Borrowing to pay for solar panels does not change the price of the system. It changes the payback. Take the Energy Saving Trust's benchmark install, around £7,600 for a typical 4.5kWp system, and put it on a five-year loan at 9.67%, which is the Bank of England's reported average rate on new personal loans in June 2026. You repay £158.75 a month, £9,525 in total, and £1,925 of that is interest. A system that pays for itself in about nine years in London takes about eleven once the borrowing is counted.
That calculation is not on most solar finance pages, which is odd, because the industry's own consumer code makes it compulsory. Everything below was verified on 18 August 2026 against the Bank of England, the Energy Saving Trust, the Renewable Energy Consumer Code, gov.uk, Home Energy Scotland and the Consumer Credit Act 1974.
We are a quote comparison site. We do not lend, arrange, broker or advise on credit, and nothing on this page is financial advice. It is published so you can read a finance offer properly before you sign it.
The five ways UK households pay for solar in 2026
There are five realistic routes, and they split cleanly into paying now, borrowing, and being funded. Most households end up in one of the first three.
| Route | What it costs | Who it suits |
|---|---|---|
| Cash | The quoted price, nothing more | Anyone with savings earning less than a loan would cost |
| Unsecured personal loan | Around 9.67% on average in June 2026, so roughly £1,900 of interest over five years on £7,600 | Households who want the debt gone in three to five years |
| Finance arranged by the installer | Varies enormously, from genuine 0% deals to double-digit APRs | Convenience, if you check the rate against a standalone loan |
| Adding it to your mortgage | The lowest rate and often the highest total, because the term is so long | People remortgaging anyway who want the smallest monthly figure |
| Funded or subsidised schemes | Nothing, or a zero-interest loan, but eligibility is narrow | Low-income households, and Welsh households eligible for Nest |
A sixth route sits alongside these rather than replacing them: group buying, where a council-backed scheme negotiates a price on behalf of thousands of households at once. It changes the price rather than the funding, and it is covered further down.
What a solar loan actually costs
The Bank of England publishes the real average rate UK households are paying, and in its Money and Credit release for June 2026 the effective interest rate on new personal loans to individuals was 9.67%. Credit cards were charging 21.49% and overdrafts 21.17%. Those are averages across all borrowers, so a strong credit file beats them and a weak one does not, but they are a far better anchor than an advertised rate you may not be offered.
Here is what that average rate does to the Energy Saving Trust's £7,600 benchmark system over three common terms. The arithmetic is ours: a standard repayment calculation, with the annual rate converted to a monthly one, and no arrangement fee assumed.
| How you borrow £7,600 | Monthly | Total repaid | Interest |
|---|---|---|---|
| Personal loan, 3 years at 9.67% | £242.62 | £8,734 | £1,134 |
| Personal loan, 5 years at 9.67% | £158.75 | £9,525 | £1,925 |
| Personal loan, 10 years at 9.67% | £97.37 | £11,685 | £4,085 |
| Credit card, 5 years at 21.49% | £199.77 | £11,986 | £4,386 |
| Added to a mortgage, 25 years at 4.35% | £41.24 | £12,372 | £4,772 |
The pattern in that table is the single most useful thing on this page. The term matters more than the rate. Ten years at 9.67% costs more than twice as much interest as three years at the same rate. And the cheapest rate in the table, the mortgage, produces the largest interest bill of the lot, because 25 years of even a low rate adds up. Source: Bank of England, Money and Credit, June 2026, published 29 July 2026.
Putting solar on the mortgage: lowest monthly, highest total
Adding £7,600 to a mortgage at the Bank of England's June 2026 average rate on newly drawn mortgages, 4.35%, costs £41.24 a month, which is less than most households save on their electricity bill. That is the appeal, and it is real. Spread over the remaining 25 years of a mortgage, though, the interest comes to £4,772, roughly two and a half times the interest on a five-year personal loan at more than double the rate.
