The short answer: The Budget on 28 October 2026 gave households a one-off £100 Household Energy Payment (council tax bands A–D in England, from January 2027) and kept 0% VAT on household electricity until 1 July 2027. It asked Ofgem to scrap gas standing charges, aiming for the end of 2027. The Boiler Upgrade Scheme, which gives £7,500 off a heat pump, keeps its £400 million budget for 2027–28, but £1 billion of Warm Homes Plan capital grant was cut. There is no new solar grant, and 0% VAT on solar panels ends on 31 March 2027.
Last verified: 30 October 2026 against Budget 2026 and DESNZ’s Budget energy bills guide.
Every energy change in Budget 2026
| Change | What it means | When |
|---|---|---|
| £100 Household Energy Payment | £100 for homes in council tax bands A–D in England; £2.6 billion, up to 20 million households | From January 2027 |
| £100m council discretionary fund | Extra help from councils for struggling households who miss the £100, including some above band D | When each council sets it up |
| 0% VAT on household electricity | Extended for three more months. DESNZ says it saves about £45 a year on average | 1 October 2026 to 1 July 2027 |
| Gas standing charges to be abolished | Ofgem asked to remove them; costs move to the unit rate | Aiming for end of 2027 |
| Energy debt relief | One-off debt write-off for eligible households who re-engage with their supplier | Scheme launches in 2027 |
| Kerosene heating oil | Import tariffs suspended | 26 November 2026 to 31 December 2028 |
| Boiler Upgrade Scheme | Funding held at £400 million, rising roughly with inflation after | 2027–28 onwards |
| Warm Homes Plan | £1 billion of capital grant cut; “the majority” of low-income funding protected | Not stated |
| VAT on solar, heat pumps, insulation | 0% ends as planned; 5% from 1 April 2027. Heat batteries added to the 5% list | 1 April 2027 |
| British Industrial Competitiveness Scheme | 20–25% off electricity for over 10,000 energy-intensive manufacturers | From April 2027 |
The £100 Household Energy Payment
The biggest new item for households. Most households in council tax bands A to D in England get £100 from January 2027, paid by the local council. If you pay council tax by direct debit you don’t need to do anything; if not, your council will invite you to apply. Second homes and empty homes are excluded. Scotland, Wales and Northern Ireland get extra funding and will decide their own support.
Only your council will contact you about it. You never apply through us, and we will never contact you about it. Read who gets the £100 payment and when.
VAT on electricity: 0% until July 2027
VAT on household electricity was cut from 5% to 0% on 1 October 2026. The Budget extends the cut for another three months, to 1 July 2027. DESNZ says the cut saves households “an average of £45 a year”, and the Budget expects the extension to take “around £50 off the annual Ofgem price cap in April 2027”. It applies in Great Britain now and is expected to apply in Northern Ireland from April 2027.
This is VAT on the electricity you buy. It is a different relief from the 0% VAT on installing solar panels and heat pumps, which ends on 31 March 2027.
Gas standing charges to be scrapped
Gas standing charges average £108 a year for a typical billpayer, according to the Budget. The government has asked Ofgem to abolish them on household bills in Great Britain, “aiming for delivery by the end of 2027 or as soon as possible after then.”
- The costs don’t disappear: DESNZ says they will “move to the unit rate”, so what you pay will depend more on how much gas you use.
- Low gas users should gain. DESNZ says the typical household on median gas use will benefit.
- Some households who can’t avoid high gas use may lose out, and the government says it will set out “targeted mitigation”.
- Electricity standing charges will also be reformed, with details due next year.
Energy debt: a one-off Debt Relief Scheme
DESNZ says that if the billpayer gets means-tested benefits or disability benefits, or is a pensioner, and has built up energy debt since the 2022–24 energy crisis, they will be able to have that debt written off through a Debt Relief Scheme, as long as they take steps to re-engage with paying. Ofgem will consult on the final design, and the Budget says the scheme launches next year (2027).
Heat pumps and the Warm Homes Plan
The Budget makes two changes that pull in different directions:
- £1 billion of capital grant comes out of the Warm Homes Plan. The Budget says “the majority of WHP funding for low-income households and social housing, delivered by mayors and councils, is protected.” The Budget doesn’t say which programmes take the cut.
- The Boiler Upgrade Scheme budget is held. The government “remains committed to heat pump deployment and will maintain the Boiler Upgrade Scheme at current funding levels of £400 million in 2027‑28 and rising broadly in line with inflation thereafter.”
So the heat pump grant is unchanged: £7,500 off an air or ground source heat pump in England and Wales, and £9,000 for homes replacing oil or LPG with no mains gas until 31 March 2027. You can pay the rest with a Warm Homes Loan for a heat pump, which the Budget also mentions. See every route in our heat pump grants guide.
For lower-income homes in England, the free Warm Homes: Local Grant runs to March 2028 through councils. For the bigger picture, read the Warm Homes Plan 2026, and for what changes next year, Warm Homes Plan 2027: every date and the new Warm Homes Agency.
Solar panels and the Budget
People searching “budget 2026 solar panels” want to know if anything changed. In short:
- No new solar grant was announced.
- 0% VAT on installed solar panels and batteries ends on 31 March 2027. The Budget confirms the relief on energy-saving materials will “revert to reduced rate … as planned”, and HMRC says installations go back to 5% VAT from 1 April 2027.
