent strategy — the solar can generate much of the electricity the heat pump needs. The combined system dramatically reduces both carbon emissions and energy bills. A heat pump using 3,000 kWh/year at 34p/kWh costs £1,020 from the grid, but with a 4kW solar system offsetting most of that usage, annual heating cost drops to £200-400. Apply through an MCS-certified installer.
| Incentive | Value | Eligibility | How to Apply |
|---|---|---|---|
| 0% VAT | ~£1,000 saving | All residential | Automatic — installer applies |
| SEG Export | 4-15p/kWh | MCS install + smart meter | Register with SEG supplier |
| ECO4 Scheme | Full cost covered | Low income + EPC D-G | Contact energy supplier |
| BUS Grant | £7,500 | Heat pump install | Through MCS installer |
| Scotland Loan | Up to £7,500 | Scottish residents | Home Energy Scotland |
Other Funding Options
Home Energy Scotland (Scotland only): Interest-free loans up to £7,500 for solar PV and £6,000 for battery storage. Additional cashback grants available for some households. Nest scheme (Wales only): Free home energy improvements for eligible households including solar panels. Green Deal Finance: Still available in principle, though limited lenders. Allows you to pay for solar through your electricity bill. Local authority grants: Some councils offer additional solar funding — check your local council website. Community energy schemes: Some communities offer group-buy discounts of 10-20% on solar installations.
Disclaimer: For educational reference only. Consult a licensed professional.