What it means for youHousehold bills
Cheaper loans for solar panels, batteries and heat pumps. How the new Warm Homes Loan scheme works
Ten lenders are offering no- and low-interest loans across the UK. It is still borrowing, and grants may cover part of the cost first.
Published 29 October 2026Last checked 29 October 2026UK-wideFrom Department for Energy Security and Net Zero
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What's happening
The government has started a Warm Homes Loan scheme offering no- and low-interest loans for solar panels, home batteries and heat pumps, through ten lenders to begin with. It is open across the UK, and the government says rates can be up to 5 percentage points lower than regular loans. It is still a loan, so the lender checks you can afford it, and the work must be done by an installer certified by MCS (the Microgeneration Certification Scheme).
The question: What is the Warm Homes Loan scheme, who can use it and what are the catches?
The policy
- Announced by
- Department for Energy Security and Net Zero
- Announced on
- 2026-10-27
- Stage
- in force
- Takes effect
- Ten lenders are offering loans now. More are expected to join.
- Homeowner borrowing £10,000: Up to £285 a year less in repayments than a regular 8% loan over seven years (government example).
- Homeowner in England or Wales fitting an air source heat pump: £7,500 grant, then a loan of up to £20,000 for the rest.
- Homeowner fitting a ground source heat pump: Loan of up to £35,000, plus the £7,500 grant in England and Wales.
This applies to you if…
- You own your home
- You are thinking about solar panels, a home battery, a heat pump, a biomass boiler or a heat network connection
- You could pass a lender's normal affordability and credit checks
- You are happy to use an MCS-certified installer
Not for you if…
- People who need help but cannot take on debt. Free or grant-funded schemes for lower-income homes may suit better
- Tenants. The government factsheet talks about homeowners and does not mention tenants or landlords
What it's worth
The government says loans can be up to 5 percentage points cheaper than regular loans, and some are interest-free. It also says a heat pump, battery and solar panels together could cut bills by up to £550 a year, and by a further £300 a year with a time-of-use tariff.
The government's own example
- Borrow £10,000 at 8% over seven years on a regular loan.
- The government says that costs about £155 a month.
- Through the scheme, a lower rate could cut repayments by up to £285 a year.
Up to £285 a year less in repayments
Figures from the DESNZ factsheet, 27 October 2026. Your rate depends on the lender and your credit record.
How to do it
- 1
Get quotes from MCS-certified installers
All installations except heat network connections must be done by an MCS-certified installer. Some lenders only work with particular installers.
Takes about A few weeks
- 2
In England and Wales the Boiler Upgrade Scheme gives £7,500 towards an air source or ground source heat pump. In Scotland, ask Home Energy Scotland. The factsheet says you can combine a loan with a grant.
- 3
Apply to a participating lender or installer
The first ten lenders are Homeserve (with E.On), Hometree Finance, Propensio, Secure Trust Bank, Selina Finance, South Manchester Credit Union, Sunsave, Tandem Bank, The Money Co-op and This Bank.
- 4
Compare the total amount repayable
The government says to look at the total cost, the length of the loan and any monthly fees, not only the monthly payment.
- 5
Keep your paperwork
Keep the quote, finance agreement, invoice, proof of purchase and MCS certificate.
Deadline
No end date announced
The government says this is the first part of the scheme and more lenders and products are expected to join.
The catches
It is debt
Lenders run normal affordability, credit and eligibility checks. Missing payments could harm your credit record.
Long terms cost more in total
Some loans run for up to 30 years. A lower monthly payment over a longer time can mean paying more overall.
Some loans may be secured
MoneySavingExpert reports that some loans in the scheme are secured on your home (a second mortgage). Check whether yours is before signing.
Watch the installation price
A cheap loan is not good value if the price of the work is high. Get more than one quote. MoneySavingExpert has warned that scammers may claim to be part of the scheme.
Savings depend on your home
The £550 figure is for a heat pump, battery and solar panels together. One item alone will save less, and results vary by home and usage.
Illustrative example
Sam, replacing an old gas boiler with an air source heat pump in England
Sam owns a three-bedroom house. An MCS-certified installer quotes for an air source heat pump.
- The installer applies for the £7,500 Boiler Upgrade Scheme grant, which comes off the price.
- Sam borrows the rest through a scheme lender. Air-to-water heat pump loans go up to £20,000.
- Sam compares the total repayable over five, ten and fifteen years before choosing.
Sam pays less upfront and spreads the rest at a lower rate than a regular loan, if the lender approves the application.
