The Autumn Budget 2026, alongside the launch of the Warm Homes Loan Scheme, brings important developments for the UK's solar PV and battery storage industry.
While there is no new universal solar grant, government-supported finance, renewable energy investment and electricity market reforms could create opportunities across residential, commercial and utility-scale projects.
For installers, the most immediate development is access to low- and zero-interest loans for eligible residential solar PV and battery storage. Meanwhile, official figures recorded nearly 172,000 UK solar installations between January and July 2026.
From the UK Solar Roadmap to the 2026 Budget
The Government's 2025 Solar Roadmap outlined more than 70 actions supporting its ambition of 45–47 GW of installed solar capacity in Great Britain by 2030. Our earlier article, UK Solar Roadmap 2025: Key Government Actions & Solar Targets, explored rooftop deployment, grid connections and financing barriers.
The new loan scheme is a concrete step towards the roadmap's financing ambitions; grid access and project delivery remain challenges.
1. Warm Homes Loan Scheme: New Finance for Solar and Battery Storage
Announced on 27 October 2026, the Warm Homes Loan Scheme provides government-supported finance through participating private lenders. It is a repayable loan, not a grant paid to homeowners.
How Does the Warm Homes Loan Scheme Work?
The Government provides lenders with a non-repayable capital grant of up to 20% of the eligible loan amount to support lower-cost finance. The scheme aims to reduce interest rates by up to five percentage points, and some participating products are interest-free.
Eligible loans have a minimum three-year term; some products extend to 30 years. The grant is paid to lenders, not borrowers, and actual APRs, fees and repayment terms vary. Homeowners should compare total repayment costs, not just monthly instalments.
Loans can be combined with qualifying grants, such as the Boiler Upgrade Scheme or Home Energy Scotland support, provided the same costs are not funded twice. Installations generally require appropriately MCS-certified installers and qualifying products.
What Does This Mean for Solar Installers?
Lower-cost finance could help customers proceed with planned installations or consider integrated solar PV and battery storage systems.
The scheme generally requires MCS-certified installers and qualifying products. For finance applications requiring a separate installation quotation, installers should ensure it includes:
Installer MCS certification number
Customer and installation address
Itemised equipment and installation costs
Proposed system capacity
A quotation dated within the preceding six months
These details are important for applications and can help avoid delays caused by missing documentation.
Some lenders work with approved installation partners, while others allow homeowners to choose their own MCS-certified installer.
Source: Warm Homes Loan Scheme Rules
2. Warm Homes Loans: How to Apply and Participating Lenders
The scheme is available to qualifying owners of UK residential properties, whether mortgaged or owned outright. Applications are subject to credit, affordability and technology eligibility checks.
The process is straightforward: obtain an installation quotation, compare loan products, apply through a participating lender or partner, complete the checks and retain the finance documents, invoice and MCS certificate.
Homeowners apply through participating finance providers, not directly to the Government. Applications may also be arranged through approved installers, retailers or mortgage providers.
Which Finance Companies Are Participating?
The Government currently lists ten lenders:
HomeServe Finance
Hometree Finance
Propensio
Secure Trust Bank
Selina Finance
South Manchester Credit Union
Sunsave Energy
Tandem Bank
The Money Co-op
This Bank
Source: GOV.UK – Official Warm Homes Loan Scheme Lender Directory
For installers, lender arrangements vary. Some providers work with approved installation partners, while others allow customers to choose their own MCS-certified installer. Eligible technologies, interest rates and repayment terms also differ.
3. Battery Storage: Opportunities Beyond Solar Generation
Battery storage helps households and businesses use more of the electricity generated onsite. Depending on the installation and tariff, it can also support time-of-use optimisation, peak demand management, load shifting and backup power where the system provides that capability.
Importantly, the Warm Homes Loan Scheme supports eligible electrical battery storage both alongside solar PV and as a separate improvement.
This gives installers an opportunity to discuss complete system design: hybrid inverter compatibility, usable battery capacity, backup needs, charging performance and future expansion. The Budget does not introduce a dedicated commercial battery subsidy; C&I battery economics still depend on individual project requirements.
