UK homeowners can get interest-free or cheap loans for solar or heat pumps
'Warm Homes Loan Scheme' provides interest-free or low-interest loans with as long as 30 years to repay.
The UK Government has introduced a new Warm Homes Loan Scheme to help homeowners finance the installation of renewable energy systems such as solar panels, batteries, and heat pumps. These loans offer either interest-free or low-interest rates, with a maximum reduction of 5% compared to traditional loans. Borrowers can access up to £15,000 for solar installations and batteries, or £20,000 for heat pumps and other renewable heating technologies. Heat pumps for ground-source applications can reach up to £35,000.
The scheme is supported by energy suppliers like British Gas and E.On, who have partnered with lenders such as Homeserve, Tandem Bank, and The Money Co-op. Homes can repay the loans over a period of up to 30 years, with some interest-free options available. Homeowners can still benefit from a grant of up to £9,000 for heat pump installation under the current Boiler Upgrade Scheme, which is mainly aimed at households not connected to the gas network.
The government anticipates a high demand for these technologies, with nearly 150,000 solar panel installations in the first six months of the year and record heat pump sales in 2025. The loans are intended to help households reduce their energy bills, with an example provided showing a potential monthly savings of £130 on a £10,000 loan repaid over seven years. The government estimates that installing a heat pump, solar panels, and battery could save households up to £550 per year on energy bills.
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