Government-backed Warm Homes Loan scheme launches for UK energy upgrades
Households across the UK can now access low-interest or interest-free loans to help fund clean energy technology like solar panels, batteries, and heat pumps.
Key points
- The new Warm Homes Loan scheme offers interest-free or low-interest loans to help households install clean energy technology without paying upfront costs.
- Ten lenders are currently participating in the scheme, offering repayment terms that can extend up to thirty years in some cases.
- Homeowners can combine these loans with existing government grants, such as the Boiler Upgrade Scheme, to reduce the cost of installing heat pumps.
A government-backed loan scheme has launched to assist households across England, Scotland, Wales, and Northern Ireland with the installation of clean energy systems. By removing the need for upfront payments, the scheme allows families to spread the costs of improvements like heat pumps, solar panels, and batteries over several years.
The initiative aims to make clean energy technology more accessible and help households reduce their energy bills. Interested residents can apply for these loans through ten participating lenders, with further products and providers expected to join the scheme as it continues to develop.
How the loans work
The scheme provides loans with interest rates up to 5 per cent lower than typical high street offerings. Currently, ten lenders are involved, including The Money Co-op, Tandem Bank, and South Manchester Credit Union. Repayment periods vary by provider and can last up to thirty years. Some energy suppliers have also established partnerships with lenders to offer these products directly to their own customers.
Installation and grant support
Most installations must be carried out by MCS-certified professionals to meet technical and safety standards, though an exception exists for heat network connections. Households are encouraged to compare quotes and consider the total amount repayable before signing any agreement. If eligible, homeowners can use these loans alongside other funding, such as the government’s Boiler Upgrade Scheme, to help cover the costs of a heat pump.
What it means for you
- You can apply for loans to cover upfront costs for heat pumps, batteries, or solar panels.
- Compare total borrowing costs, including monthly fees and interest rates, between different lenders before committing.
- Check your eligibility for additional government grants, which can be combined with these loans to lower installation expenses.
Where the reports differ: The government states that Boiler Upgrade Scheme grants are up to £9,000, while The Guardian reports that these grants have typically provided up to £7,500.
Sources
We compared these reports before writing and checked every figure, date and name in this story against them. Read them for the full detail.
- GOV.UK (Department for Energy Security and Net Zero): Warm Homes Loan Scheme: Factsheet (27 Oct)
- The Guardian: Homes across UK to get low- or no-interest loans to fund solar panels and heat pumps (27 Oct)
Spotted a mistake? Email us. This story is based on the reports above and its facts were checked against them; it is not financial advice.
