The Government has launched its Warm Homes Loan Scheme with ten lenders offering finance for solar panels, batteries, heat pumps and other low-carbon home upgrades across the UK.
The first products include no- and low-interest loans, with households able to spread the cost of installations over several years instead of paying the full amount upfront. Individual technology limits range from £7,500 for a heat-network connection to £35,000 for a ground-source heat pump.
For the retrofit supply chain, the scheme also carries an installation requirement: every funded installation apart from a heat-network connection must be carried out by an MCS-certified installer. That directs the initial workload towards certified solar, battery and heat-pump contractors.
Scaffolding and refurbishment works to historic buildings in central London in August 2026. Photo: London Construction Magazine.
Loan limits reach £35,000 for ground-source heat pumps
The Department for Energy Security and Net Zero published the consumer offer on 27 October. The maximum amount supported depends on the technology being installed.
| Technology | Maximum supported loan |
|---|---|
| Solar panels | £15,000 |
| Electrical storage battery | £15,000 |
| Air-to-water source heat pump | £20,000 |
| Air-to-air source heat pump | £10,000 when MCS certification is available |
| Ground-source heat pump | £35,000 |
| Biomass boiler | £20,000 |
| Heat-network connection | £7,500 |
| Micro-renewable system | £20,000 |
Households in England, Scotland, Wales and Northern Ireland can use the scheme, subject to the participating lender's normal affordability, credit and eligibility checks. Some products are interest free, and repayment periods can extend to 30 years in some cases.
The Government says it has worked with lenders to reduce borrowing rates by up to 5% compared with their regular lending products. Its example uses a £10,000 loan over seven years at 8%, where a homeowner would currently repay about £155 a month; the supported product could reduce repayments by up to £285 a year.
Ten lenders join the first phase
The first lenders are HomeServe, working with E.ON; HTG Finance; Propensio; Secure Trust Bank; Selina Finance; South Manchester Credit Union; Sunsave; Tandem Bank; The Money Co-op; and This Bank.
The individual products are lender-led, so borrowers will still need to compare the interest rate, total amount repayable, monthly costs and repayment period. Some lenders will work with named installation partners, while others will allow customers to select an MCS-certified installer.
The Government says a household installing solar panels, battery storage and a heat pump could cut its annual energy bill by up to £550, with a further £300 saving possible where the household also uses a suitable time-of-use electricity tariff.
Those are modelled savings, and the actual result will depend on the property, system size, energy use and tariff. The scheme arrives after almost 150,000 solar installations were recorded in the first six months of 2026, while heat-pump sales reached a record level in 2025.
MCS requirement puts certified installers at the centre
The installation rule is the part most directly relevant to contractors. Solar, battery, heat-pump, biomass and other qualifying systems financed through the scheme must be installed by an MCS-certified contractor; heat-network connections are the exception.
That brings installer certification into the finance process as well as the technical work itself. Customers are being told to retain the quotation, finance agreement, invoice, proof of purchase and MCS certificate after installation.
The loans can also be combined with a grant of up to £9,000 through the Boiler Upgrade Scheme, or with Home Energy Scotland support in Scotland, where the relevant eligibility rules are met. LCM's Budget 2026 construction preview has examined the wider funding position for heat pumps and the Warm Homes programme.
Air-to-air heat pumps are included with a loan limit of £10,000 once MCS certification is available for the technology. Their growing role in domestic retrofit, including reversible systems capable of heating and cooling, is covered in LCM's analysis of the UK residential cooling market.
The ten lenders form the first part of the Warm Homes Loan offer. The Government expects further lenders and finance products to join as the scheme develops.
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