Is There a Grant for Solar Panels in the UK in 2026?
There is currently no direct government capital grant for solar panels in the UK in 2026 — unlike heat pumps, which qualify for the £7,500 Boiler Upgrade Scheme (BUS) grant. However, the government does provide significant financial support through other routes: a 0% VAT rate on solar installations (worth around £1,400 on a typical 4kW system), the Smart Export Guarantee (SEG) for export income, and ECO4 funding for eligible low-income households. Understanding these schemes clearly will help you make an informed decision.
This guide covers every form of government support available for solar panels in the UK in 2026, what each scheme is worth in cash terms, and how to access it.
0% VAT on Solar Panels: The Biggest Financial Benefit
The single most significant financial support for solar panels in the UK is the 0% VAT rate introduced on 1 April 2022 under the Finance Act 2022. Before this date, solar panel installations were subject to 20% VAT (or 5% in some cases), meaning homeowners paid considerably more for the same system.
The 0% rate applies to the full supply and installation contract — meaning panels, inverter, mounting hardware, cables, and labour are all zero-rated when contracted together by a single installer. This is not a grant that arrives in your bank account — it simply means you pay less from the outset.
How Much Does 0% VAT Save?
| System Size | Typical Cost (ex. VAT) | At 20% VAT | At 0% VAT | Saving |
|---|---|---|---|---|
| 3kW | £5,800 | £6,960 | £5,800 | £1,160 |
| 4kW | £7,020 | £8,424 | £7,020 | £1,404 |
| 6kW | £9,200 | £11,040 | £9,200 | £1,840 |
For a typical 4kW system in the London/Surrey area — the most common size for a 3–4 bedroom home — the 0% VAT rate saves approximately £1,400 compared to what would have been charged under the old rules.
If you are adding a battery storage unit to your solar system, the 0% VAT rate applies to battery storage too — provided it is installed at the same time as the panels or as part of a combined supply. This can add a further £400–£600 saving on a typical 5–10kWh battery. Read our detailed guide to solar battery storage and whether it is worth it in 2026.
Does the 0% VAT Rate Apply to Everyone?
Yes — unlike some other schemes, there is no income threshold or property requirement for the 0% VAT rate. Any UK homeowner installing solar panels (or battery storage) through a VAT-registered installer benefits automatically. You do not need to apply for anything — your installer simply charges 0% VAT on the qualifying supply.
Note that scaffolding-only contracts charged separately by a third-party scaffolding company may attract standard VAT rates, as scaffolding alone does not qualify as an energy-saving product. Ensure your installer provides a single combined contract where possible.
Smart Export Guarantee (SEG): Earn Money from Surplus Solar
The Smart Export Guarantee (SEG) is a government-mandated scheme that requires licensed electricity suppliers with 150,000 or more customers to offer payment for excess solar electricity exported to the grid. It came into force in January 2020 and replaced the older Feed-in Tariff (FiT) scheme.
Unlike the FiT, the SEG rate is not set by the government — each supplier sets its own rate. This means rates vary and change over time. According to Ofgem data (2026), current SEG rates from the main suppliers are as follows:
SEG Export Rates: UK Suppliers (April 2026 — Check Current Rates)
| Supplier | Export Rate | Notes |
|---|---|---|
| Octopus Energy | 15p/kWh (Flux) | Variable, paired with import tariff |
| E.ON Next | 5.5p/kWh | Fixed rate, no pairing required |
| EDF Energy | 4.0p/kWh | Fixed rate |
| British Gas | 5.5p/kWh | Subject to change |
| Ovo Energy | 5.0p/kWh | Fixed rate |
| Octopus (Outgoing) | 4.1p/kWh (standard) | Agile export also available |
Note: SEG rates change frequently. Always compare current offers at ofgem.gov.uk before choosing a supplier.
A typical 4kW system in London generates around 3,400 kWh/year. At the Ofgem April 2026 electricity price of 24.5p/kWh, self-consuming 50% of this saves approximately £417/year. If you export the other 50%, that is approximately 1,700 kWh exported. At 5p/kWh, this earns approximately £85/year in SEG income. At a premium rate of 15p/kWh (Octopus Flux), the same export earns £255/year.
For a detailed breakdown of SEG rates and how to maximise your export income, read our complete guide to the Smart Export Guarantee.
ECO4: Free Solar Panels for Low-Income Households
The Energy Company Obligation 4 (ECO4) scheme is a government programme that requires the largest energy suppliers to fund energy efficiency improvements in low-income and fuel-poor households. It runs until March 2026, though successor schemes are expected.
Solar panels are included within ECO4 as a qualifying measure in some circumstances — typically as part of a package of measures alongside insulation, a heat pump, or other upgrades. ECO4 is means-tested: you generally need to be on certain qualifying benefits (including Universal Credit, Pension Credit, or Child Benefit) and live in a property with an EPC rating of D, E, F, or G.
