UK households to get £15bn for solar and green tech to lower energy bills

Households will be eligible for thousands of pounds’ worth of solar panels and other green tech to lower their energy bills, the government has announced.

The long-awaited Warm Homes Plan promises to provide £15bn to households across the UK over the next five years, as well as introducing new rights for renters.

The government has said it wants to create a “rooftop revolution”, tripling the number of homes with solar, and lifting one million people out of fuel poverty.

The plan has been strongly welcomed by the energy and finance industry, but the Conservative Party said the scheme will “saddle households with high ongoing running costs”.

First touted back in 2024, the Warm Homes Plan promised to tackle the “national emergency” of rising energy bills, but it has taken two years for the final detail to be published.

The government announced that the plan, published on Wednesday, will focus on funding solar panels, heat pumps and batteries for households across the UK via low-interest loans and grants.

For able-to-pay households even with the grants there are likely to be additional costs of installing the technologies. For a heat pump after the subsidy households pay on average £5,000.

But for an average three bedroom semi-detached home, installing these three technologies, could save £500 annually on energy bills, it estimates.

Although social charity Nesta, and green energy charity, MCS Foundation, have estimated it could be more than £1000.

“A warm home shouldn’t be a privilege, it should be a basic guarantee for every family in Britain,” said Prime Minister Sir Keir Starmer.

Measures in the plan include:

• Extending the Boiler Upgrade Scheme by a further year to 2029/30, offering £7,500 grants for heat pumps
• Additional £600m for low-income households to receive funding for the full cost of solar panels and batteries taking the total available to £5bn
• Low and zero-interest loans for households irrespective of income

The plan has been strongly welcomed by the energy industry, workers’ unions, and the finance sector, who see the long-term financial commitment by the government as crucial for driving private investment into green technologies.

“£15 billion is a substantial commitment, it provides certainty to investors and businesses in the energy market,” said Dhara Vyas, chief executive of trade body Energy UK.

Camilla Born, CEO of Electrify Britain – a joint campaign group from Octopus and EDF to encourage switching to electric heating – also welcomed the announcement and said it will help cut bills long-term but said “the bad side is that it is a plan, and we need delivery”.

Some of the schemes are already distributing grants, but for new funding the government has yet to decide how or when households will receive the money. It said that “further engagement with the finance sector” is needed this year.

Richard Tice, Reform deputy leader, strongly criticised the plan and said it was: “A scandalous waste of up to £15bn of taxpayers’ cash primarily buying Chinese made solar panels, batteries and heat pumps, that is bad for British industry.”

Two thirds (68%) of the solar panels imported by the UK came from China in 2024, according to HMRC trade data.

The government has said the scheme would contribute to 180,000 new jobs in the clean heating sector – although some of these are likely to be from retraining existing engineers.

The original plan had focused on ramping up installation of insulation in homes which was considered a cost-effective way to reduce heat loss from the UK’s leaky housing stock.

But ongoing controversy with a government-funded insulation scheme, ECO, involving botch installations, has led to the scheme not being extended.

Aadil Qureshi, CEO of Heat Geek, which retrains heating engineers to install heat pumps, said it was the right decision and a refocus on green tech was better value for government money.

Unlike insulation, he said heat pumps are a technology in its infancy, and needed government support to catalyse the industry.

“[The plan] allows the industry to commit, to double down – it allows investors, manufacturers to say let’s keep investing to get to a certain point where it is equal with the hydrocarbon alternative,” he said.

By switching households away from oil heaters and gas boilers to electrical heat pumps, powered by renewable energy, the government hopes it will cut the country’s planet warming emissions, of which around 18% come from home heating.

Dozens of people have got in contact with Your Voice Your BBC News about their experience installing low-carbon technologies like heat pumps.

One retired couple Chris and Penny Harcourt, living in Stowmarket, got a heat pump two years ago and said it was the “best update we have done in our house for 20 years”.

But they said that with current electricity prices it was expensive to run and it was only when they got solar panels did they see the costs fall.

You can watch a conversation BBC Climate Editor Justin Rowlatt had with Penny below.

Heat pumps can be three to four times more efficient than gas boilers, but higher electricity prices mean that they can end up being the same or more expensive to run.

But moving households off gas heating has been a priority for the government.

Energy Secretary, Ed Miliband, has previously said the UK’s dependence on fossil fuels was its “Achilles heel” – after significant fluctuations in prices – and clean power was the only way to lower energy bills.

But the UK has some of the highest electricity bills in Europe due to upgrades to the network, government taxes and the impact of wholesale prices driven by the gas price.

Claire Coutinho, shadow energy secretary said: “Unless the Government gets serious about cutting electricity bills now, many of these taxpayer-funded schemes will saddle households with high ongoing running costs every single year.”

The government hopes that ramping up solar panels will be the answer.

The Warm Homes Plan will encourage households to opt for the trio of low carbon technologies – heat pumps, solar panels and batteries.

This will see more of the electricity demand of heat pumps met by home-generated solar energy rather than from the grid; thus driving down prices.

Miliband told the BBC that the government’s plan is the “the most cost-efficient long-term way to make a difference to people” and bring energy bills down.

“We saw the highest demand for solar panels last year, the highest demand for heat pumps we’ve ever seen, but we don’t want those to just be the preserve of the wealthy,” he said.

Not everyone in the green industry is supportive of all the measures. Dale Vince, CEO of energy company Ecotricity, praised the new funding for solar but criticised the high level of subsidy for heat pumps.

Although he said they had a role to play, he said they weren’t the national answer for lowering heating costs and greenhouse gas emissions.

“Solar panels give us the biggest bang for buck there is no doubt about that – cheapest to install and most productive in terms of bringing down energy bills. Heat pumps sit at the other end of that scale,” Vince said.

“We could put solar panels on 10 million rooftops or heat pumps in one million homes.”

The installation of low carbon tech will only be available to those who are homeowners or in social housing, but the Warm Homes Plan also includes recent announcements to changes in renters’ rights.

From 2030, landlords will need to make sure rental properties have a minimum energy efficiency score of EPC C – up from E.

But currently the way that a home is awarded an EPC score is based on estimated running costs rather than energy efficiency, which can mean the score is downgraded following a heat pump installation.

In the plan, the government has said it intends to announce changes to the assessment process later this year.

The industry was also hoping that the Warm Homes Plan would set out updated efficiency requirements for new builds – the Future Homes Standard – but it said these would be published in the next few months.

There had been concern amongst environmentalists that the requirement for solar panels on new homes was to be dropped.

But the plan said: “We have confirmed that under these standards, new homes will have low-carbon heating, high levels of energy efficiency and solar panels by default.”

Jess Ralston, Energy Analyst at the Energy and Climate Intelligence Unit (ECIU), said that these decisions have been a long time coming.

“That timelines are being pushed back is likely to be frustrating for those who are still colder and poorer in shoddy rental homes, but the public overwhelmingly back better standards for new builds so should be encouraged to see new requirements on the house builders at long last,” she said.

Additional reporting Miho Tanaka