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

The government has announced that households will be eligible for thousands of pounds worth of solar panels and other green technologies to reduce their energy bills.

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

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

The plan was strongly welcomed by the energy and finance sector, but the Conservative Party said it would “burden households with ongoing high running costs”.

The Warm Homes Plan, first announced in 2024, promised to tackle a “national emergency” caused by rising energy bills, but it took two years for final details to be published.

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

Despite grants for households that can afford to pay, technologies are likely to have additional costs to install. After the subsidy, households pay an average of £5,000 for a heat pump.

But it estimates that for the average three-bedroom semi-detached house, installing these three technologies could save £500 a year on energy bills.

Although social charity Nesta and green energy charity MCS Foundation I guessed It could be more than £1,000.

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

Ed Miliband said that “the biggest problem facing the country is the cost of living crisis” and that “improving homes is an important part of reducing bills”.

Speaking to BBC Breakfast on Wednesday, the Energy Secretary said the move was aimed at “expanding the options people have so that things like heat pumps or solar panels are not just within the reach of the richest”.

The measures included in the plan are as follows:

• Extending the Boiler Upgrade Scheme by another year to 2029/30 and providing a £7,500 grant for heat pumps
• An additional £600 million will be made available to low-income households to receive funding for the full cost of solar panels and batteries, bringing the total amount available to £5 billion
• Low and zero interest loans for households regardless of income

The plan has been strongly welcomed by the energy sector, trade unions and the financial sector, which see the government’s long-term fiscal commitment as vital to driving private investment into green technologies.

“£15bn is a significant commitment, providing certainty for investors and businesses in the energy market,” said Dhara Vyas, chief executive of trade body Energy UK.

Camilla Born, chief executive of Electrify Britain, a joint campaign group of Octopus and EDF promoting the switch to electric heating, also welcomed the announcement and said it would help reduce bills in the long term, but added “the downside is it’s a plan and we need it to be delivered”.

Some of the programs are already distributing grants, but for the new funding, the government has not yet decided how and when households will receive the money. It was stated that “more interaction with the financial sector” was needed this year.

Deputy Reform leader Richard Tice slammed the plan, saying: “A scandalous waste of up to £15bn of taxpayers’ money, particularly buying Chinese-made solar panels, batteries and heat pumps, which is bad for British industry.”

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

Miliband told the BBC that work was ongoing to “diversify” supply chains and that the government was trying to “remove this concentration” through investment in the UK.

The government said the scheme would contribute to 180,000 new jobs in the clean heating sector; but some of this will likely come from retraining existing engineers.

The original plan focused on speeding up the 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 disputes with ECO, a government-funded insulation scheme, which included failed installations, led to the scheme not being expanded.

Aadil Kureshi, chief executive of Heat Geek, which retrains heating engineers to install heat pumps, said it was the right decision and that a renewed focus on green technology was better value for government money.

He said that unlike insulation, heat pumps are an early-stage technology and need government support to get the industry going.

“[The plan] it allows the industry to commit, to double down; “It allows investors and producers to say, let’s keep investing to get to a certain point where it’s on par with the hydrocarbon alternative,” he said.

The government hopes it will reduce the country’s planet-warming emissions by switching homes from oil-fired heaters and gas boilers to electric heat pumps powered by renewable energy. about 18% It comes from heating the house.

Dozens of people contacted BBC Your Voice about their experience in installing low-carbon technologies such as heat pumps.

Retired couple Chris and Penny Harcourt, who live in Stowmarket, bought a heat pump two years ago and said it was “the best update we’ve had on our home in 20 years.”

But they said it was expensive to run at current electricity prices, and it was only when they bought solar panels that they saw costs come down.

Watch BBC Climate Editor Justin Rowlatt’s conversation with Penny below.

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

But moving households away from gas heating has been a government priority.

Miliband has previously said Britain’s dependence on fossil fuels is its “Achilles heel” following significant fluctuations in prices and that clean energy is the only way to reduce energy bills.

Speaking to Radio 4’s Today program on Wednesday he said the rise in gas prices following Russia’s invasion of Ukraine demonstrated why the “mission for clean power is so important”.

He added: “We are replacing our dependence on imported gas with domestically produced clean energy where we control the price.”

But the UK has some of the highest electricity bills in Europe due to the impact of network improvements, government taxes and wholesale price increases from the price of gas.

Shadow Energy Secretary Claire Coutinho said: “Unless the government takes serious action to cut electricity bills, many of these taxpayer-funded schemes will burden households with continuing high running costs every year.”

The government hopes that increasing solar panels will be the solution.

The Warm Homes Plan will encourage households to choose a trio of low-carbon technologies – heat pumps, solar panels and batteries.

This will see most of the heat pumps’ electricity demand being met by home-generated solar power rather than from the grid; therefore, it pushes prices down.

Not everyone in the green industry supports all measures. Dale Vince, chief executive of energy company Ecotricity, praised the new funding for solar power but criticized the high level of subsidy for heat pumps.

He said they were not a national solution to reducing heating costs and greenhouse gas emissions, although he said they had a role to play.

“Solar panels give us the biggest bang for the buck, there’s no doubt about it; they’re the cheapest to install and the most efficient in terms of reducing energy bills. Heat pumps are at the other end of that scale,” said Vince.

“We could put solar panels on 10 million roofs or heat pumps on a million homes.”

The installation of low carbon technology will only be available to homeowners or social housing owners, but the Warm Homes Plan also includes recent announcements on changes to tenants’ rights.

From 2030, landlords will need to ensure their rental property has a minimum energy efficiency rating from E to EPC C.

However, the way a home is currently awarded an EPC score is based on estimated running costs rather than energy efficiency; this could mean a score reduction following a heat pump installation.

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

The industry also hoped the Warm Homes Plan would set out updated efficiency requirements for new builds (the Future Homes Standard) but said these would be published within the next few months.

There were concerns among environmentalists that the solar panel requirement on new homes would be removed.

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 these decisions have been made for a long time.

“Delaying timescales may still be frustrating for the poorer in colder and poorer quality rental homes, but the public overwhelmingly support better standards for new builds, so housebuilders should be encouraged to see new requirements in the longer term,” he said.

Additional reporting by Miho Tanaka