- Heat batteries are added to the list of energy-saving materials that get the 5% reduced rate from 1 April 2027.
- Cheaper finance is now available: the Warm Homes Loan for solar panels lends up to £15,000 for solar and £15,000 for a battery, some interest-free.
| Example only | Installed by 31 March 2027 (0% VAT) | Installed from 1 April 2027 (5% VAT) |
|---|---|---|
| Solar system priced at £7,000 before VAT | £7,000 | £7,350 |
| Solar + battery priced at £11,000 before VAT | £11,000 | £11,550 |
The prices are examples to show the VAT difference, not quotes. For real price ranges, see solar panel costs and solar panel grants.
Heating oil: kerosene tariffs suspended
From 26 November 2026 the government is suspending import tariffs on kerosene heating oil until 31 December 2028. The Budget says this will “support households that rely on heating oil to heat their homes, including many people in rural areas and Northern Ireland.” If you’re on oil and thinking of switching, the £9,000 oil and LPG heat pump grant runs until 31 March 2027.
Businesses: electricity discounts and levies
- British Industrial Competitiveness Scheme: from April 2027, over 10,000 eligible energy-intensive manufacturers in Great Britain get a 20–25% cut to their electricity bills, with a back payment for 2026–27. The Budget says applications are open.
- Climate Change Levy: the main rates for electricity and LPG are frozen from 1 April 2028, and Carbon Price Support ends in Great Britain from April 2028.
- EV charging: new law will confirm that electricity from public and workplace charge points carries 20% VAT, from 1 November 2026. Separately, £100 million over two years will cut costs at local, lower-powered public chargers from spring 2027.
For grants and tax reliefs for business solar, batteries and heat pumps, see business energy grants.
What the Budget means for you
| If you… | What to do |
|---|---|
| Live in a band A–D home in England | Nothing, if you pay council tax by direct debit. Otherwise wait for your council. £100 payment guide |
| Get Pension Credit, Universal Credit or another means-tested benefit | Check the £150 Warm Home Discount and the free energy grants you may qualify for |
| Want solar panels or a battery | Get it installed by 31 March 2027 to keep 0% VAT. Get a solar quote |
| Want a heat pump | The Budget didn’t change the £7,500 grant; £9,000 if you’re off-gas on oil or LPG until 31 March 2027. Get a heat pump quote |
| Heat your home with oil | Import tariffs on kerosene are suspended from 26 November, which may help prices. Compare with the £9,000 heat pump grant |
| Run a business | See business energy grants |
For every scheme deadline in one place, see our energy grant deadline tracker.
Budget 2026 energy: common questions
Did the Budget cut the heat pump grant?
No. The Budget says the government “will maintain the Boiler Upgrade Scheme at current funding levels of £400 million in 2027‑28 and rising broadly in line with inflation thereafter.” The grant is still £7,500 off an air or ground source heat pump in England and Wales, or £9,000 for homes replacing oil or LPG with no mains gas until 31 March 2027.
Is there a solar panel grant in the 2026 Budget?
No new solar grant was announced. Installed solar panels and batteries still pay 0% VAT until 31 March 2027. The Budget confirms VAT on energy-saving materials goes back to 5% from 1 April 2027 “as planned”. Free solar is still possible for some lower-income homes through the Warm Homes: Local Grant, and the Warm Homes Loan offers low-rate and some interest-free finance.
When does 0% VAT on solar panels end?
On 31 March 2027. HMRC says installations of energy-saving materials, which include solar panels, heat pumps, insulation and batteries, “will revert to the reduced rate of VAT of 5%” from 1 April 2027. On a £7,000 system that is £350 more.
Who gets the £100 Household Energy Payment?
Households in council tax bands A to D in England who live in the home as their main home and are liable for the council tax. It is paid by councils from January 2027, automatically if you pay by direct debit. See our £100 Household Energy Payment guide.
When does VAT on electricity go back up?
The 0% VAT rate on household electricity, which started on 1 October 2026, now runs to 1 July 2027. DESNZ says it saves households an average of £45 a year, and the Budget expects it to take around £50 off the annual price cap in April 2027.
Are gas standing charges being scrapped?
The government has asked Ofgem to abolish gas standing charges on household bills in Great Britain, aiming for the end of 2027 or as soon as possible after. The costs move to the unit rate, so low gas users should gain and high users may pay more. The government says it will set out targeted help for some high users.
What happened to the Warm Homes Plan in the Budget?
The Budget takes £1 billion of capital grant out of the Warm Homes Plan. It says “the majority” of the money for low-income households and social housing, delivered by mayors and councils, is protected. The Boiler Upgrade Scheme budget is held, and the Warm Homes Loan Scheme has launched.
Does the Budget help homes that use heating oil?
Partly. From 26 November 2026 the government is suspending import tariffs on kerosene heating oil until 31 December 2028, which it says will support households that rely on heating oil. Oil-heated homes with no mains gas can also get £9,000 off a heat pump until 31 March 2027.
Is Great British Energy Guide part of the government?
No. We are an independent grants guide, not the government, HM Treasury or the government-owned Great British Energy company. We explain what the Budget means; we don’t run any of these schemes.