The Warm Homes Loan Scheme is a government scheme run by the Department for Energy Security and Net Zero (DESNZ). It is a loan, not a grant. The government pays approved lenders so they can lower the interest rate on loans for home energy upgrades, including solar panels (up to £15,000) and battery storage (up to £15,000). The first ten lenders started offering the loans at the end of October 2026.
You must own the home, it must be in the UK, and you apply to a lender, not to the government. The lender runs its normal credit and affordability checks. The work must be done by an MCS certified installer.
Spectrum Energy Systems is an MCS certified installer (NIC200223). We are not a lender or a credit broker, and we do not arrange loans.
What the Warm Homes Loan Scheme is
The scheme is part of the government's Warm Homes Plan, and DESNZ sets its rules. The loan itself comes from a bank or another lender. The government pays that lender a grant, and the lender passes it on to you as a lower interest rate. On loans of three years or more, the scheme is designed to cut the rate by up to 5 percentage points (scheme rules, September 2026, section 6.7).
DESNZ published a factsheet on 27th October 2026 saying ten lenders are initially offering the loans, with more lenders and products expected to join (DESNZ factsheet). GOV.UK published its guidance for homeowners, with the list of lenders, the next day. It is still borrowing: you pay back what you borrow, usually with some interest.
Who can apply
GOV.UK sets out three conditions (GOV.UK eligibility):
- You own the propertyWith or without a mortgage. The scheme rules allow people who live in the home they own, and private landlords.
- The property is in the UKThe loans are available in England, Scotland, Wales and Northern Ireland.
- It is a home, not a commercial buildingRunning a small business from home does not rule a home out.
There is no income limit. The lender still carries out its normal credit and affordability checks, and each lender can add rules of its own, such as asking to see your Energy Performance Certificate (scheme rules, sections 4.4 and 4.5).
If you are on a low income, GOV.UK says you might get free energy saving improvements through the Warm Homes: Local Grant or other grants instead. In England, the Warm Homes: Local Grant is run by councils for homes rated EPC D to G, and household income must usually be £36,000 a year or less. Our East Midlands solar grants guide shows what councils near us have open, and our guide to UK solar panel grants covers the national schemes.
What a Warm Homes loan can pay for
These are the most the scheme supports for each improvement (scheme rules, section 4.19). Lenders decide which improvements their own products cover.
| Improvement | Most the scheme supports | What counts |
|---|---|---|
| Solar panels | £15,000 | New panels on the roof, or panels added to an existing system |
| Battery storage | £15,000 | A battery on its own, or a battery fitted with solar panels |
| Air-to-water (air source) heat pump | £20,000 | Before any Boiler Upgrade Scheme grant is taken off |
| Ground source heat pump | £35,000 | Before any Boiler Upgrade Scheme grant is taken off |
The scheme also covers heat network connections, small wind turbines, micro hydro systems and, for rural homes, biomass boilers. You can use a loan for more than one improvement.
For solar, the rules expect the quote to include the work needed to fit and connect the system, such as scaffolding and the grid connection. An electric vehicle charger can be included only as part of a solar or battery installation, and the charger and its installer must be approved by the Office for Zero Emission Vehicles. The scheme does not pay for roof repairs, a new roof or insulation, although a lender may offer a separate loan for those (scheme rules, sections 4.13 to 4.20).
Interest: not every loan is interest free
The government says some of the lenders taking part offer interest-free loans, and that some loans can be repaid over as long as thirty years. Other loans charge interest, reduced through the scheme (DESNZ factsheet). A longer loan usually means smaller monthly payments but more paid back in total.
The DESNZ factsheet advises looking carefully at the total amount you would repay, how long you would be paying, and any monthly fees. Every lender in the scheme has to be authorised by the Financial Conduct Authority, and you can check a lender on the Financial Conduct Authority register.
Some loans under the scheme are secured on your home, as a first or second charge mortgage (scheme rules, section 3.8). Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.
We cannot tell you whether to borrow, or which loan to choose. If you want advice on that, speak to an independent financial adviser.
