UK Renewable Energy Incentives
Every grant, loan, mortgage deal, and tax incentive available to UK homeowners going green – explained simply.
Switching to renewable energy has never been more affordable. The UK government and devolved administrations offer a wide range of financial support – from outright grants that cover thousands of pounds to 0% loans, preferential mortgage rates, and ongoing income from your solar panels. This page brings everything together in one place so you can see exactly what you're entitled to and how to claim it.
Government Grants
These grants do not need to be repaid. They reduce the upfront cost of renewable heating and insulation measures.
Boiler Upgrade Scheme (BUS)
The flagship government grant for replacing fossil fuel heating with low-carbon alternatives. The scheme runs until March 2028 with 0% VAT on installations until March 2027.
Eligibility
- ✓Owner-occupiers and private landlords in England or Wales
- ✓Valid EPC issued within the last 10 years
- ✓Currently using fossil fuels (gas, oil) or direct electric heating without a heat pump
- ✓Installing a system up to 45 kWth capacity
- ✓Property must not be a new build or social housing (some self-builds exempt)
What's covered
How to apply: Your MCS-certified installer applies on your behalf. The grant is deducted from your invoice, so you only pay the remaining balance. You do not contact Ofgem directly.
ECO4 (Energy Company Obligation)
Funded by the UK's largest energy suppliers, ECO4 helps low-income and fuel-poor households improve their energy efficiency with insulation and heating upgrades – often at no cost to the homeowner.
Eligibility
- ✓Receiving certain means-tested benefits (e.g. Universal Credit, Pension Credit, Child Tax Credit)
- ✓Living in an EPC-rated D–G property
- ✓Your energy supplier participates in ECO4
- ✓Social housing tenants and private renters may be eligible via their landlord
What's covered
How to apply: Contact your energy supplier directly, or use the government's Simple Energy Advice service to check eligibility and be referred to a participating installer.
Great British Insulation Scheme (GBIS)
Launched in 2023 and running alongside ECO4, GBIS focuses specifically on insulation for homes with an EPC rating of D or below – regardless of income, with a separate means-tested track for the most vulnerable.
Eligibility
- ✓Property must be in Council Tax bands A–D (or A–E in Scotland)
- ✓EPC rating of D or below (or F/G for means-tested track)
- ✓Means-tested track: recipients of qualifying benefits
- ✓General track: no income requirement if in the correct Council Tax band
What's covered
How to apply: Check eligibility via the Simple Energy Advice website or contact your energy supplier. Installers must be registered with the GBIS scheme.
Home Energy Scotland Grant & Loan
Scotland's leading renewable heating scheme, offering both a non-repayable grant and an optional interest-free loan. Combined support can reach up to £16,500 for qualifying rural homes.
Eligibility
- ✓Owner-occupiers in Scotland
- ✓Currently using an inefficient or fossil fuel heating system
- ✓The property must be your main or only home
- ✓No income threshold – open to all homeowners
What's covered
How to apply: Call Home Energy Scotland on 0808 808 2282 or apply online. Advisors will carry out a free home energy assessment before recommending measures.
Nest – Welsh Government Scheme
Nest is the Welsh Government's free home energy efficiency programme for low-income households, providing insulation and renewable heating measures at no cost.
Eligibility
- ✓Living in Wales
- ✓Receiving a means-tested benefit OR have a low household income
- ✓Living in a property with an EPC rating of E, F, or G
- ✓Owner-occupiers and private tenants (with landlord consent)
What's covered
How to apply: Apply online via the Nest Wales website or call 0808 808 2244. A free home visit will be arranged to assess the property.
Warmer Homes Scotland
A Scottish Government programme providing free energy efficiency improvements to low-income homeowners living in the least energy-efficient homes.
Eligibility
- ✓Owner-occupiers in Scotland
- ✓On qualifying low-income or disability-related benefits
- ✓Living in a home with an EPC rating of E, F, or G
What's covered
How to apply: Contact Home Energy Scotland on 0808 808 2282 – they manage referrals for Warmer Homes Scotland.
Green Loans
Loans must be repaid but often come with 0% or preferential interest rates, making them an affordable alternative when a grant doesn't cover the full cost.
Home Energy Scotland – Interest-Free Loan
Available alongside the Home Energy Scotland Grant, this interest-free loan covers renewable heating and insulation measures. Repaid over up to 12 years with no interest charges.
