Just over a decade ago the government introduced an initiative to increase the use of renewable energy in homes up and down the country. The Feed-in Tariff (FiT) paid a fixed fee for every kWh of electricity produced and was responsible for a massive surge in the use of solar panels in the UK.
In its early days, the Feed-in Tariff was so generous that some companies offered to install solar panels for free in exchange for the FiT payments. However, as with all subsidy schemes, this model eventually became unsustainable. The government reduced FiT rates in 2016, making it unviable for third-party “free solar” companies to operate.
In April 2019, the Feed-in Tariff officially closed to new applicants. Households already on the scheme continue to receive payments until their contracts expire, but new households can no longer join.
Despite early concerns, the end of FiT did not spell the end of solar power in the UK. Solar panels are now far more efficient and affordable than ever before, and FiT has been replaced by the Smart Export Guarantee(SEG) — a scheme that continues to reward households for exporting surplus electricity back to the grid
Read our Government Solar Panel Help article for more information on the latest government-backed solar panel initiatives.
Are Free Solar Panels Available in 2026?
In most cases, no
However, some households may still qualify for fully funded solar panels through government-backed energy efficiency schemes.
If you are a low-income household and receive certain qualifying benefits — or meet other vulnerability criteria — you may be eligible for free solar panels and other heating or insulation upgrades under the ECO4 scheme.
⚠️ECO4 is scheduled to end on 31 March 2026, meaning availability is limited and subject to eligibility.
For most homeowners, solar panels are no longer provided for free, but there are still strong financial incentives to install them.
Solar Finance is Available to Help Spread the Cost
Although solar panel prices have fallen significantly, a typical 4kWp solar PV system still costs around £6,000 to £8,000 to install.
For homeowners who can’t afford the upfront cost, several low-interest finance options are available, including:
- Installer-provided solar finance packages
- Low-interest home improvement loans from high-street banks
- Green finance products designed specifically for renewable energy upgrades
Many lenders look favourably on solar loans because lower energy bills improve household affordability.
What Happened to the Feed-in Tariff?
The Feed-in Tariff was introduced in 2010 and consisted of two payments:
- Generation Tariff: Paid for every unit of electricity generated
- Export Tariff: Paid for electricity sent back to the grid
The scheme proved hugely successful. UK solar capacity grew rapidly throughout the 2010s, driven by FiT-backed installations across homes and businesses.
However, falling technology costs meant subsidies were no longer considered necessary, leading to the scheme’s closure to new applicants in 2019.
If FiT Was Such a Success, Why Was It Discontinued?
The scheme was a victim of its own success. The tumbling cost of solar panels, partly driven by the scheme, meant that subsidies were no longer required. When the scheme launched in 2010, the average cost of a typical solar installation was around £20,000. That same system can now be installed for as little as £6,000 to £8,000.
However, the government recognizes that subsidies are an important tool for encouraging homeowners to switch to more environmentally sustainable energy sources. As a result, a replacement for FiT was announced in 2019—the Smart Export Guarantee—which continues to incentivize households to switch to solar.
The Smart Export Guarantee to Replace FiT
The Smart Export Guarantee (SEG) came into force on January 1, 2020. Unlike FiT, which paid a fixed fee for every kWh produced, SEG compensates homeowners only for unused electricity exported back to the grid.
The scheme is fairer and more sustainable than FiT because it’s paid for by electricity companies and not subsidized by the government. All surplus electricity exported to the grid is compensated, unlike FiT, where only 50% was paid for under the Export Tariff.
All energy providers with more than 150,000 customers must offer SEG payments to customers with accredited systems. This ensures SEG payments remain competitive as energy companies outbid each other for your surplus energy.
How Much Can You Earn from the SEG Scheme in 2026?
SEG earnings depend on:
- Your system size
- How much electricity you export
- The tariff you choose
Typical SEG rates average around 5–8p per kWh, although some suppliers offer higher peak-time export rates under time-of-use tariffs.
A typical 4kWp system may earn £100–£200 per year from SEG alone, depending on usage and export behaviour.
When combined with energy bill savings — often £300–£400 per year — total annual benefits can approach £500–£600, significantly reducing payback times.
Is It Still Worthwhile Installing Solar Panels in 2026?
Yes — for most households, solar remains a strong long-term investment.
Key reasons include:
- Falling installation costs
- Competitive SEG export rates
- 0% VAT on solar (until 31 March 2027)
- Rising energy prices
You Will Benefit from Reduced Energy Bills
Installing solar panels can drastically reduce your energy bills. According to the Energy Saving Trust, a 4kWp system saves £250-£400 annually. This figure is expected to rise further as energy prices increase.
You Will Reduce Your Carbon Footprint
The world is warming at an alarming rate. The last decade was the hottest on record. Installing solar panels is one of the best ways to reduce your carbon footprint. A typical 4kWp solar system prevents 1.4 tonnes of carbon emissions annually.
You Can Save Even More with a Solar Battery
Combining solar panels with a solar battery can further increase savings by storing energy for use during peak times. Batteries also allow households to export energy during high-rate SEG periods, maximizing returns.
How to Find a Reputable Installer?
To ensure a smooth installation process, always choose an MCS-certified installer. Use our FREE quote service to request no-obligation quotes from trusted local installers.
SEG/Export League Table
View the best SEG/Export tariffs available in 2026 with our SEG/Export League Table.
View League Table