UK Launches Low- and No-Interest Loans of Up to £35,000 for Heat Pumps, Solar Panels and Batteries
Ten lenders are offering government-backed loans for home energy upgrades, with some repayment terms stretching to 30 years.
Households across the United Kingdom can now apply for government-backed loans to pay for rooftop solar, home batteries and heat pumps. The Warm Homes Loan Scheme, published by the Department for Energy Security and Net Zero on 27 October, is designed to bring the up-front cost of home energy upgrades down for people who cannot easily pay in cash.
"Energy is an everyday essential that must be affordable for everyone." — Energy Secretary Miatta Fahnbulleh
How the loans work
The government says loans will carry no or low interest, with rates up to five percentage points lower than a typical high street loan. In its worked example, a £10,000 loan at 8% over seven years costs about £155 a month without the scheme, and the scheme could save up to £285 a year in repayments. Lenders still run their own affordability and credit checks, and in some cases repayments can be spread over as long as 30 years.
Maximum loan sizes depend on the technology:
- Solar panels: up to £15,000
- Home battery: up to £15,000
- Air-to-water heat pump: up to £20,000
- Ground-source heat pump: up to £35,000
- Heat network connection: up to £7,500
Heat pump buyers can combine a loan with a Boiler Upgrade Scheme grant of up to £9,000 (Scotland uses Home Energy Scotland instead). Work must be done by MCS-certified installers.
Who is lending
Ten lenders are taking part at launch: Homeserve (working with E.ON), Hometree Finance, Propensio, Secure Trust Bank, Selina Finance, South Manchester Credit Union, Sunsave, Tandem Bank, The Money Co-op and thisbank. The government says more lenders and products are expected to join.
Why it matters
The government estimates that a household installing a heat pump, battery and solar panels together could save up to £550 a year on energy bills, plus up to £300 more with a time-of-use tariff. Those are official estimates, and actual savings will vary by home and usage.
Worth knowing
This is the first phase of the scheme, and a loan is still a loan: it has to be repaid, and approval is not guaranteed. Anyone considering one should compare offers from several lenders.