4. VAT Changes: What Installers Need to Know Before April 2027
One of the most important developments for residential solar installers is the confirmed return to 5% VAT on qualifying energy-saving material installations.
The current temporary 0% VAT rate on qualifying installed residential solar PV and battery storage is scheduled to end on 31 March 2027.
From 1 April 2027, the reduced VAT rate returns to 5%, as originally scheduled when the temporary relief was introduced.
For installers, this affects:
Customer quotations and installation pricing
Projects scheduled around April 2027
Contracts and payment arrangements spanning the change
Communication with homeowners planning future installations
The applicable VAT treatment depends on the installation and relevant tax-point rules. The reduced rate is not a general 5% VAT rate on standalone equipment sales.
Installers should review affected quotations and contracts carefully and communicate the change to customers.
Source: HMRC – Budget 2026 Tax Measures
5. Grid Reform and Renewable Energy Investment
Grid connection delays and limited network capacity remain significant challenges for larger solar PV and battery storage projects.
The 2026 Budget supports further electricity infrastructure and market reform, alongside investment in renewable energy.
A notable announcement is £2 billion for a new Energy Wealth Fund, within the National Wealth Fund, to support renewable and low-carbon energy infrastructure.
The Budget also confirms further changes to Contracts for Difference (CfDs), which provide eligible renewable energy generators with more predictable income. This can help attract investment and reduce exposure to fluctuating electricity prices, particularly for large-scale solar developments.
Commercial Rooftop Solar and Manufacturing Costs
Warehouses, factories and commercial buildings provide substantial opportunities for onsite solar generation, although grid connections, leasing arrangements and financing can affect project viability.
The Budget confirms that the British Industrial Competitiveness Scheme aims to reduce electricity bills by up to 25% for over 10,000 eligible manufacturing businesses in Great Britain from April 2027.
For C&I solar and battery installers, this is particularly relevant when assessing financial returns. Lower grid electricity costs for qualifying manufacturers may affect estimated savings and payback periods for onsite generation and storage.
The scheme applies to eligible manufacturing activities, not all commercial properties.
Source: British Industrial Competitiveness Scheme
6. Warm Homes Plan: Funding and Retrofit Work
The £15 billion Warm Homes Plan, launched in January 2026, supports improvements including solar PV, batteries, heat pumps and insulation.
The Budget reduces its capital grant funding by £1 billion, although the Government says most support aimed at low-income households and social housing is protected.
It also maintains £400 million for the Boiler Upgrade Scheme in 2027–28. For installers involved in housing association, local authority and retrofit programmes, opportunities depend on individual funding and procurement arrangements.
What Should UK Solar Installers Prepare for in 2027?
The latest announcements highlight several practical priorities:
Residential solar: Understand the Warm Homes Loan Scheme, participating lenders and customer eligibility requirements.
MCS compliance: Ensure certification, quotations and installation documentation meet the applicable scheme requirements.
Battery storage: Develop integrated system proposals based on customer consumption, tariffs and future expansion.
Commercial solar and BESS: Reassess project economics where customers qualify for manufacturing electricity discounts.
Installation pricing: Prepare for the April 2027 VAT change and monitor grid connection developments affecting larger projects.
Final Outlook: Opportunities for the UK Solar Industry
The Autumn Budget 2026 presents a mixed but potentially encouraging outlook for solar PV and battery storage.
Government-supported residential finance and renewable infrastructure investment sit alongside reduced grant funding, changing VAT arrangements and continuing grid constraints.
For residential installers, the most immediate opportunity is the new finance available for qualifying solar and battery systems. For commercial installers, electricity costs, grid access and project economics remain central considerations.
As the UK moves towards its 2030 solar ambitions, success will depend on turning policy developments and customer demand into well-designed, compliant and commercially viable installations.
Official Sources
Solar PV and Battery Storage at Alternergy
Alternergy supplies UK professional installers with solar panels, inverters, residential and commercial battery storage, mounting systems and installation accessories, supported by technical product information.