Green Homes Grants for Solar Thermal

Under the government’s Green Homes Grants scheme, between September 2020 and March 2021 you can apply for a grant to cover two-thirds of the cost of installing solar thermal panels.

Many UK homeowners want to reduce their heating bills and carbon footprint by installing solar thermal panels, but most do not have the money available to cover the upfront costs. To address this, the government is introducing the Green Homes Grants scheme which will give UK homeowners up to £5,000 (£10,000 for the lowest income households) towards the cost of installing a solar thermal heating system.

The scheme has not yet been fully confirmed, but here is what we know about Green Homes Grants for solar thermal panels.

NOTE: This page was published 12th August 2020. We will update this page when more information is available.

What are Green Homes Grants?

The UK, like many other countries, is trying to reduce our carbon emission, minimise our negative impact on the planet and fight climate change. Specifically, we have a target of reaching net-zero carbon emissions by 2050. In 2020 the government announced a £3 billion investment into a carbon reduction strategy and, as 20% of our carbon emissions come from our fossil fueled heating, improving the energy efficiency of our properties is a top priority.

The UK is well known for having poorly insulated properties, particularly when compared to the rest of Europe. A poorly insulated property is harder to heat which means our gas, oil and electric heating systems are being used at high temperatures and for longer periods of time to compensate.

It is clear that we need to make our homes more efficient by improving insulation levels and embracing renewable heating technologies, but most UK households do not have the cash needed to make the necessary changes. That is why £2 billion of funding will be available between September 2020 and March 2021 to help over 600,000 households to improve their energy efficiency. The funding will be distributed as Green Homes Grants, i.e. vouchers to cover two-thirds of the cost of eligible home improvements.

How will the Green Homes Grants scheme work?

Homeowners and landlords can apply for a primary grant to cover two-thirds of the cost (up to £5,000) of installing insulation or a renewable heating system, including solar thermal panels.

Primary Green Homes Grants

  • Insulation: Solid wall, cavity wall, under-floor, loft, flat roof, room in roof, park home.
  • Low carbon heat: Air source heat pump, ground source heat pump, solar thermal
  • If you apply for a grant for insulation or renewable heating, you can also apply for a secondary grant for the below improvements. The secondary grant can not exceed the value of the primary grant.

    Secondary Green Homes Grants

  • Windows and doors: Double/triple glazing (where replacing single glazing), secondary glazing (in addition to single glazing), upgrading to energy efficient doors (where replacing doors installed prior to 2002).
  • Draught proofing.
  • Heating controls and insulation: appliance thermostats, hot water tank thermostats, hot water tank insulation, smart heating controls, zone controls, delayed start thermostat, thermostatic radiator valves.
  • For low income households, grants of up to £10,000 will be available.

    Benefits of Installing Solar Thermal Panels

    Reduced Heating Bills

    A solar thermal heating system is capable of producing between 40-70% of the annual hot water used by a family of 4. This means you can heat your water with free solar energy rather than your boiler or immersion heater, reducing your fuel costs significantly. You will still need to use your main heating system in winter, but the solar thermal panels will reduce take on some of the work so it does not have to work as hard.

    Earn Money with RHI Scheme

    Solar thermal systems are eligible for the government’s Renewable Heat Incentive (RHI) scheme. See below for more information.

    Lower Carbon Footprint

    Reducing how often you need to use your traditional heating will not only reduce your heating bills, but also cut your home’s carbon emissions as you’ll be burning less fossil fuels, so you can do your bit to help the environment.

    Almost No Running Costs

    Once the solar thermal panels are installed and working, there are almost no running costs to budget for. You will need a professional to check over the system every few years but other than that it will run on free energy.

    Low Maintenance

    Solar thermal systems only require professional servicing every 3-5 years and are usually covered by a manufacturer warranty of 5-10 years. In addition, the solar thermal system will reduce the strain on your boiler which should extend its life and make breakdowns less likely.


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    Things to consider when installing solar thermal

    Not a complete heating system

    A solar thermal system is unlikely to be able to provide all the hot water for your home, so you will still need a boiler or immersion heater to boost the supply on cloudy days and through the winter. A solar thermal system will also not power electric showers or cold-fill washing machines/dishwashers.

    Not all homes are suitable for solar thermal panels

    Solar thermal panels usually need to be installed on a roof facing due south at a 20-50 degree angle from horizontal to work at maximum efficiency, although they can work effectively when positioned between south east and south west.

    You will also need to install a solar compatible water cylinder which is large enough to hold around 2 days of hot water.

    Not compatible with all types of boilers

    Solar thermal systems are often not compatible with combi boilers as they are fed water directly from the mains and heat water on demand; you will need to check with the manufacturer if your combi boiler will accept water which has been pre-heated by solar thermal. If you have a regular heating system which is gravity fed (i.e. gets its cold water supply from a tank in the attic) you will need an extra valve or pump so the system can work effectively in winter when the heating is running at the same time.

    NOTE: Only solar thermal systems which have been installed by a Microgeneration Certification Scheme (MCS) certified installer will be eligible for a Green Homes Grant.

