Homes across UK to get low- or no-interest loans to fund solar panels and heat pumps

Government-backed Warm Home Loans scheme to help households cut energy bills by hundreds of pounds

Households across the UK can now cut their energy bills by hundreds of pounds a year at no upfront cost by applying for interest-free or “low-interest” loans to fund upgrades such as heat pumps, batteries and solar panels.

The government-backed Warm Home Loans scheme, which launched on Tuesday, could mean thousands more households are able to access low-carbon energy alternative technologies, thanks to loans ranging from £7,500 to up £35,000.

Energy suppliers including British Gas and E.On have partnered with lenders from Tandem Bank and Homeserve respectively to offer the loans directly to customers at a discounted rate compared with those offered by high street lenders.

People interested in swapping their gas boiler for an air-source or ground-source heat pump could secure loans of up to £10,000 or £35,000 respectively, while also drawing on the government’s existing scheme which offers grants of up to £9,000 a year for households installing the replacements for fossil fuel heating.

Installing a heat pump, battery and solar panels could save households up to £550 a year on their energy bills, rising by a further £300 a year with a time-of-use tariff, according to the government.

Soaring energy costs have led to record demand for low-carbon home energy upgrades over the last year, and the government believes the loan scheme means “thousands more households” will be able to cut their energy bills by fitting clean energy technology and spreading repayments over many years.