Eligibility is assessed through your energy supplier or a Trustmark-registered ECO4 assessor. If you qualify, the installation cost can be fully or substantially covered. The scheme is administered through individual energy suppliers — contact your supplier’s ECO4 team or visit gov.uk to check current eligibility criteria.
Important: ECO4 availability varies by area and remaining scheme budget. It is not a guaranteed entitlement.
Green Mortgages: Financing Your Solar Installation
Several UK lenders now offer green mortgage products that allow homeowners to borrow at preferential rates to fund energy efficiency improvements including solar panels. Green mortgages typically offer:
- A small interest rate discount (0.1–0.3%) on your mortgage for properties with EPC ratings of A or B
- Additional borrowing at lower rates specifically for green improvements, even if your property currently has a lower EPC
- Lenders include Barclays, NatWest, Nationwide, Halifax, and Lloyds
While not a grant, a green mortgage effectively reduces the financing cost of your solar installation and can make larger systems more affordable. Consult an independent mortgage broker for advice specific to your circumstances.
What About the BUS Grant for Solar Panels?
The Boiler Upgrade Scheme (BUS) grant of £7,500 applies to air source heat pumps only — it does not cover solar panels as a standalone installation. This is a common misconception. However, if you are installing an ASHP alongside solar panels, the heat pump element of your project can qualify for the BUS grant (subject to eligibility), while the solar panels benefit from the 0% VAT rate. Combining both in a single project from one contractor — as Electromatic offers — maximises your total financial benefit.
Read our full guide to the BUS Grant and how to claim £7,500 for your heat pump for complete eligibility details.
Local Context: Solar Grants in London and Surrey
Homeowners in the TW postcodes (Hampton, Twickenham, Richmond, Kingston, Sunbury-on-Thames) are eligible for all national schemes described above. There are no additional London-specific solar grants in 2026, though the Greater London Authority has previously funded solar co-operative schemes in some boroughs. Check your local council website for any borough-level schemes.
The Richmond upon Thames and Kingston upon Thames boroughs have a history of pro-renewable planning policies, which generally makes solar panel installation more straightforward in these areas than in some other London boroughs.
How Electromatic Can Help
Electromatic M&E Ltd installs solar PV systems across London and the TW postcode area. We handle the full process — from site assessment and system design through to grid connection and SEG registration. We work under MCS certification via our accredited umbrella partner, which is required for your installation to qualify for SEG payments.
If you are considering combining solar with a heat pump, we manage both in a single project, including BUS Grant handling for the heat pump element, subject to eligibility. Call us to discuss your options.
Call us: 07718 059 284 | Email: admin@electromatic.uk
Frequently Asked Questions
Is there a government grant for solar panels in 2026?
There is no direct capital grant for solar panels in the UK in 2026. The main government support is the 0% VAT rate on solar installations (saving approximately £1,400 on a 4kW system) and the Smart Export Guarantee, which pays you for electricity you export to the grid. Low-income households may qualify for free installation through ECO4.
Does the BUS Grant apply to solar panels?
No. The Boiler Upgrade Scheme (BUS) grant of £7,500 applies only to air source heat pumps, ground source heat pumps, and biomass boilers — not solar panels. If you install a heat pump alongside solar, the heat pump can qualify for the BUS grant while your solar panels benefit from 0% VAT.
How much does the 0% VAT save on a solar panel installation?
On a typical 4kW solar system costing around £7,020 (ex. VAT), the 0% VAT rate saves approximately £1,404 compared to paying 20% VAT. This saving is applied at the point of purchase — you simply pay less rather than receiving a payment afterwards.
Can I still claim the Smart Export Guarantee in 2026?
Yes. The Smart Export Guarantee remains active in 2026. Any MCS-certified solar installation qualifies, and you can apply to any licensed SEG licensee to receive payment for your exported electricity. Rates vary by supplier — compare current offers before signing up.
Do I need to apply for the 0% VAT on solar panels?
No application is needed. The 0% VAT rate is applied automatically by your VAT-registered installer on qualifying energy-saving materials and their installation. Simply ensure you receive a VAT invoice clearly showing 0% VAT on the supply and installation.
The information in this article is for general guidance only and does not constitute financial, legal, or technical advice. Energy savings estimates are based on typical UK household data from the Energy Saving Trust and Ofgem (April 2026 price cap). Actual savings depend on your property type, insulation levels, energy usage patterns, and electricity tariff. The Boiler Upgrade Scheme (BUS) grant of £7,500 is subject to eligibility criteria set by Ofgem — not all properties qualify. Electromatic M&E Ltd operates under MCS certification via an accredited umbrella partner. All installations comply with Building Regulations Part L and MCS standards. E&OE.
Last updated: April 2026 | Electromatic M&E Ltd, Company No. 13837345
Written by Electromatic M&E Ltd — ASHP & Solar installer, London & Surrey (electromatic.uk)
Ready to Take the Next Step?
Get a free, no-obligation home survey from Electromatic M&E Ltd. We handle everything including the £7,500 BUS Grant application.
Book Your Free Survey →