Current Government Support for Solar
The UK government continues to support renewable energy adoption through various incentives and schemes designed to make solar installations more affordable and attractive for homeowners and businesses. While some previous schemes have ended, new initiatives have emerged to maintain momentum in the renewable energy sector.
Understanding these incentives is crucial for maximising the financial benefits of your solar installation and ensuring you take advantage of all available support.
Smart Export Guarantee (SEG)
The Smart Export Guarantee is the current primary government scheme supporting small-scale renewable energy generation in the UK.
How SEG Works
- Energy suppliers with 150,000+ customers must offer SEG tariffs
- You receive payments for excess electricity exported to the grid
- Rates vary between suppliers and tariff types
- Smart meters are required to track exports accurately
SEG Rates and Payments
Current SEG rates range from 1p to 15p per kWh exported, depending on the supplier and tariff type:
- Fixed rate tariffs: 3-7p per kWh
- Variable rate tariffs: 1-15p per kWh
- Time-of-use tariffs: Higher rates during peak demand
Eligibility Requirements
- Installation capacity up to 5MW
- MCS or equivalent certification required
- Smart meter or compatible export meter installed
- System commissioned after 1 January 2020
VAT Reduction on Solar Installations
Since April 2022, the government has reduced VAT on solar panel installations, making them more affordable for homeowners.
VAT Rates
- Residential installations: 0% VAT (until March 2027)
- Commercial installations: 20% VAT (standard rate)
- Energy storage systems: 0% VAT when installed with solar panels
Qualifying Criteria
- Installation must be on residential property
- Includes solar panels, inverters, and battery storage
- Professional installation required
- Applies to both new builds and retrofits
This 0% VAT rate can save homeowners £1,000-£2,000 on a typical solar installation, significantly improving the return on investment.
Local Authority Grants and Schemes
Many local authorities offer additional grants and support schemes for renewable energy installations.
Types of Local Support
- Direct grants: Financial assistance for installation costs
- Low-interest loans: Affordable financing options
- Group buying schemes: Reduced costs through collective purchasing
- Planning support: Streamlined approval processes
Examples of Local Schemes
- Warmer Homes LAD3: Grants for energy efficiency improvements
- ECO4 Scheme: Support for low-income households
- Home Upgrade Grant: Off-gas grid properties
- Local area energy plans: Community-wide renewable energy initiatives
Contact your local authority to learn about specific schemes available in your area, as these can vary significantly by location.
Commercial and Business Incentives
Businesses can access additional incentives beyond those available to residential customers.
Enhanced Capital Allowances (ECAs)
- 100% first-year capital allowances for qualifying solar equipment
- Immediate tax relief on the full cost of installation
- Applies to equipment on the Energy Technology List
- Significant corporation tax savings available
Business Energy Efficiency Schemes
- Green Business Fund: Grants and loans for energy efficiency
- Industrial Energy Transformation Fund: Support for large energy users
- Net Zero Innovation Portfolio: Funding for innovative technologies
Carbon Reporting Benefits
- Reduced scope 2 emissions reporting
- Enhanced ESG credentials
- Qualification for green financing options
- Competitive advantages in tenders
Green Finance Options
The financial sector offers various green financing options specifically for renewable energy installations.
Green Mortgages
- Preferential rates for energy-efficient properties
- Additional borrowing capacity for renewable energy improvements
- Cashback incentives for green home improvements
Personal Green Loans
- Dedicated loans for renewable energy installations
- Competitive interest rates
- Flexible repayment terms
- No early repayment penalties
Solar-Specific Financing
- Buy-now-pay-later schemes
- Rent-a-roof arrangements
- Power purchase agreements (PPAs)
- Solar lease options
Future Developments
The government continues to develop new policies and incentives to support renewable energy adoption.
Upcoming Initiatives
- British Energy Security Strategy: Expanding renewable energy capacity
- Net Zero Strategy: Pathway to carbon neutrality by 2050
- Energy Bill Relief Scheme: Support for energy costs
- Green Heat Networks Fund: District heating solutions
Proposed Changes
- Enhanced SEG rates and terms
- Streamlined planning processes
- Additional support for energy storage
- Community energy scheme expansion
Maximising Your Benefits
To get the most from available incentives:
Before Installation
- Research all applicable schemes in your area
- Compare SEG tariffs from different suppliers
- Consider timing for maximum VAT savings
- Evaluate energy storage options
During Installation
- Ensure MCS certification requirements are met
- Install compatible smart metering
- Document all eligible costs for tax purposes
- Register for relevant schemes promptly
After Installation
- Apply for SEG payments
- Monitor export generation regularly
- Review tariffs annually for better rates
- Maintain system performance for optimal benefits
Getting Expert Advice
Navigating the various incentives and schemes can be complex. Professional guidance ensures you don't miss out on available benefits.
At RigheKnave Solar, we help customers access all applicable incentives and schemes. Our team stays current with policy changes and can guide you through:
- Scheme eligibility assessments
- Application processes and documentation
- Optimal system sizing for maximum benefits
- SEG supplier comparisons and registration
- Ongoing scheme management and optimisation