A Comprehensive Guide to Solar Panel Grants

Ian Lewis[1]

Ian Lewis

Money Savings Advice Solar panel grants

In the UK, there are no current solar panel grants. There are, however, several other ways to save money when installing solar panels. You could cut your household electricity bills in half by installing solar panels.

For some time, encouraging homeowners to add solar panels to their home, the government offered solar panel grants to help cover the costs of installation. These solar panel grants helped people make the switch from traditional to solar energy.

Solar panel schemes weren’t as popular as they were expected to be, so those solar panel grants have since changed to other approaches.

Read on to find out more about solar panel grants, and what options are available today.

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Green Deal Grants

In 2014, the government offered what they called Green Deal grants. Households would be eligible for up to £7,400.

At the time, solar panels were much more expensive than today. Now, adding solar panels to your home should cost about £6,000. In 2010, that cost would have been closer to £20,000.

The government’s Green Deal grants could help to cover some of the costs of solar panel installation. Unfortunately, this particular scheme was short-lived. Fifteen thousand people used a Green Deal grant before they were scrapped the following year.

Today, there are no solar panel grants from the government or anyone else. Instead, homeowners can take advantage of other money-saving opportunities or ways to finance the installation of solar panels.

Government’s Feed-in Tariff (FIT)

The Government’s Feed-in Tariff (FIT) is no longer available for new customers but is still in place for those that applied before April 2019. It runs for 20 years, so many people will be on their Feed-in Tariff until the late 2030s.

The Feed-in Tariff guarantees payments for your solar panels. If you’re on the tariff, you’ll get a payment for the energy your panels produce.

Payments are made per kWh, giving you a small income in exchange for solar panel installation. You can sell your excess energy to the National Grid.

When the Feed-in Tariff started, the earliest applicants received between 6.85p and 14.9p per kWh.

By the time the scheme closed in 2019, these payments had reduced to between 0.05p and 4.12p.

If you’re on a Feed-in Tariff, the payments you agreed at the start of the tariff are locked in for 20 years. You won’t have moved to a lower rate.

Money made through the Feed-in Tariff is tax-free. It doesn’t count towards the tax-free personal allowance and is entirely separate. 

Smart Export Guarantee (SEG)

The Smart Export Guarantee replaced the Feed-in Tariff. It launched at the start of 2020.

Again, the Smart Export Guarantee is not a solar panel grant. However, it means that all energy suppliers, with more than 150,000 customers, must offer an export tariff. Smaller energy suppliers, with fewer customers, can offer export tariffs if they want.

To export your energy, you will need a smart meter provided by your supplier. The smart meter shows how much energy is exported, and it’s this that the homeowner is paid for. Suppliers typically pay between 3p and 5.5p per kWh.

Installing solar panels can save a lot of money. You’ll save on energy bills by using your own solar-generated power, then make money from any excess if you’re on an export tariff.

According to the Energy Saving Trust, homeowners with solar panels could save up to £220 per year. Excess energy sold to the National Grid could earn around £100.

Green Homes Grant

With the Green Homes Grant, the government promises £2 billion towards energy-saving home renovations.

From September, homeowners can apply for home improvement vouchers. You could get up to £5,000 to spend on improving energy efficiency. If your income is low, vouchers could be increased to £10,000.

Solar panels are included on the list of eligible improvements, so you could get vouchers to put towards the cost of installing solar panels for your home.

Green Deal Loan

The Green Deal Loan replaced the Green Deal Grant. This is a repayable loan to use on renewable technology.

To be eligible for a Green Deal Loan, you must already have insulation that’s up to standard in your home. If yours isn’t, you must use the loan to cover insulation improvements. To make sure that you’re a suitable candidate, you’ll need to pay for a Green Deal Assessment which could cost up to £150.

 The loan comes with an interest of almost 7%. If you’re able to get finance elsewhere, this might actually work out cheaper – many bank loans start with interest rates that are half that amount.

If you’ve taken a Green Deal Loan, the repayments will be added to your fuel bills.

Getting Solar Panels Installed

By 2019, there were more than 800,000 UK homes with solar panels. The Smart Export Guarantee could help you to save money on your energy bills if you decide that you’d like to add to that number.

Though the Smart Export Guarantee isn’t a grant, it does provide a way to cut the costs of powering your home. Over time, you’ll earn back the money that you spent on solar panels.

By installing solar panels, you’re likely to find that you reduce your electricity bills. The solar energy produced will help to power your home. It can also be sold if you’re producing more than you need. That’s especially likely in the summer months, on brighter days and if you live in the south of England.

You can even add a battery to your solar system, allowing you to store any energy you don’t need straight away. Adding a battery will increase initial costs, but later allows you to stockpile electricity for times when you might produce less. You can save some energy for grey and rainy days so that you don’t need to buy from the grid straight away. A battery also means that, if you do need to buy from the grid, you can do so when the tariffs are cheaper overnight, and store it to use during the day.

According to the Energy Saving Trust, most homeowners could save between £85 and £220 per year by installing solar panels. This could be enough to reduce your household bills by up to 50%.

Finding the Best Energy Tariff

Speak to suppliers about the tariffs on offer if you’ve got solar panels. Export tariffs are a way to make money from the solar panels on your roof, though these will vary from one supplier to another. Ask how much you’ll be paid for excess energy, and factor in the original costs of buying from the National Grid. Assume that you won’t always produce as much energy as your home needs, so the cost of energy coming in is as important as what leaves your property.

Private energy suppliers can also tell you more about the Green Deal Loan if you want one. They’ll help with initial funding, then taking the loan repayments by adding to your energy bills.

How Can Money Savings Advice Help You With Solar Energy?

Here at Money Savings Advice, we have partnered with some of the UK’s leading Solar Energy companies. They have already helped thousands of people get the best Solar Panels & Solar Energy solutions for their homes and they can do the same for you.

Choosing an independent Solar management company means they won’t proceed with a scheme unless they are sure it is in your best interests. They are also regulated by the FCA, which gives you an additional layer of protection.

If you would like to speak to one of these Solar Energy companies who can help you, then click on the below and answer the very simple questions.

Money Savings Advice Author Ian Lewis

Ian Lewis

Ian Lewis is one of our specialist financial writers. Ian has over 15 years of financial writing experience, having worked for some of the largest financial publications in the UK covering topics from mortgages, equity release, loans and financial claims, to name a few.

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