How to apply for a Warm Homes loan
You apply to a lender that offers Warm Homes loans. You do not apply to the government. GOV.UK says you can apply directly to a lender, through an installer or retailer that arranges finance as part of the sale, or through your mortgage provider. The loan product will say if the government funds it through the scheme (GOV.UK how to apply).
GOV.UK keeps the list of lenders taking part on its page Lenders offering Warm Homes loans. Questions about a lender's products, rates, terms and eligibility go to the lender.
Some lenders only work with installers they have partnered with, while others let you choose any MCS certified installer (DESNZ factsheet). If you already have an installer in mind, check this with the lender first.
If you go to a lender yourself, the scheme rules say it will ask for a quote from an MCS certified installer. The quote must be dated within the last six months, be addressed to you on the installer's headed paper, show the installer's MCS number and the full installation address, give an itemised breakdown of the costs, and show the system size in kW (scheme rules, sections 5.21 and 5.22).
The steps DESNZ sets out in its factsheet are:
- working out which upgrades would suit your home
- checking whether you could get a grant, particularly if you are on a lower income
- comparing installation quotes, and comparing loans on the total amount you would repay
- applying to a lender in the scheme, directly or through an installer that offers one, and the lender carrying out its credit, affordability and eligibility checks
- if a loan goes ahead, keeping the quote, finance agreement, invoice, proof of purchase and MCS certificate
After the work is done, your installation might be picked at random for an audit, either by an auditor working for DESNZ or as a quality check by MCS. Being picked does not mean anything is wrong. If a DESNZ auditor needs to visit, GOV.UK says you will get at least 48 hours' notice (GOV.UK audits).
MCS certified installers, and what Spectrum does
For solar panels and batteries, the scheme rules say an MCS certified product must be fitted by an MCS certified installer, to the MCS standard for that technology, and lenders must check this (scheme rules, sections 2.6 and 2.7). GOV.UK adds that you cannot do the work yourself. Our guide to MCS certification explains what the certificate covers.
Spectrum Energy Systems is MCS certified for solar PV and battery storage, number NIC200223, and you can check us on the MCS installer register. We are also a member of the Renewable Energy Consumer Code (00080159).
Here is where we stand on the loan itself. We are not a lender or a credit broker, and we are not authorised by the Financial Conduct Authority. We do not arrange, recommend or introduce loans, we do not fill in loan applications, we do not pass your details to lenders, and no lender pays us anything. What we do is the installation: the survey, the design, a written quote, the install, and the MCS certificate and handover paperwork that you keep afterwards.
How a Warm Homes loan fits with 0% VAT
Solar panels and batteries installed in a home carry 0% VAT until 31st March 2027 (HMRC VAT Notice 708/6). That includes a battery added to panels you already have, and a battery on its own. The rate depends on the installation, not on how you pay for it, so it applies in the same way whether you pay from savings or with a loan.
HMRC's VAT timing rules, the tax point rules explained in VAT Notice 700, decide which side of 31st March 2027 an installation falls. A quote, a design or a loan approval does not fix the rate on its own, so if your installation is due close to that date, ask us how the timing affects your price. Our guide to 0% VAT on solar panels has the detail.
Using it with other schemes
GOV.UK says you cannot use a Warm Homes loan and other government funding to pay for the same improvement (GOV.UK). So if the Warm Homes: Local Grant is paying for your solar panels, a Warm Homes loan cannot pay for them as well.
The exceptions are the Boiler Upgrade Scheme, which pays towards heat pumps and, for rural homes, biomass boilers, and the Home Energy Scotland grant for heat pumps. The Boiler Upgrade Scheme pays £7,500 towards an air source or ground source heat pump in England and Wales, with an extra £1,500 until March 2027 for homes heated by oil or LPG with no mains gas connection, and a Warm Homes loan can cover the rest of the cost (scheme rules, sections 4.11, 4.13 and 5.19). The Boiler Upgrade Scheme does not pay for solar panels or batteries.
