This article was generously contributed by Tony Baker of Marches Energy Advice.
Warm Homes Loans are here: low-cost finance for solar, batteries and heat pumps
Solar panels, batteries and heat pumps can be the keys to unlocking significant energy bill savings. The government estimates that a heat pump, solar panels and a battery together could cut energy bills by up to £550 a year, with a further £300 possible from a judiciously chosen time-of-use tariff. But of course many householders are put off by the upfront cost of these green technologies. If only cheap finance was available…
The government-backed Warm Homes Loan Scheme is now here, launched on 27 October 2026. It offers no- and low-interest loans through banks and other lenders, so you can spread the cost of green tech over several years rather than paying up front.
Solar panels and batteries can each be supported up to £15,000; air-to-water heat pumps up to £20,000; and ground-source heat pumps up to £35,000. The government says lenders have cut interest rates by up to 5% compared with regular loans, with up to 30 years to repay. Many loans will not be interest-free.
Some early deals show what that looks like for solar. Good Energy says it will offer finance for solar panels and batteries from 4.9% APR over five to ten years, or 6.9% APR over 15 years. Sunsave says it is offering low- or zero-interest borrowing for solar and batteries. Energy suppliers including British Gas and E.ON have partnered with lenders such as Homeserve, Tandem Bank and The Money Co-op.
There is no income threshold, but lenders will check you can afford the repayments. It is still a loan, so be careful to compare total repayment costs and get several quotes before you sign up.
The Boiler Upgrade Scheme survived the Budget, but it doesn’t look safe
Ahead of the Budget, reports said hundreds of millions of pounds could be cut from the Boiler Upgrade Scheme’s £2.7 billion budget to help fund defence. Chancellor John Healey’s Budget did not cut it, so the grant is still there: £7,500 towards an air source heat pump, or £9,000 if you are replacing an oil or LPG boiler with a heat pump until 31 March 2027.
But it looks vulnerable. The Chancellor is still expected to find £4.7 billion to fill a gap in the Defence Investment Plan, and the government’s spending totals are expected to be set out in next year’s spending review. Treasury officials reportedly dislike the BUS grant, regarding it mainly as benefiting middle-class households.
So our advice is: if you’re considering getting a heat pump, don’t wait. Heat pumps are wonderful low carbon technology, capable of amazing 500% efficiencies – against typical efficiencies of just 85% for gas or oil boilers. The loans and the grant can be combined, and the grant clearly won’t be around for ever.
For local installers recommended to us by householders like you, visit mea-directory.org.uk
