Homeowners can now apply for Government-backed loans to help pay for solar panels, batteries and heat pumps, following the launch of the Warm Homes Loan Scheme on 27 October 2026.
The loans are being offered through banks and other lenders, with some interest-free deals available. You could spread the cost over several years rather than pay for the work upfront.
But this is money you have to pay back. Before signing up, you’ll need to check whether the savings on your energy bills are worth the monthly repayments.
What can you borrow the money for?
The Government’s announcement sets different borrowing limits depending on what you want installed.
| Home improvement | Maximum loan supported |
|---|---|
| Solar panels | £15,000 |
| Home battery | £15,000 |
| Air-to-water heat pump | £20,000 |
| Ground source heat pump | £35,000 |
| Biomass boiler | £20,000 |
| Heat network connection | £7,500 |
| Small renewable system, such as domestic wind or hydro | £20,000 |
| Air-to-air heat pump | £10,000, once the required certification is available |
These are the scheme’s upper limits, not amounts every applicant will be offered. The lender still decides how much you’re able to borrow.
How much interest will you pay?
There’s no single interest rate for everyone.
The Government says its support could cut borrowing rates by up to five percentage points compared with a lender’s normal rate, and some loans will be interest-free.
For example, say you borrowed £10,000 over seven years with fixed monthly repayments:
| Interest rate | Monthly repayment | Total paid back |
|---|---|---|
| 8% | About £155.86 | About £13,092 |
| 3% | About £132.13 | About £11,099 |
That’s around £23.73 less each month, or about £285 a year. Over seven years, the difference is nearly £2,000.
This is an illustration using the Government’s example rates, not a confirmed quote from a participating lender. It assumes no extra fees.
Even at 0% interest, you’d still repay the full amount borrowed. The repayment on £10,000 over seven years would be about £119 a month.
Will it actually save you money?
The Government estimates that installing a heat pump, solar panels and a battery together could reduce energy bills by up to £550 a year.
It says a suitable time-of-use electricity tariff could bring a further £300 a year in savings.
That’s a type of electricity deal where you pay different rates depending on the time of day.
But the £550 figure works out at about £46 a month, and those savings are an estimate for a combination of upgrades, not a promise for every home.
They also don’t take loan repayments off the total.
So ask the installer for an estimate based on your property and how much energy you use. Then put the expected savings next to the actual loan repayments.
Your electricity or heating bill might go down while your total monthly spending goes up.
The improvements could still save money over their working life, but that doesn’t mean the loan will improve your budget straight away.
Who can apply?
The scheme covers England, Scotland, Wales and Northern Ireland. It is aimed at people who own and live in an existing home, as well as private landlords borrowing in their own name.
You don’t have to be receiving benefits or fall below a particular income limit under the national scheme rules.
However, each lender will check your income, spending and credit history, and may have extra conditions.
If you rent, you cannot take out one of these loans as a tenant. Your private landlord may be able to apply for improvements to the property.
Which lenders are offering the loans?
The Government has named ten lenders taking part initially:
- HomeServe, working with E.ON
- Hometree Finance (also known as HTG Finance)
- Propensio
- Secure Trust Bank
- Selina Finance
- South Manchester Credit Union
- Sunsave
- Tandem Bank, working with British Gas
- The Money Co-op
- This Bank
Not every lender will offer every improvement or lend in every area. Some work through particular installers, rather than accepting an application for any installer you choose.
For example, Sunsave says it is offering low- or zero-interest borrowing for solar panels and batteries in areas where it installs.
Its stated terms include three-, ten- and twenty-year options. Those terms shouldn’t be taken as the terms of other lenders.
Check directly with a participating lender or its installer for a current quote, interest rate and repayment details before applying.
Check whether you could get a grant first
A loan isn’t your only option.
In England and Wales, eligible homeowners can combine the loan with the Boiler Upgrade Scheme. Most qualifying air-to-water and ground source heat pump installations receive £7,500 towards the cost.
A higher £9,000 grant is available until 31 March 2027 for certain homes without mains gas that are replacing oil or LPG heating. It isn’t £9,000 for everybody.
If you’re on a lower income in England, also check the separate Warm Homes: Local Grant.
Some eligible households can get improvements such as insulation, solar panels or a heat pump paid for, with no loan to repay.
Different grant schemes apply elsewhere in the UK, so check what’s available where you live.
The catches to check before signing
One important detail is whether your loan is secured against your home. The official scheme rules allow both secured and unsecured borrowing.
With a secured loan, your home could be at risk if you cannot keep up repayments. Our secured loans guide explains what to look for.
Also check the full amount you’ll repay, any fees, whether the rate is fixed, and whether you’ll be charged for paying the loan off early.
Some loans can run for as long as 30 years. A longer loan may make the monthly payment smaller but can increase the total interest paid.
Get more than one installation quote where possible.
For most upgrades, the work must be carried out by a certified installer under the Microgeneration Certification Scheme (MCS).
Skint Dad says:
A 0% loan might sound like a great deal, but that doesn’t automatically mean you’re getting the best price.
You could still end up paying more if the installer charges too much in the first place.
Get a few quotes for the work before looking at finance. Then check whether the energy savings are worth the monthly repayments.
The last thing you want is to lower your energy bills only to leave yourself with more to pay each month.
What should you do now?
Start by checking whether you qualify for a grant and whether the improvement is suitable for your home. Get quotes showing both the installation price and realistic expected energy savings.
Then compare the loan offers on the total amount to repay, not just the monthly figure.
If you’re comparing costs, use your current energy bills as the starting point. Our guide to the October 2026 energy price cap explains the latest confirmed rates.
The new scheme could make expensive home upgrades easier to afford upfront. The most important number, though, is what you’ll be paying each month after any energy bill savings.
