Solar Panel Financing: How to Finance Your Solar Panel Installation
Investing in solar energy is an excellent way to cut your electricity bills and reduce your carbon footprint. However, the initial cost of installation can be a significant hurdle for many homeowners. In this 2026 guide, the team at LODEAL by REST UK, an MCS-certified solar installer, explains the main ways to pay for solar panels in the UK. From VAT relief and grants for eligible households to finance and savings, there are several ways to make solar more affordable.
Table of Contents
1. Solar Panel Grants and Subsidies
The Feed-in Tariff (FiT) closed to new applicants in 2019 and the Green Homes Grant ended in 2021, so there is no universal solar grant for UK homeowners today. However, every household benefits from tax relief: qualifying home solar and battery installations are currently zero-rated for VAT, a saving that is scheduled to change to the reduced 5% rate on 1 April 2027. Some lower-income households may also qualify for government-funded energy efficiency schemes delivered through local councils or energy suppliers, which can sometimes include solar panels. Eligibility rules vary.
2. Green Loans for Solar Panels
Green loans and home improvement finance are designed to help spread the cost of energy-efficient upgrades, including solar panels and batteries. Some installers can also arrange finance at the point of sale. At LODEAL by REST UK, we’re an FCA-regulated credit broker (not a lender) and work with Tandem Bank, thisbank and Propensio Finance. Finance is subject to status and affordability, and the rate you’re offered will depend on your circumstances. The savings you make on energy bills can help towards repayments, but they won’t always cover them in full, so make sure the monthly cost suits your budget. Find out more on our solar finance page.
| Loan Type | Interest Rate | Repayment Period |
|---|---|---|
| Green Loan | Varies by lender and status | 5-10 years |
| Personal Loan | Varies by lender and status | 2-7 years |
| Credit Card | Usually higher than loans | 1-2 years |
3. Power Purchase Agreements (PPAs)
Power Purchase Agreements (PPAs) are rare for UK homes today, but you may still come across them. They allow you to have solar panels installed at no upfront cost. Instead, a third-party company installs the panels on your roof, and you agree to buy the electricity they generate at a reduced rate. While you don’t own the panels, you still benefit from lower energy bills without the initial financial burden.
4. Solar Leasing Options
Another financing method to consider is leasing your solar panels. Like a PPA, a third-party company installs the panels, but instead of purchasing the electricity, you pay a fixed monthly fee for the equipment. At the end of the lease period, you may have the option to purchase the panels outright. Leasing can reduce the initial outlay, but domestic solar leases are uncommon in the UK and can complicate selling or remortgaging your home, so read the terms carefully.
5. Personal Loans for Solar Installation
If you prefer to own your solar panels outright but don’t have the cash upfront, a personal loan can be a good solution. Many lenders offer personal loans for home improvements, including solar installation. While interest rates may be higher than specialised green loans, a personal loan offers flexibility in terms of the loan amount and repayment period.
6. Self-Financing Options
If you have savings set aside, self-financing your solar panel installation can be the most straightforward option. By paying for the installation upfront, you avoid interest rates and monthly payments, allowing you to enjoy the full savings from your reduced energy bills right away.
7. Smart Export Guarantee (SEG)
The Smart Export Guarantee (SEG) allows homeowners to sell any excess solar energy they generate back to the grid. While the SEG isn’t a direct financing option, it can provide an additional income stream to help offset the cost of your solar investment over time. Suppliers set their own rates, and you’ll normally need an MCS certificate for your installation to qualify.
Ready to Make the Switch to Solar?
Solar power can lower your bills, reduce your environmental impact and give you more control over your energy.
Want to know what solar would cost for your home, and how you could pay for it? LODEAL by REST UK is an MCS-certified installer with more than 10,000 installations across England and Wales. Get a free, no-obligation quote or call 03305 202053.
FAQs
As an indicative guide, a typical home solar system costs from around £4,000 to £12,000, depending on system size, roof and whether you add a battery. Your final cost depends on a survey of your home. Qualifying installations are currently zero-rated for VAT.
Factors include system size, panel and inverter choice, whether you add a battery, your roof type and condition, scaffolding needs and access.
For many homes they can be. Solar panels can reduce your electricity bills and earn Smart Export Guarantee payments for surplus power. How much you save depends on your roof, your usage and your tariff.
Most solar panels have a lifespan of 25 to 30 years, and some panels now carry warranties of up to 30 years. Inverters usually need replacing sooner.
Yes. LODEAL by REST UK is an FCA-regulated credit broker (not a lender) working with Tandem Bank, thisbank and Propensio Finance. Finance is subject to status and affordability. Learn more about solar finance or get a free quote.
