Government Solar Panel Help

The government has been working towards building a smart, decentralised and decarbonised energy system for more than a decade. This mammoth task involves phasing out coal-fired power stations and replacing them with a decentralised system of smaller, localised energy networks.

These micro-networks draw power from several local sources, including wind farms, combined heat and power plants, and solar arrays. Once complete, this transition is expected to deliver a greener and more efficient energy system, with some estimates suggesting consumers could be as much as £8 billion per year better off.

To achieve the goal of a decentralised grid, the UK needs to generate more power locally. This is why there was some dismay when the government announced it was scrapping the popular Feed-in Tariff (FiT).

The closure of FiT led some homeowners to question the economic viability of domestic solar. However, its removal coincided with a significant reduction in the cost of solar panels and the introduction of its successor — the Smart Export Guarantee (SEG). While SEG is less lucrative than FiT, it still allows solar owners to earn money by exporting surplus electricity back to the grid.

Good news followed for solar adopters in 2022 with the announcement that VAT on solar PV installations (and other heating measures) will be slashed to 0% thanks to the Government’s Spring Statement – meaning there’s never been a better time to choose solar.

Below, we take a look at the government’s solar initiatives — both current and historical — starting with the most recent scheme, ECO4.

What is ECO4?

ECO4 is the fourth phase of the government’s Energy Company Obligation (ECO) scheme. It launched in August 2022 and is scheduled to run until 31 March 2026.

ECO4 is a government-backed scheme designed to help low-income and vulnerable households improve the energy efficiency of their homes. Under ECO4, larger energy suppliers (those with more than 150,000 domestic customers) are legally required to fund energy-saving improvements for eligible households.

⚠️ Important: ECO4 is expected to close at the end of March 2026, meaning households may have a limited window to apply.

Does ECO4 include Solar?

In some cases, yes — but solar panels under ECO4 are not usually installed as a standalone measure.

If your home uses electric-based heating, such as an air source heat pump or an electric boiler, you may be eligible for fully funded solar PV as part of a wider energy-efficiency upgrade.

To qualify for ECO4, you must meet at least one of the following criteria:

• Your total household income is below £31,000 per year
• You have been referred through a local authority (council), energy provider, or medical professional
• You receive certain qualifying benefits (see below)

ECO4 Qualifying Benefits

You may be eligible for ECO4 funding if you receive one or more of the following benefits:

• Income-based Jobseekers Allowance (JSA)
• Income-related Employment & Support Allowance (ESA)
• Income Support (IS)
• Pension Credit Guarantee
• Working Tax Credit (WTC)
• Child Tax Credits (CTC)
• Universal Credit (UC)
• Housing Benefit
• Pension Credit Savings Credit

If you believe you qualify, you can apply through an energy supplier that participates in the ECO4 scheme.

To view the full list of energy suppliers who offer ECO4, please visit the Ofgem website(link opens in a new window).

Smart Export Guarantee (SEG)

The Smart Export Guarantee (SEG) was introduced on 1 January 2020 as a replacement for the Feed-in Tariff.

SEG allows small-scale renewable energy producers to receive payments for any excess electricity they export back to the national grid.

The scheme is open to households with solar panel systems up to 5 MW capacity. To qualify:

• The system must be installed by an MCS accredited installer
• A smart meter must be installed

As of 2026, SEG remains the primary government-backed scheme for paying households for exported solar energy. Payment rates vary by energy supplier.

Read our Smart Export Guarantee article for more information on SEG.

Solar Panel VAT Rate (0% Until 2027)

The government’s 2022 Spring Statement reduced VAT on energy-saving technologies — including solar panels, heat pumps, and insulation — from 5% to 0%.

This measure was introduced to encourage homeowners to invest in greener technologies and can save hundreds of pounds on installation costs.

The 0% VAT rate applies until 31 March 2027, after which VAT is expected to revert to a reduced rate unless extended.

Read our Solar VAT article for more on the Government’s 2022 Spring Statement.

Renewable Heat Incentive (RHI) – Closed

The Renewable Heat Incentive (RHI) previously provided quarterly payments over seven years to households using renewable heating technologies, including solar thermal systems.

🔒 The RHI scheme closed to new applicants on 31 March 2022 and is no longer available. Existing participants continue to receive payments, but new applications are not accepted.

For more information please read our Renewable Heat Incentive Scheme article.

Green Homes Grant Scheme – Closed

The Green Homes Grant launched in September 2020 and offered vouchers of up to £5,000 for energy-efficiency improvements such as insulation.

❌ The scheme closed to new applicants on 31 March 2021 and is no longer available. It has since been replaced by a range of local authority-led funding schemes, targeted mainly at low-income households.

For more information please read our Green Homes Grant Scheme Explained article.

Local Authority & Council-Run Solar Grants

In addition to national schemes, some councils offer solar and energy-efficiency funding through regional programmes or flexible eligibility routes such as Local Authority Flexible Eligibility (LA Flex) (link opens in a new window).

These schemes may help households that do not receive benefits but still struggle with high energy bills. Availability and eligibility vary by area.

How to Apply for Government Solar Funding

Before applying for any solar grant or funding scheme, it’s important to confirm:

• Which schemes are currently active
• Whether you meet the eligibility criteria

For the most up-to-date guidance, visit the government’s official energy efficiency website (opens in a new window) or speak to an approved installer who can assess your eligibility.