0% Interest Loans for Solar and Batteries Are Coming: What Essex Homeowners Should Know
If you've been thinking about solar panels, a home battery or a heat pump but the upfront cost has held you back, this week's news is worth a look. On 18 October The i Paper reported that a new government-backed loan scheme for green home upgrades is set to be unveiled, with interest rates as low as zero per cent on offer. Here's what we know so far, what it could cover, and how to get ready.
What is the Warm Homes Loan Scheme?
The Warm Homes Loan Scheme is part of the government's Warm Homes Plan. According to GOV.UK, it will put £300 million of grant funding behind lenders so they can offer cheaper finance for home energy upgrades. The i Paper explains that the Treasury will pay participating lenders up to 20 per cent of the loan amount, which lets them cut their rates by up to five percentage points. So a solar loan that would normally cost 7 per cent could come down to around 2 per cent.
Some lenders may get close to zero per cent, but The i Paper's sources say most larger lenders are likely to land somewhere around 2 to 4 per cent. That still compares well with the best mainstream personal loans, which the paper puts at around 5.9 per cent APR.
What could you borrow for?
Loans will run for at least three years. The i Paper lists these maximum amounts for the technologies we install most:
Solar panels: up to £15,000.
Battery storage: up to £15,000, whether it's a standalone battery or paired with solar.
Air source heat pump (air to water): up to £20,000, and it can be used alongside a Boiler Upgrade Scheme grant to cover the rest of the cost.
EV chargers: the official scheme rules say an EV charger can be included as part of a solar or battery installation.
Two things are not covered. The loans won't pay for insulation, and the scheme rules say air-to-air heat pumps, which is what most air conditioning systems are, aren't eligible yet. They can only be added once new MCS installation standards have been developed. The rules also say every eligible system must be an MCS certified product fitted by an installer who is MCS certified for that technology, so it's worth checking that before you sign anything.
When does it start?
Not quite yet. The i Paper says lenders were expecting an earlier launch, but sources now point to after the Budget at the end of October, and the full list of lenders hasn't been announced. A spokesperson for the Department for Energy Security and Net Zero said the scheme "will offer low-interest or zero-interest financing for home energy upgrades" and that more details will follow shortly.
Why it matters this winter
Ofgem's price cap for October to December is £1,723 a year for a typical household paying by Direct Debit, with electricity at 26.32p per kWh. Forecasts reported by the BBC suggest bills could rise again in January, although Ofgem won't confirm the new cap until late November. Generating and storing more of your own electricity is one of the most reliable ways to take some control back.
There's a tax bonus too. Under HMRC rules, solar panels and home batteries currently qualify for 0% VAT, and that zero rate runs until 31 March 2027.
How to get ready now
You don't need to wait for the lenders to be named to start planning. A free survey tells you what size of solar system or battery suits your roof and your usage, and gives you a written quote you can take to a lender as soon as the scheme opens. As a trading name of CPW Electrical Solutions Ltd, we can also check your consumer unit and wiring are ready, so there are no surprises on the day.
Solar, batteries and heat pumps across Essex and East London
Winsolar designs and installs solar PV, battery storage, heat pumps, air conditioning and EV chargers for homes and businesses across Upminster, Brentwood, Basildon, Chelmsford, Romford, South Essex and East London.
Want a quote ready for when cheaper green loans arrive? Call us on 07545 571230 or use our website contact form for a free, no-obligation quote.
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