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BenefitsWe’ll address the recurring query, “Are solar panels in the UK in 2022 still worthwhile?” in this article. Because of the viability of the ECO4, the answer is a resounding yes this year (Energy Company Obligation Scheme).
The UK government has allotted £4 billion through ECO4 for the installation of heat pumps and solar panels. The government is also allowing local councils to choose the eligibility requirements in accordance with the demands and unique conditions of the local populace.
Previously, many people who needed funds didn’t fit the strict requirements, therefore this is a significant victory. What’s interesting about ECO4 is that eligibility can be expanded to take into account factors like resident age and health, number of occupants, house condition, household income, persons receiving assistance, etc.
Therefore, there is a significantly higher likelihood of actually receiving a solar panel grant between 2022 and 2026. This is supported by the fact that in March 2022, in the thick of the energy price crisis, Chancellor Rishi Sunak declared that the VAT on solar panels would be reduced to 0% for a 5-year term!
Recent developments: There will be no VAT on solar panels until 2027!Energy prices in April 2022 caused inflation in Europe to reach levels not seen in more than 40 years! Energy prices account for more than 40% of this inflationary rise.
The UK government announced a reduction of the current 5 percent VAT refund on energy-saving measures (such as solar panels, heat pumps) to 0 percent in order to assist homeowners in lowering energy costs and improving energy efficiency. Therefore, a typical household that installs rooftop solar panels will save £300 annually in energy bills in addition to over £1,000 in total installation costs.
The VAT-free period will finish in March 2027, and the rate will then go back to 5 percent. Compare solar panel costs to find the best deals if you want to get a head start before it’s too late.
The UK government has long prioritized promoting the use of renewable energy sources. All EU member nations were required to meet a 32 percent renewable energy target by the year 2030 under the EU’s Renewable Energy Directive. As the focus is on moving in this direction by implementing additional programs and incentives in the renewable energy sector, the UK has been working toward that goal.
New purchasers do not need to fear because this tendency was accompanied by a fall in the price of solar panels. There are ways to finance solar panels in the UK even though there aren’t any grants in the conventional sense. The only program currently accepting new applications is the Smart Export Guarantee (SEG).
In general, this article will cover the following four important UK solar panel incentives:
| the UK’s solar grants | Run Time | Savings Potential |
|---|---|---|
| Green Energy Incentive (RHI) |
Terminates on March 31, 2022! |
Up to £2,981 |
| Energy Company Obligation | April 1st, 2022–2026: Energy Company Obligation | with a Potential for FREE Solar Panels |
| Smart Export Guarantee | January 1st, 2020: Smart Export Guarantee (unknown) | 2 – 5.6 pence per kWh |
| Feed-in Tariff |
2010 – 2019 (Those who registered will keep receiving benefits) |
kWh generation rates range from 6.38 to 13.88p. Export Tariff – 4.77p per unit |
Only solar water heating is covered by RHI.
Before we get into the specifics of each award, it’s vital to note that selecting the proper solar panels is the key to maximizing savings through UK government financing for solar panels. Grants shouldn’t be applied to subpar panels or panels that are the wrong match for your house.
For best effectiveness, the appropriate panels are created specifically for your home’s energy-saving requirements and characteristics. Customized panels can reduce annual UK energy costs by 70%!
Compare up to 4 locally available, custom solar panels to maximize grant savings. Simply choose your region.
You can save up to £2,981 on solar thermal panels by using the Domestic RHI. Solar thermal, in contrast to solar PV, doesn’t produce electricity but has two key benefits. They heat your water using solar energy, which may then be provided to your faucets and showers as well as used as a wet central heating system.
Given that home RHI payments often cover the majority of the installation expenses, which average roughly £4,000 for solar thermal panels, you will get them over the course of seven years. As soon as you own your energy and are not subject to price changes, your panels will soon begin to pay for themselves. Because solar thermal panels are about 80% efficient, your roof will require much fewer of them.
Prior to submitting a RHI application, the property must first get an Energy Performance Certificate (EPC) evaluating its current energy efficiency and areas for improvement.
The optimum time to apply for the residential RHI on custom solar panels is right now since starting on April 1, 2022, combined gas and electricity costs are expected to increase by more than 50%, reaching an average of just under £2,000 per year. More recently, analysts have forecasted that the conflict in Ukraine will cause a further 50% increase when the ceiling is reset in October, putting households on course to spend £3,000 annually. Recent sources indicate that expenses could increase to £4,000 year.