Illustrative example using the grant and loan limits on GOV.UK. Actual costs, rates and savings vary.
What this means for…
- Own outright: You can apply, subject to the lender's affordability and credit checks.
- Have a mortgage: You can apply. MoneySavingExpert reports some scheme loans are secured on your home, so check the loan type before signing.
- Renting: The factsheet is aimed at homeowners. Your landlord would need to decide on any installation.
Common misreadings
You might hear: This is free money from the government.
Actually: It is a loan you pay back. Some loans are interest-free, but most are low-interest, and lenders check you can afford them.
You might hear: I'll save £550 a year with solar panels.
Actually: The government's £550 figure is for a heat pump, battery and solar panels together.
You might hear: I can't use a grant if I take the loan.
Actually: The factsheet says homeowners can combine a loan with the Boiler Upgrade Scheme grant or Home Energy Scotland support.
Where the UK nations differ
- England
- Loans available. The Boiler Upgrade Scheme grant can be combined with a loan.
- Wales
- Loans available. The Boiler Upgrade Scheme also covers Wales.
- Scotland
- Loans available. The Boiler Upgrade Scheme does not cover Scotland. Home Energy Scotland support can be used alongside a loan.
- Northern Ireland
- Loans available. GOV.UK says the Boiler Replacement Scheme in Northern Ireland is now closed.
What you could do
own your home and are planning a heat pump, solar panels or a battery
Get quotes from MCS-certified installers and ask which scheme lenders they work with.
live in England or Wales and want a heat pump
Check the £7,500 Boiler Upgrade Scheme grant before borrowing.
live in Scotland
Contact Home Energy Scotland about grants you could combine with a loan.
Timeline
27 October 2026
Factsheet published
DESNZ lists the first ten lenders and loan limits.
The detail
The rules
- Loan limits: solar panels £15,000; battery £15,000; air-to-water heat pump £20,000; air-to-air heat pump £10,000 (once MCS certification is available); ground source heat pump £35,000; biomass boiler £20,000; heat network connection £7,500; micro-renewable system £20,000.
- Rates up to 5 percentage points lower than regular loans; some interest-free.
- Up to 30 years to repay in some cases.
- Boiler Upgrade Scheme (England and Wales): £7,500 for air or ground source heat pumps, £5,000 for biomass boilers, £2,500 for air-to-air heat pumps, plus £1,500 extra until March 2027 for some homes heated by oil or LPG with no mains gas. One grant per property.
References
- Warm Homes Loan Scheme factsheet: Loan limits, lenders, MCS rule
- Boiler Upgrade Scheme guidance: Grant amounts and who can apply
Words explained
- Heat pump
- A device that moves heat from the air or ground into your home, run on electricity.
- MCS
- The Microgeneration Certification Scheme, which certifies installers of heat pumps and solar panels.
- Time-of-use tariff
- An energy tariff where electricity is cheaper at certain times of day.
- Secured loan
- A loan tied to your home, which the lender could claim if you don't repay.
- Boiler Upgrade Scheme
- A grant in England and Wales towards a heat pump or biomass boiler.
In short
Homeowners anywhere in the UK can now get cheaper or interest-free loans for solar panels, batteries and heat pumps through ten lenders. It is still debt, so compare the total you would repay. In England and Wales, check the £7,500 heat pump grant first, and use an MCS-certified installer.
Related dates
- 29 Oct Ofgem Market Stabilisation Charge consultation closesDeadline · today
- 25 Nov Ofgem announces the January to March 2027 price capAnnouncement · in 27 days
- 1 Jan New energy price cap takes effectChange · in 64 days
- 1 Jan £100 Household Energy Payment beginsChange · in 64 days
- 23 Feb Ofgem announces the April to June 2027 price capAnnouncement · in 117 days
- 26 Feb Warm Home Discount helpline deadlineDeadline · in 120 days
Sources
- Warm Homes Loan Scheme: factsheet, Department for Energy Security and Net Zero (2026-10-27)
- Apply for the Boiler Upgrade Scheme, GOV.UK
- Boiler Upgrade Scheme: what you can get, GOV.UK
- Boiler Upgrade Scheme: check if you're eligible, GOV.UK
- Find an installer, MCS
- Home Energy Scotland, Home Energy Scotland
- Warm Homes loan scheme (news pointer), MoneySavingExpert (2026-10-26)
This is guidance, not regulated financial advice. Check figures against the linked official source before you act. Written with AI assistance and checked against primary sources. How Kitty works. For free, impartial help, try MoneyHelper or Citizens Advice.