Cutting energy bills by going solar got cheaper in 2026, but the grant landscape has changed significantly. The flagship ECO4 scheme ended in March 2026 and was replaced by ECO5 in April 2026. The Boiler Upgrade Scheme has been extended to 2030 with a £2.7 billion budget, and 0 per cent VAT on solar PV, batteries and heat pumps is confirmed until 31 January 2027. Here’s the complete 2026 guide to UK solar and energy grants — what’s available, who qualifies, and how to claim.
UK Energy Grants 2026 at a Glance
| Scheme | What It Covers | Maximum Grant | Status April 2026 |
|---|---|---|---|
| ECO5 | Insulation, heat pumps, solar PV (means-tested) | Up to full install cost | Live from April 2026 |
| Boiler Upgrade Scheme (BUS) | Air-source & ground-source heat pumps | £7,500 (air-water), £2,500 (air-air) | Extended to 2030 |
| Warm Homes Plan | Insulation, low-cost solar finance | Variable; loan based | Active |
| 0% VAT Relief | Solar PV, batteries, heat pumps | Saves 20% off install | Until 31 January 2027 |
| Smart Export Guarantee (SEG) | Payments for excess solar exported to grid | ~5–15p / kWh | Active (set by suppliers) |
ECO5: The New Energy Company Obligation Scheme
ECO5 launched in April 2026 as the successor to ECO4. Funded by an obligation on the largest energy suppliers, it pays for energy-efficiency upgrades for low-income households and homes with poor EPC ratings (typically band D or worse). Importantly, ECO5 allows households that previously received ECO4 measures to apply again for additional upgrades — so if you got insulation under ECO4, you may still qualify for solar or a heat pump under ECO5.
You may qualify for ECO5 if:
- You receive certain means-tested benefits (Universal Credit, Pension Credit, Income Support, etc.)
- Your household income is below £31,000 a year and your home is EPC band D, E, F or G
- You’re referred under the LA Flex (local authority flexibility) route — eligibility varies by council
Apply through your energy supplier’s ECO portal or via an Ofgem-registered installer. Solar PV is only available under ECO5 where it will reduce heating costs — typically homes with electric heating or hydronic heat pumps.
Boiler Upgrade Scheme: £7,500 Towards a Heat Pump
The Boiler Upgrade Scheme (BUS) is open to most homeowners in England and Wales, regardless of income. In 2026 the grants are:
- £7,500 off the cost of an air-source heat pump (air-to-water)
- £7,500 off the cost of a ground-source heat pump
- £2,500 off the cost of a new air-to-air heat pump (introduced 2026)
- £5,000 off the cost of a biomass boiler (rural off-grid only)
The BUS budget was tripled to £2.7 billion and the scheme has been extended to 2030. Your installer applies on your behalf and discounts the grant from your invoice — you don’t pay upfront and claim later.
0% VAT on Solar, Batteries and Heat Pumps
The 0 per cent VAT relief on energy-saving materials is in force until 31 January 2027. It applies to:
- Solar photovoltaic (PV) panels and inverters
- Battery storage systems (including retrofit batteries added to existing solar arrays)
- Air-source and ground-source heat pumps
- Installation labour for all of the above
On a typical 4kW solar PV install costing £7,500, the VAT saving is roughly £1,500. After January 2027 the VAT rate is currently scheduled to return to 5 per cent. If you’re considering solar, getting it installed before the end of 2026 locks in the maximum saving.
How Much Can You Save with Solar in 2026?
| System | Install Cost (after 0% VAT) | Annual Bill Saving | Payback Period |
|---|---|---|---|
| 4kW solar PV (no battery) | £6,500–£8,000 | £500–£700 | 10–12 years |
| 4kW solar PV + 5kWh battery | £10,000–£12,000 | £800–£1,100 | 9–11 years |
| Air-source heat pump (after BUS grant) | £3,000–£6,000 net | £200–£500 vs gas | 8–15 years |
Smart Export Guarantee: Get Paid for Spare Solar
Under the Smart Export Guarantee (SEG), every licensed energy supplier with more than 150,000 customers must offer at least one tariff that pays you for surplus electricity you export to the grid. Best 2026 SEG tariffs:
- Octopus Outgoing Fixed — 15p per kWh flat rate (best for daytime exporters without a battery)
- Octopus Flux — variable, peak export 28–35p per kWh during evening peak (best for households with batteries)
- EDF Export Variable — tracks wholesale price, averages 8–10p per kWh
- British Gas Export & Earn Plus — 6.4p per kWh flat
Frequently Asked Questions
Are there free solar panels in the UK in 2026?
Genuinely free solar panels are only available through ECO5 to households on means-tested benefits or with low incomes (under £31,000) and a poor EPC rating. Everyone else pays for installation but benefits from 0 per cent VAT until January 2027.
What is the difference between ECO4 and ECO5?
ECO4 ran from April 2022 to March 2026 with a £4 billion budget. ECO5 launched in April 2026 as a direct successor with similar eligibility but allows previous ECO4 recipients to apply again for additional measures (e.g. heat pumps after insulation).
How much is the heat pump grant in 2026?
The Boiler Upgrade Scheme grant in 2026 is £7,500 for an air-source or ground-source heat pump, or £2,500 for an air-to-air heat pump (a new option introduced in 2026). The grant is paid to your installer and discounted from the invoice — you don’t claim it back yourself.
When does 0% VAT on solar panels end?
The 0 per cent VAT rate on solar PV, batteries and heat pumps applies until 31 January 2027. After that, VAT on energy-saving materials is currently scheduled to return to 5 per cent — so installing before the end of 2026 locks in the maximum saving.
Can I get a grant for solar panels and a heat pump together?
Yes — the BUS grant (heat pump) and ECO5 (solar/insulation) can be combined where eligibility overlaps. 0 per cent VAT applies to both regardless of grant status. Installing a heat pump alongside solar plus battery is the most efficient set-up for cutting bills, but the upfront cost is higher.
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