UK government grants and incentives for solar panels explained

0% VAT on solar panels

Let’s start with one of the best bits: you don’t have to pay VAT on solar panels right now. That’s right – solar panel installations for residential homes are currently VAT-free until March 2027 under a government initiative to support energy efficiency. That’s a 20% saving right off the bat.

For example, we recently installed a solar system for a family in Poole. Thanks to the 0% VAT, they saved nearly £1,500 compared to what it would’ve cost just a few years ago. That’s money that stays in your pocket, which means you’ll pay back your system even sooner than if you’d paid the full price.

SEG (Smart Export Guarantee)

Once your solar panels are up and running, you’ll probably produce more energy than you use during the day. That’s where the Smart Export Guarantee (SEG) comes in. Under SEG, energy suppliers pay you for the excess electricity you export back to the grid.

You can shop around for the best rate, but most suppliers offer up to 15p per kWh. We helped a couple in Poole switch to a supplier offering one of the top SEG rates, and now they get a little reward every month for the power they send back. It’s not going to pay for your panels overnight – but it does add up, and it’s a nice bonus that many customers are unaware of during the consideration phase.

ECO4 Scheme (for eligible households)

This one’s a bit more specific. The ECO4 scheme is mainly aimed at lower-income households and people receiving certain benefits. If you qualify, you might be able to get solar panels installed either at a discounted rate, or even completely free. It’s all part of the government’s plan to tackle fuel poverty and improve energy efficiency in homes.

If you think this could apply to you, give us a call. We can help you with the process, pointing you in the right direction or help you check eligibility.

Is there a grant for everyone?

Right now, there isn’t a blanket “solar grant” for every homeowner in the UK. But between 0% VAT, the SEG payments and energy savings (especially with rising electricity prices), most of the households we work with see a return on their investment in well under 10 years.

If you’re curious to find out more about what grants you might be eligible for, and to see what going solar could look like for your home, we’d love to help. Book a free home survey to find out more. We’re a family run business and we’re here to offer honest advice to help you decide if solar is right for you.