⚡ Key Takeaways
- ECO4 provides free solar panels to eligible households on benefits (EPC D-G required)
- 0% VAT on all residential solar panel installations (since April 2022)
- Smart Export Guarantee (SEG) pays you for surplus electricity exported to the grid
- Average 4kW system costs £6,000-£8,000 (before grants), with 25-year lifespan
- Typical annual savings: £300-£600 on electricity bills
- Always use an MCS-certified installer to protect your eligibility for grants and SEG
Key facts: Free solar through ECO4 for low-income households (worth £5,000–£8,000). 0% VAT on all solar installations until March 2027. Smart Export Guarantee pays 4p–15p/kWh for surplus electricity. Typical payback: 6–10 years with 25–30 year lifespan.
There's no single "solar panel grant" in the UK. But there are several government schemes, tax incentives, and programmes that can significantly reduce the cost — and in some cases, get you solar panels completely free.
1. Free solar through ECO4
The ECO4 scheme can fund solar PV panels for eligible households at no cost. Solar is typically installed alongside other measures (insulation, heating) as part of ECO4's whole-house approach.
What you get
- 3–4 kWp system (8–12 panels)
- Inverter included
- Private market value: £5,000–£8,000
- Panels belong to you
Who's eligible
- Benefits-based: Universal Credit, Pension Credit, Income Support, JSA, ESA, Housing Benefit, Child Tax Credit, Child Benefit
- Or LA Flex referral from your local council
- EPC rating D, E, F, or G
ECO4 has been extended to 31 December 2026.
2. 0% VAT on solar (until March 2027)
Since April 2022, solar panel installations carry 0% VAT instead of 20%. This applies to everyone — no income tests.
- 3 kWp system: save £1,000–£1,200
- 4 kWp system: save £1,200–£1,500
- 6 kWp system: save £1,600–£2,000
Also covers battery storage, heat pumps, and insulation materials.
The 0% rate runs until 31 March 2027, then reverts to 5%.
3. Smart Export Guarantee (SEG)
Once you have solar panels, the SEG pays you for surplus electricity exported to the grid.
Requirements
- Solar PV panels (any domestic size)
- Smart meter (free from your supplier)
- MCS-certified installation
How much can you earn?
- Typical rates: 4p–15p per kWh
- Best fixed rates: 12p–15p/kWh
- Agile tariffs can exceed 25p/kWh at peak times
For a 4 kWp system exporting 1,500–2,500 kWh/year: £75–£375/year in SEG income.
The bigger saving is self-consumption — every kWh you use yourself is one you don't buy at ~24p/kWh, typically saving £300–£700/year.
4. Solar + heat pump = maximum savings
The Boiler Upgrade Scheme offers £7,500 towards a heat pump. A heat pump powered by your own solar electricity is one of the cheapest ways to heat a home.
Solar panel costs in 2026
| System Size | Cost (inc 0% VAT) | Annual Savings | Payback |
|---|---|---|---|
| 3 kWp (8 panels) | £5,000–£6,000 | £400–£600 | 8–12 years |
| 4 kWp (10–12 panels) | £6,000–£7,500 | £500–£750 | 8–12 years |
| 6 kWp (15–18 panels) | £8,000–£10,000 | £700–£1,000 | 8–12 years |
| Battery add-on | £2,500–£5,000 | £200–£400 | — |
With 0% VAT and SEG income, payback can drop to 6–10 years. Panels last 25–30+ years.
Is solar worth it in 2026?
Yes, for most homeowners.
- 0% VAT until March 2027
- Electricity prices remain high (~24p/kWh)
- Battery storage costs have fallen
- SEG provides ongoing income
- Solar increases property value
- Typical 4 kWp system saves ~1–1.5 tonnes CO₂/year
Especially strong if you're home during the day, have an EV, plan a heat pump, or combine with battery storage.
5. Local authority schemes
Solar Together
A group-buying scheme run by several councils. Discounts of 20–30% below market prices. Check solartogether.co.uk.
Local energy programmes
Some councils run their own solar schemes for low-income households, social housing, or community projects. Contact your council's energy or housing team.
Next steps
- Check if you qualify through Great British Energy grants guide for free solar through ECO4
- Get quotes from MCS-certified installers — compare at least 3
- Install before March 2027 to benefit from 0% VAT
- Sign up for the Smart Export Guarantee
- Check local schemes — Solar Together or council programmes