Free or cheap loans for solar panels among key measures in Government's 'Warm Homes Plan' – Martin Lewis says it could cut bills if 'done right'
Households across the UK could in future get interest-free (or low interest) loans to install solar panels, batteries and heat pumps, as part of the Government's long-term 'Warm Homes Plan' to boost energy efficiency. MoneySavingExpert.com founder Martin Lewis has welcomed the proposals, but warned the scheme must be "done right" in order to cut bills.
The Government has announced it will be putting £15 billion of public investment into a range of measures to upgrade five million homes and help lift up to one million families out of fuel poverty, by enabling them to reduce their energy bills for the long-term. There will be three distinct areas of the scheme:
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For all households across the UK: Interest-free or low-interest loans for green initiatives.
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For low-income households in England: Free energy efficiency measures.
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For renters in England and Wales: New minimum energy efficiency standards.
Martin Lewis: 'A good route to reducing energy bills – if it's done right'
Improving housing stock through energy efficiency, done right, is a good long-term way to cut energy bills. Yet it's staggering how many times governments have badly cocked up 'available to everyone' schemes over the past decade or so – from the 'Green Deal' to the 'Green Homes Grant'. They were overly complex, poorly designed, and as user-friendly as a self-assembly wardrobe with no instructions.
Simple interest-free loans (or very low interest) are an easier concept. It means those who don't have lump sums, but can make savings from these measures, can get on with it.
And while people looking at fitting batteries, solar panels and other home-efficiency measures today will be disappointed that nowt practical will likely happen until 2027, at least it means there's time for them to consult – and hopefully get it right. We'll be looking to feed in to try and help them avoid past problems.
Free or cheap loans for solar panels, batteries and other 'green' tech to be introduced across the UK
The Government says it'll work with banks and lenders across the UK to enable all households to access interest-free or low-interest loans to fund energy efficiency home improvements, such as solar panels, batteries and heat pumps.
The loans, which will be backed by the Government, will cover the upfront costs of these green technologies, and you'll be able to use them alongside the existing Boiler Upgrade Scheme grant. This allows homeowners in England and Wales to get £7,500 towards the cost of replacing a fossil fuel boiler with a heat pump.
You'll be able to apply to your bank in the same way as you would any other loan. The Government has said there will be a maximum amount a household can borrow, but it will be set high enough to allow you to fund multiple measures.
More details about how the scheme will work, including eligibility, will be announced later this year, and this may be subject to consultation – so the loans themselves are unlikely to launch before 2027. We'll cover any developments here and in our weekly email.
Low-income households in England to get free energy efficiency improvements
The Government says it will continue to fund the existing Warm Homes: Local Grant. This allows some households in England earning under £36,000 a year (or on certain benefits) to get up to £30,000 worth of energy efficiency measures for free, including insulation, solar panels and heat pumps.
The separate 'Warm Homes: Social Housing Fund', which offers grants to housing associations and local authorities, will also be boosted. Over time, the two schemes will be combined – more detail on this will be published in the spring, the Government says.
Low-income households in Wales, Scotland and Northern Ireland can apply to their own schemes, such as the Nest Warm Homes Wales programme, Warmer Homes Scotland, Northern Ireland Affordable Warmth Scheme and Northern Ireland Sustainable Energy Programme.
Rental properties in England and Wales will have to meet new energy efficiency standards
By 2030, privately-rented properties in England and Wales will have to achieve an energy performance certificate (EPC) rating of at least C – up from the current minimum requirement of E.
The Government says its proposals include "reasonable exemptions" for landlords, who will also be able to access "a range of financing options" to ensure homes can be upgraded in time.
As part of the Warm Homes Plan, the Government has said it also intends to announce changes to the way homes are assessed for energy performance, to ensure ratings more accurately reflect how homes are used.
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