Find out moreEnergy Efficient Scotland Loan
Specifically for homeowners upgrading their insulation to meet EPS standards. Administered through Home Energy Scotland alongside the grant scheme.
Find out moreGreen Finance from Banks & Building Societies
Many high-street lenders now offer dedicated green personal loans for energy efficiency improvements – typically at rates 1–3% below standard personal loans. Barclays, Nationwide, NatWest, and Lloyds all offer green loan products.
Find out moreGreen Mortgages
Green mortgages reward homeowners who purchase energy-efficient properties or make qualifying improvements. Benefits include lower interest rates, cashback, and in some cases increased borrowing capacity.
Lenders are increasingly factoring energy efficiency into their underwriting – a high EPC rating is now seen as reducing the risk of a property's value declining and lowering the borrower's living costs. As a result, the gap between green and standard mortgage rates is widening over time.
| Lender | Product | Benefit |
|---|---|---|
| Barclays | Green Home Mortgage | Reduced rates for EPC A or B properties Preferential mortgage rates for new purchases or remortgages on properties rated A or B. |
| NatWest | Green Additional Borrowing | Lower rates when borrowing to fund green improvements Discounted rates on additional borrowing used specifically for energy efficiency improvements. |
| Nationwide | Green Additional Borrowing | Up to 0.10% rate reduction Available when improvements raise the EPC rating by at least two bands. |
| Halifax | Green Living Reward | Cashback incentive Cashback offered when completing qualifying green improvements such as solar PV or heat pump installation. |
| Ecology Building Society | Ecological Mortgage | Purpose-built for green self-builds and retrofits Specialist lender for energy-efficient new builds, eco-renovations, and retrofit projects. |
* Always compare the full mortgage cost including fees, as a lower rate may not always mean the cheapest overall deal. Speak to a whole-of-market mortgage broker for personalised advice.
Tax Savings & Smart Tariffs
Beyond grants and loans, these ongoing financial benefits continue to save you money for the lifetime of your renewable energy system.
0% VAT on Energy-Saving Materials
Since April 2022, solar panels, heat pumps, insulation, draught proofing, heating controls, and other qualifying energy-saving materials attract 0% VAT rather than the standard 20%. This represents a direct saving on installation costs.
GOV.UK – VAT on energy-saving materialsSmart Export Guarantee (SEG)
All licensed energy suppliers with 150,000+ customers must offer a Smart Export Guarantee tariff, paying you for every unit of solar-generated electricity you export back to the grid. Rates typically range from 3p to 24p per kWh depending on your supplier and tariff. Octopus Energy and Ovo Energy offer some of the highest rates.
Ofgem – Smart Export GuaranteeOctopus Cosy Tariff
Specifically designed for heat pump owners, the Octopus Cosy tariff provides cheap-rate electricity (typically under 7p/kWh) during morning and afternoon "cosy hours" – allowing you to heat your home at minimal cost. Typical savings: £200–£300 per year versus a standard tariff.
Octopus Energy – Cosy TariffOctopus Agile & Go Tariffs
Agile Octopus offers half-hourly electricity pricing that follows wholesale market rates – meaning electricity can be virtually free (or negative) during overnight or high-wind periods. Ideal for EV owners and heat pump users with battery storage. The "Go" tariff provides ultra-cheap overnight electricity.
Octopus Energy – TariffsReduced Energy Bills (Energy Price Cap)
The UK government's energy price cap, regulated by Ofgem, limits what suppliers can charge per unit of electricity and gas. Improving your home's energy efficiency reduces the number of units you consume, meaning any cap reduction has a multiplied benefit for well-insulated, efficient homes.
Ofgem – Price CapAt a Glance: Support by Region
| Region | Main schemes available |
|---|---|
| England | BUS, ECO4, GBIS, 0% VAT, SEG, green mortgages |
| Wales | BUS, ECO4, GBIS, Nest, 0% VAT, SEG, green mortgages |
| Scotland | Home Energy Scotland, Warmer Homes Scotland, ECO4, 0% VAT, SEG, green mortgages |
| Northern Ireland | Reconnect programme, NI Sustainable Energy Programme, 0% VAT, SEG |
Frequently Asked Questions
Find out what you could save
Our free Green Home Report analyses your property in minutes and shows exactly which grants you could be eligible for, alongside personalised solar and heat pump savings.
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Last updated: June 2026