A Warm Homes loan is one way to pay for solar. Our article on other ways to pay for solar panels compares paying from savings with other kinds of borrowing.
Thinking about solar panels or a battery?
Every installation we do starts with a design and a written price. Put your postcode in below to see whether we cover your area. This checker is for our installation service only. It is not a loan application, and we do not pass your details to any lender.
Warm Homes Loan Scheme: common questions
Is the Warm Homes Loan Scheme a grant?
No. It is a loan that you pay back. The government pays approved lenders a grant so they can charge you a lower interest rate than they normally would. If you are on a low income, the Warm Homes: Local Grant may pay for improvements instead, and that is a grant.
Who can get a Warm Homes loan?
You must own the property, with or without a mortgage. It must be in the UK and it must be a home, not a commercial building. The scheme is open to people who live in the home they own and to private landlords. There is no income limit, but the lender carries out its normal credit and affordability checks and can add rules of its own.
How much can a Warm Homes loan cover for solar panels and a battery?
The scheme supports up to £15,000 for solar panels and up to £15,000 for battery storage. You can use a loan for more than one improvement. Each lender sets its own products and limits within the scheme.
Are Warm Homes loans interest free?
Not all of them. The government says some of the lenders taking part offer interest-free loans. Others charge interest, cut by up to 5 percentage points from their normal rate. Compare the total amount you would repay, the length of the loan and any fees.
Do I apply to the government or to my installer?
To a lender. You do not apply to the government. GOV.UK lists the lenders taking part, and you can go to a lender directly. Some installers arrange finance as part of a sale. Spectrum does not: we are not a lender or a credit broker, and we do not arrange loans.
Does my installer need to be MCS certified?
For solar panels and batteries, yes. The scheme rules say an MCS certified product must be fitted by an MCS certified installer, and lenders check this. Spectrum Energy Systems is MCS certified for solar PV and battery storage (NIC200223).
Can a Warm Homes loan pay for a battery on its own?
Yes. The scheme covers a battery on its own as well as a battery fitted with solar panels, so adding a battery to panels you already have counts.
Does the 0% VAT rate still apply if I use a loan?
Yes. The VAT rate depends on the installation, not on how you pay for it. Solar panels and batteries installed in your home carry 0% VAT until 31st March 2027. HMRC's VAT timing rules decide which side of that date an installation falls, so if yours is due close to it, ask your installer how the timing affects the price.
Can I use a Warm Homes loan with the Warm Homes: Local Grant?
Not for the same improvement. GOV.UK says you cannot use a Warm Homes loan and other government funding to pay for the same thing. The exceptions are the Boiler Upgrade Scheme and the Home Energy Scotland grant for heat pumps, where a loan can cover the cost above the grant.
Can I get a Warm Homes loan for a business property?
No. The property must be residential. Running a small business from your home does not stop a home from qualifying, but a commercial building does not qualify.
Where these facts come from
We checked every fact on this page against these official sources on 3rd November 2026. Schemes change, so check GOV.UK before you rely on anything here.
- Warm Homes Loan Scheme, GOV.UK guide, published 28th October 2026
- Warm Homes Loan Scheme: factsheet, Department for Energy Security and Net Zero, 27th October 2026
- Warm Homes Loan Scheme: scheme rules, Department for Energy Security and Net Zero, updated September 2026
- VAT Notice 708/6: energy-saving materials and heating equipment and VAT Notice 700: the VAT guide (tax point rules, section 30), HMRC
- Boiler Upgrade Scheme: what you can get, GOV.UK
- Apply for the Warm Homes: Local Grant, GOV.UK
Spectrum Energy Systems Ltd, Bulwell, Nottingham. MCS certified installer NIC200223. Renewable Energy Consumer Code member 00080159. This page is general information about a government scheme, written by an installer. It is not financial advice, and it is not an offer of credit or an invitation to take out a loan. Spectrum Energy Systems is not authorised by the Financial Conduct Authority and does not arrange or introduce loans.
