Executive Summary

• The Warm Homes Loan scheme will enable homeowners to apply for a no- or low-interest loan to enable installation of heat pumps, batteries, and solar panels
• 10 lenders are initially offering loans, including Homeserve, partnering with E.ON, who said the scheme was an ‘important step towards removing barriers to low-carbon technologies’
• Solar Energy UK said it expected the annual record for smaller-scale solar installations to be broken in the next few weeks, and another record year in 2028

One of the key headlines from the autumn Budget announced on Wednesday was the launch of the Warm Homes Loan Scheme. The scheme enables homeowners to apply for a no- or low-interest loan of up to £20,000 to enable installation of technology like heat pumps, batteries, and solar panels.

In a fact sheet issued alongside the announcement, the government noted that almost 150,000 solar panel installations had taken place in the first six months of this year. Estimates suggest that installation of a heat pump, battery and solar panels could help families save up to £550 a year on their energy bills, rising by a further £300 each year with a time-of-use tariff.

10 lenders are initially offering loans. They are Homeserve, partnering with E.ON, Hometree Finance, Propensio, Secure Trust Bank, Selina Finance, South Manchester Credit Union, Sunsave, Tandem Bank, The Money Co-Op, and This Bank. Chris Norbury, CEO of E.ON UK, said the scheme was an ‘important step towards removing barriers to low-carbon technologies.’

“By allowing customers to store energy when prices are low, use it when they rise and get more value from the energy they generate, we can give them greater control over their energy use and put pounds back into their pockets,” added Norbury.

Homeowners can also combine a loan with a grant of up to £9,000 through the government’s Boiler Upgrade Scheme.

Electrical Insight has covered various government initiatives and rollouts this year with regard to electrification and assessed their efficacy. Some have been received optimistically but with a caveat, such as plug-in solar. Others, such as the Great British Grid launch at the end of September, had a more sceptical reception.

Chris Hewett, chief executive of Solar Energy UK, cited the importance of households overcoming financial barriers to solar ‘making sure that the benefits are felt where they are most needed’, adding that the body expected the annual record for smaller-scale solar systems to be broken in the next few weeks.

“I have every confidence that the scheme will help deliver yet another record next year, over and above the 300,000 we expect to see this year,” added Hewett. “That in turn means employing more people, cutting energy bills and fuel poverty, delivering economic growth and cutting dependence on increasingly expensive natural gas.”

According to the Green Finance Institute (GFI), more than 40% of homeowners without solar PV plan to install it in the next decade. Yet 70% of those with no immediate plans for green home improvements cite cost as a barrier.

The GFI worked alongside the Department for Energy Security & Net Zero to bring about the Green Home Finance Strategic Partnership, which worked on securing the loan initiative. “Getting these government-backed loans to market required stakeholders across the value chain to coordinate at pace,” said Rhian-Mari Thomas, GFI CEO. “This kind of radical collaboration will be critical to delivering resilience, adaptation and the wider transition at scale.”

Picture credit: Created with Magnific