    Alternative renewable heating systems

    If solar thermal panels are not a suitable choice for your home but you are interested in installing renewable heating with a Green Homes Grant, visit Boiler Guide for free quotes and information on air source and ground source heat pumps.

    How much does a solar thermal system cost?

    The cost of installing solar thermal panels will vary depending on several factors including the complexity of the installation, any extra work required such as new hot water cylinders or pipework, the manufacturer of the solar thermal panels and the installer’s labour costs. The table below gives some approximate costs of installing solar thermal, as well as how the Green Homes Grant could reduce the cost.

    Size of System People in Household Average Cost of Installation Value of Green Homes Grant (covering two-thirds of the cost up to £5,000) Potential Remaining Cost for Homeowner to Cover
    2m2 2 £2,500 – £3,000 £1,666-£2,000 £834-£1,000
    3m2 3 £3,500 – £4,000 £2,333-£2,666 £1,167-£1,334
    4m2 4 £4,500 – £5,000 £3,000–£3,333 £1,500-£1,667
    5m2 5 £5,500 – £6,000 £3,666-£4,000 £1,834-£2,000
    6m2 6 £6,500 – £7,500 £4,333-£4,666 £2,167-£2,334

    Earning through the Renewable Heat Incentive (RHI)

    By installing a solar thermal system is that you may be eligible for the Renewable Heat Incentive (RHI) scheme.

    The RHI pays owners of solar thermal for the energy generated by the system. The payments are made on a quarterly basis over 7 years which could potentially see you earn back even more of the initial costs. It’s worth noting that the RHI is closing to new applications in March 2021, so you only have until that time to take advantage of both the Green Homes Grants and RHI scheme.

    The calculations in this table are estimates based on the domestic RHI tariff 2020/21 of 21.36p per kWh and deemed annual heat demand figures from the Solar Trade Association (UK average irradiation, south facing roof, 30 degree roof pitch, very little shading, no electric showers in home, twin coil solar cylinder).

    People in Household Deemed annual renewable heat demand (kWh) Annual RHI payment (approximate) Total RHI payments over 7 years
    2 1,006 £214 £1,498
    3 1,383 £295 £2,065
    4 1,746 £373 £2,611
    5 2,242 £479 £3,353
    6 2,428 £519 £3,633

    When you compare the cost of installing a solar thermal system with a Green Home Grant with the potential payback you could receive through the RHI, not to mention the savings you will be making on your heating bills, installing solar thermal panels is a profitable investment.

    People in Household Upfront cost to homeowner (cost not covered by the Green Home Grant) Potential RHI payback over 7 years Potential profit after 7 years
    2 £834-£1,000 £1,498 £498-£664
    3 £1,167-£1,334 £2,065 £731-£898
    4 £1,500-£1,667 £2,611 £994-£1,111
    5 £1,834-£2,000 £3,353 £1,353-£1,519
    6 £2,167-£2,334 £3,633 £1,299-£1,466

    Who is eligible for a Green Homes Grant for solar thermal?

    The following properties are eligible:apply to the Green Homes Grants scheme for funding up to £5,000 for solar thermal panels:

  • All owner-occupied homes (including long-leaseholders, shared ownership)
  • Landlords of private rented sector domestic properties
  • Landlords of social sector domestic properties (including LA owned homes)
  • Park home owners (for residential sites including Gypsy and Traveller sites)
  • New-build properties (domestic and non-domestic) are not eligible.
  • To qualify for the Green Home Grants low-income scheme (which offers grants of up to £10,000 to only owner-occupied properties and park homes) you must be in receipt of at least one of the following benefits:

  • Income based Jobseekers allowance (JSA)
  • Income based Employment & Support Allowance (ESA)
  • Income Support (IS)
  • Pension Guarantee Credit
  • Working Tax Credit (WTC)
  • Child Tax Credits (CTC)
  • Universal Credit (UC)
  • Disability Living Allowance (DLA)
  • Personal Independence Payment (PIP)
  • Attendance Allowance
  • Carer’s Allowance
  • Severe Disablement Allowance
  • Industrial Injuries Disablement Benefit
  • Contribution based Jobseekers allowance (JSA)
  • Contribution based Employment & Support Allowance (ESA)
  • Housing benefit
  • How to apply for a Green Homes Grant

    The application process for Green Homes Grants has not yet been confirmed, but it will be an online process starting in September 2020 and lasting until the end of March 2021. Only solar thermal installers who are certified by the MCS will be able to complete work under the Green Homes Grants scheme.

    Get free quotes for solar thermal

    If you think a solar water heating system could be the right choice for your home, your next step is to get multiple quotes for installation. Only when you have a quote for your solar thermal will you know how much of the cost of the installation you will need to cover (if any). You can then work with the installer to apply for the Green Homes Grant.

    We can put you in touch with up to 3 of the UK’s leading solar installation professionals for free, no obligation quotes. Use our simple online form and get solar thermal quotes from trusted traders in your area.


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