Solar panel finance: costs, ownership and funding options

Solar panels can reduce the electricity you buy from the grid, but the financial result depends on the installation, energy use, tariffs and financing costs. See related guidance.

However, the initial cost of installing solar panels can be a significant barrier.

Fortunately, various financing options are available to make solar energy more accessible. This guide explores different ways to finance your solar installation, including pay-monthly options, government grants, loans, and community initiatives.

Why Invest in Solar Energy?

Before diving into financing options, it’s essential to understand the benefits of installing solar panels:

• Electricity bills: using your own generation can reduce grid purchases. Installation, finance, maintenance and replacement costs still need to be included.
• Environmental Benefits: By switching to renewable energy, you reduce your carbon footprint and contribute to a greener planet.
• Property value: do not assume a guaranteed increase in resale value. The installation, ownership arrangements and any finance commitments can matter to a buyer.
• Government Incentives: Various schemes and tax breaks make solar installation more affordable.
• Battery storage: a battery can increase use of generated electricity, but adds cost and does not necessarily provide power during an outage.
• Energy prices: solar can reduce exposure to some grid-price changes, but you may still need an electricity supplier and must pay applicable standing charges.

1. Pay-Monthly Solar Finance Plans

Some installers, including Heatable, advertise payment plans. Check the current lender, eligibility requirements, cash price and credit terms before applying. See related guidance.

Spreading payments reduces the upfront amount needed, but interest and fees can increase the total cost. Compare finance with paying from affordable savings and any available grant support.

How Do Pay-Monthly Solar Plans Work?

• Deposit: check whether a deposit is required and when it becomes payable.
• Term: compare the repayment period and total amount payable, rather than assuming a standard range.
• Rate and affordability: use your actual quotation, including fees. A low monthly figure does not establish that the finance is affordable or good value.
• Early repayment: check whether charges apply and how any interest rebate is calculated.
• Savings: do not assume energy savings will cover loan payments. Ask for realistic generation and usage assumptions and compare the combined energy and finance costs.

Solar packages paid for monthly See related guidance.

Sunsave Plus uses an unsecured loan to finance the system and installation, with a monitoring and maintenance package. Sunsave says customers own the system from installation; it is not a roof lease.

What to check in a monthly package See related guidance.

• Upfront payment: establish the deposit, cash price and total credit cost in your quotation.
• Maintenance and protection: read the service terms, exclusions and duration. Do not assume every repair or loss is covered.
• Monthly payments: check the term, interest, fees and what happens if you miss payments or move home.
• Battery: check whether it is included, its capacity and the replacement terms.

Compare the package’s ownership, finance and service obligations with buying outright. A monthly “subscription” label does not mean that the supplier retains ownership or that you can cancel the credit at any time.

3. Personal Loans and Green Mortgages

A personal loan or additional mortgage borrowing may be an option, subject to checks. Compare the overall cost and risks with installer finance and available assistance. See related guidance.

Personal Loans for Solar Panels

• Security: personal loans are commonly unsecured. Borrowing secured on your home puts it at risk if repayments are not maintained.
• Competitive Interest Rates: Banks and credit unions offer loans with varying interest rates, depending on credit history.
• Repayment term: a longer period can lower monthly payments while increasing the total interest paid.
• Timing: approval and payment times vary. Do not commit to installation on the assumption that finance will be approved immediately.

Green Mortgages and Home Improvement Loans

Some lenders offer products or incentives linked to energy efficiency. Offers and eligibility change; obtain current terms directly from the lender.

• Cashback: check whether an offer exists for your lender and mortgage, and whether solar installation qualifies.
• Eligibility: incentives can depend on the property, installation evidence, completion dates and other conditions.
• Total cost: compare the mortgage rate, fees and term as well as any advertised incentive. The cheapest incentive is not necessarily the cheapest borrowing.

4. Government Grants and Schemes

Grant availability depends on where you live, household circumstances and the property. Check current official or council guidance before relying on funding.

Energy-efficiency assistance See related guidance.

Schemes and funding rounds change. Ask your council or energy supplier which schemes are currently accepting applications, whether solar is an eligible measure and what assessment is required.

Warm Homes: Local Grant in England See related guidance.

The Warm Homes: Local Grant supports eligible households and homes in England through participating local authorities. Solar may be among the measures considered; eligibility does not guarantee a particular installation.

VAT Reduction on Solar Panels

Qualifying installed energy-saving materials, including solar panels, are currently zero-rated for VAT until 31 March 2027, with a 5% rate scheduled from 1 April 2027. Buying equipment without installation can have different VAT treatment. Removing 20% VAT is not a 20% discount on a VAT-inclusive price.

The Smart Export Guarantee (SEG)

The Smart Export Guarantee can pay eligible households for metered electricity exported to the grid. Supplier tariffs, eligibility and contract terms vary; export income is not guaranteed to cover finance costs.

5. Community Solar Initiatives

Local councils and community groups often run collective solar buying programs to make installations more affordable.

Solar Together Scheme

Group-buying schemes may arrange quotations, but compare the full specification, price, installer credentials, warranties and finance terms with alternatives.

Local Authority Support

Some local councils offer additional grants or low-interest loans for homeowners installing solar panels. Check with your local authority for available programs.

Choosing the Right Solar Financing Option

When selecting a financing option, consider the following factors:

• Upfront Costs: Determine whether you can afford an initial deposit or if you prefer a zero-deposit plan.
• Monthly Payments: Ensure that the repayment plan fits your budget.
• Ownership and obligations: distinguish an unsecured loan, a lease and a service package. Check what happens on sale of the property and whether any consent is required.
• Eligibility for Grants: Check if you qualify for government incentives to reduce costs.
• Return on Investment: Assess how quickly your savings on energy bills will offset the installation cost.

Conclusion

Whether solar is financially worthwhile depends on the property and the full costs and savings. Compare realistic quotations and check finance affordability before committing.

Read the credit agreement, installation terms, warranties and grant conditions together. Check current provider offers instead of relying on historic rates or cashback figures.

An installation can support lower grid use, but savings, resale value and payback time are uncertain. Allow for maintenance, replacements and changes in tariffs and household use.