Beginning on April 1, 2022, ECO4 (Energy Company Obligation) will take the place of ECO3 and last until 2026. The government has allotted 4 billion pounds, or $1 billion over 4 years, to boost UK households’ energy efficiency and lower carbon emissions. The difference between ECO4 and ECO3 is that more people will be given the opportunity to qualify thanks to LA Fflex, or flexible eligibility.
LA Flex offers councils the freedom to choose the eligibility requirements for their region; these requirements are no longer restricted to benefit eligibility or even to income levels; instead, they can be customized to the local population’s needs (for e.g., age, number of occupants, number of children, condition of the house, etc.). As a result, more UK residents will be eligible for incentives for solar panels.
The scheme’s specifics have not yet been worked out, but based on the prior run, the prospective returns look promising. When installing new boilers together with additional energy-saving measures like cavity wall, underfloor, or loft room insulation, many suppliers might normally cover all upgrades through ECO3. The government increases the potential for energy savings in your home, significantly reducing your CO2 emissions by coupling full support to another measure.
Again, securing an energy-efficient and custom panel that is matched to your home’s demands is the first step before asking for grants. Since you don’t want to apply grants to panels that are subpar or inappropriate for your home, doing this will guarantee that you are saving from the very beginning.
As of 1 January 2020, the Smart Export Guarantee (SEG) is the sole kind of solar panel financing available in the UK.
Small-scale low-carbon electricity generators can get paid for the extra energy they export back to the grid thanks to the SEG.
All licensed providers are now required to provide their clients with an export tariff, even though this is not a direct government grant. Suppliers with more than 150,000 clients must offer a tariff; those with fewer clients may participate voluntarily.
Under the SEG, all households with standard solar panel installations (up to 5MW capacity) are eligible. To measure the exports, a smart meter must also be installed in the home. For energy exported from solar battery storage systems, the majority of electricity providers also provide a tariff.
Solar panels are an excellent example of a green home improvement project thanks to this incentive.
From April 2022 through March 2027, households can now take advantage of zero VAT on the materials and installation of energy-efficient measures. The average family with rooftop solar panels will save more than £1,000 on installation and £300 yearly on their energy costs thanks to the elimination of the VAT on renewables, which was just 5 percent and already rather cheap.
The VAT-free period expires after five years, and the rate then goes back to 5 percent. Thus, the elimination of the VAT in addition to the grants for solar panels puts householders one step closer to obtaining renewable energy sources than ever before.
The permanent removal of the precise eligibility requirements that previously applied to the 5 percent lower rate is also welcomed by the new zero VAT regulations. The complete information is available on the government website.
Initiated in 2010, the Feed-in Tariff operated well for several years. Those who are now registered will continue to get benefits from the FIT scheme even though it stopped accepting new applications in 2019.
For each unit (kilowatt per hour) of power they create and for any excess energy they sell back to the grid, participants in this program receive a specified amount of money.
The precise sum received varies according to the system’s size, kind of technology, and date of installation. With the payments lasting a total of 20 years from the date of registration, the initial investment’s payback period is cut in half.
After selecting a licensed installer, you had the option of choosing to either receive payments from your energy provider or from a list of registered suppliers. There are two categories of payments:
In the past, you could get solar panels for free from companies that would rent your roof space for up to 25 years if you couldn’t afford to buy them. With this plan, a business would offer to give away solar panels and handle installation and maintenance at no cost in exchange for Feed-in Tariff (FIT) payments.
As an alternative, a program known as “solar buyback” has emerged. Under this program, businesses offer homeowners a large sum up front in exchange for collecting the FIT payments the homeowners would have otherwise received. To decide if this repurchase program would be worthwhile, you must weigh an offer like this against the overall FIT payments you would receive.
Yes, it is the answer. If you are a homeowner who satisfies the requirements, you may be able to recover most of the expenses associated with installing solar through RHI and all of the costs associated with other energy-saving measures, such as insulation, through ECO4.
Keep up to date with grants in order to maximize your savings — GreenMatch routinely evaluates solar panel financing, and our content is updated to reflect the most recent legislative changes.
Additionally, it’s crucial to make sure you submit grant applications to the appropriate panels. Obtaining funding for a panel that is subpar or inappropriate for your house serves no purpose. The ideal panel is created specifically to meet the needs of your home, and we make it simple for you to reach an informed decision by comparing up to 4 locally built options.
On the government’s website, you can discover more details about the various energy incentives, including all the information you need about grants for solar-related equipment as well as grants for other renewables like heat pumps and boilers.
If you decide to invest in solar energy or other clean energy sources after gathering the data, you can return to Greensavings Network to get free, non-binding quotations for solar panels, heat pumps, and boilers.