The new scheme allows households to install clean energy technology without any upfront cost, spreading payments over many years. This initiative comes as demand for these technologies is soaring, with nearly 150,000 solar panel installations in the first six months of this year and record heat pump sales in 2025.
Energy Secretary Miatta Fahnbulleh stated, "Energy is an everyday essential that must be affordable for everyone. These government-supported loans will help families across the UK upgrade their homes with no upfront costs to make them warmer and cheaper to run."
The loans are available to households across the entire UK, including England, Scotland, Wales, and Northern Ireland. Interest rates are reduced by up to 5% compared to regular loans. For example, a homeowner borrowing £10,000 at 8% over seven years could save up to £285 annually on repayments.
Ten lenders are initially offering loans, some interest-free, with repayment periods of up to thirty years. Homeowners can also combine a loan with grants of up to £9,000 through the government’s Boiler Upgrade Scheme and Home Energy Scotland.
Loan amounts vary by technology: up to £15,000 for solar panels and batteries, up to £35,000 for ground source heat pumps, and up to £20,000 for air-water source heat pumps and micro-renewable systems. All installations, except heat network connections, will be carried out by MCS-certified installers.
Dr Rhian-Mari Thomas OBE, CEO of The Green Finance Institute, commented, "Finance should not be a blocker of progress and the loans are just one of many solutions GFI looks forward to scaling to expand access for universal financial products so more homes can access home upgrades."
Case studies highlight potential savings. Beth in Birmingham, who had 14 solar panels and a battery installed, projects annual savings of £1,050. David in Bristol, with an air source heat pump, solar array, and battery, anticipates yearly savings of £1,694.
