Solar Panel Grants in the UK: What You Need to Know in 2025

Solar Panel Grants in the UK: What You Need to Know in 2025

Introduction

At Solar Costs, we know that switching to solar energy is one of the smartest investments homeowners can make. With the rising cost of electricity and increasing concerns about sustainability, more people in the UK are exploring ways to go green and reduce their energy bills. However, one of the biggest concerns for potential solar panel buyers is affordability.

Many people search for solar panel grants in the UK, hoping to find government incentives to help with the cost. The reality is that while traditional solar grants are no longer available, there are still significant savings to be had. The UK government has made solar panels 20% cheaper by removing VAT, and energy providers with over 150,000 customers are now required to pay you for any excess energy you export back to the grid.

In this guide, we at Solar Costs will break down how you can benefit from these savings and why now is the perfect time to invest in solar panels.

Understanding the 0% VAT on Solar Panels

What Has Changed?

Previously, solar panel installations were subject to a 5% VAT rate. However, in April 2022, the UK government introduced a 0% VAT rate on energy-saving materials, including solar panels, heat pumps, and insulation. This initiative is set to last until March 2027, meaning homeowners can enjoy an instant 20% saving on their solar panel installation.

How Much Can You Save?

The average cost of a solar panel system in the UK ranges from £5,000 to £9,000, depending on the size of the installation. With the 0% VAT rate:

• A £6,000 solar panel system would have cost £7,200 under the old 20% VAT rate.

• Now, the same system only costs £6,000, saving you £1,200 instantly.

This significant reduction means solar panels are more accessible than ever, making it the perfect time to invest in renewable energy.

Who Qualifies for 0% VAT?

The 0% VAT applies to residential properties only, including homeowners, landlords, and housing associations. It also covers both new and existing properties, so whether you're building a new home or upgrading an older one, you can take advantage of these savings.

The Smart Export Guarantee (SEG) – Get Paid for Excess Energy

What Is the Smart Export Guarantee (SEG)?

Another way UK homeowners can benefit financially from solar panels is through the Smart Export Guarantee (SEG). Under this scheme, energy providers with over 150,000 customers must pay you for any excess electricity you generate and send back to the grid.

This means that if your solar panels produce more electricity than you use, you won't waste that energy—you’ll be paid for it!

How Much Can You Earn from SEG?

The rates vary by provider, but they typically range from 2p to 15p per kWh exported. Here’s an example of how much you could earn:

• A typical UK household exports around 1,500 kWh of electricity per year.

• If you sign up for a provider offering 10p per kWh, you could earn £150 per year.

• If you get a higher rate of 15p per kWh, you could earn £225 per year.

Best SEG Rates in 2024

Different energy providers offer different SEG rates, so it's crucial to shop around for the best deal. Some of the best-paying energy suppliers include:

• Octopus Energy – up to 15p per kWh

• E.ON – around 5.5p per kWh

• Scottish Power – 5.5p per kWh

• British Gas – 6p per kWh

It’s important to note that you don’t need to be a customer of the energy provider to sign up for their SEG tariff. This gives you flexibility to choose the best rate available.

Why Now Is the Best Time to Invest in Solar Panels

1. Energy Prices Are at Record Highs

With electricity costs soaring, reducing reliance on the National Grid can lead to substantial savings. Households with solar panels can save between £300 and £600 per year on electricity bills.

2. Solar Panel Prices Have Dropped

In addition to the 0% VAT, solar panel prices have fallen by over 80% in the last decade due to technological advancements and increased demand. This means the cost-to-benefit ratio is better than ever.

3. Increase the Value of Your Home

Homes with solar panels are more attractive to buyers, with studies showing they can increase property value by up to 4%. This means investing in solar energy can provide financial returns if you decide to sell your home.

4. Reduce Your Carbon Footprint

Generating your own clean energy reduces your household’s CO2 emissions by up to 1.5 tonnes per year, helping combat climate change.

How to Get Started with Solar Panels

1. Find a Reliable Solar Panel Installer

At Solar Costs, we connect homeowners with trusted and accredited solar panel installers. It’s essential to choose a MCS-certified installer to qualify for the Smart Export Guarantee (SEG).

2. Get a Free Quote

We provide free, no-obligation quotes tailored to your home’s energy needs. This allows you to compare options and make an informed decision.

3. Install and Start Saving

Once installed, your solar panel system will immediately start generating electricity. You’ll see savings on your bills from day one, and if you opt into an SEG tariff, you’ll begin earning money for any surplus energy.

Conclusion: Take Advantage of UK Solar Incentives Now

While traditional solar panel grants no longer exist, the UK government’s 0% VAT initiative and the Smart Export Guarantee provide significant financial benefits to homeowners looking to install solar panels. With energy prices remaining high, there’s never been a better time to invest in solar power.

At Solar Costs, we’re here to help you make the transition to renewable energy seamless and cost-effective. Contact us today to get your free solar panel quote and start saving on your energy bills while contributing to a greener future.

Interested in installing solar panels? Get in touch with Solar Costs today!