Two other things change when the borrowing is secured on your house rather than unsecured. Your home is at risk if you do not keep up repayments, which is not the case with a personal loan. And a further advance or remortgage usually means valuation and product fees, and possibly an early repayment charge if you move deal mid-term. If the monthly figure is what makes solar possible, the mortgage route works. If the total cost is what you care about, a shorter unsecured loan beats it comfortably. Some lenders price "green" additional borrowing below their standard rate for energy efficiency work, so it is worth asking your own lender specifically rather than assuming the headline rate.
What borrowing does to your payback period
This is the calculation the industry's own rules require, and the one you almost never see. RECC, the Renewable Energy Consumer Code, states at section 5.3.3 that where finance is involved, "any estimate of savings, periods of recovery ('payback') or other measures of financial effectiveness must take account of monthly repayments as well as of the full amount payable, including interest".
The Energy Saving Trust publishes payback periods with export payments included, based on fuel prices as of July 2026: nine years in London, ten to eleven in Manchester, nine to ten in Aberystwyth, and eleven to twelve in Stirling, depending on whether you are home during the day. Working backwards from its £7,600 benchmark, those payback periods imply an annual benefit of roughly £844 in London, £760 in Manchester and £691 in Stirling. That last step is our arithmetic on the Energy Saving Trust's two published figures, not a figure it publishes itself.
Now put the same system on that five-year loan, so the real outlay is £9,525 rather than £7,600:
| Location | Payback paying cash | Payback on a 5-year loan |
|---|---|---|
| London | 9 years | About 11 years |
| Manchester | 10 years | About 12 and a half years |
| Stirling | 11 years | About 14 years |
Roughly two to three extra years, then. That is not an argument against borrowing. Panels should last 25 years or more, so a system that breaks even at year 14 still spends a decade or more in profit, and during the loan itself the electricity saving is offsetting most of the monthly repayment. It is an argument against being sold a nine-year payback figure by a salesperson who is also selling you a ten-year loan. Our guide to whether solar panels are worth it works through the underlying savings, and the full solar panel cost guide sets out the £7,600 benchmark and what moves it.
A better price beats a better rate almost every time. Tell us about your home and we will connect you with MCS-certified installers covering your area, free and without obligation.
Get My Free Quotes →Installer finance: the rules your installer has to follow
If an installer offers you finance, it must be authorised by the Financial Conduct Authority to do so. RECC's Consumer Code puts it at section 4.5: "If finance, whether in the form of a personal loan or a hire purchase agreement, is part of a Code Member's offer to a Consumer, then the Code Member must ensure they hold valid, appropriate and up-to-date authorisation." You can check any firm yourself on the Financial Services Register, and the FCA advises checking "that the firm reference number (FRN) and contact details you've been given match the details" there.
The rest of the code is worth knowing before a salesperson is sitting in your kitchen. Under the version dated 5 July 2023:
- Quotes must be itemised. Section 5.4.2 requires "an itemised list of all the Goods to be supplied", with goods and services priced separately, "including the costs of any required safety checks and all taxes payable including VAT", under a "no surprises" policy.
- Savings estimates must be based on your actual usage. Section 5.3.3 requires estimates in writing, "based on Consumers' actual energy use and pattern of energy use", with assumptions "clearly explained and attributed to a reputable source".
- You get 14 days to cancel a contract signed at home. Where you sign during a visit to your home, anywhere else away from the installer's premises, or entirely at a distance by email or post, section 6.2.1 gives the right to cancel without penalty "within 14 days of the date on which the last item of the Goods is delivered to the Consumer's home", with any money refunded within 14 days. Sign on the installer's own premises after visiting them and that automatic right does not apply.
- Deposits are capped and insured. Section 6.3 says a deposit should be "a reasonable percentage of the estimated overall costs of the work, for example 15 per cent" and that "it should not exceed 25 per cent under any circumstances". A deposit and any later stage payment together "cannot exceed 60 per cent". All of it must be insured so that if the installer goes under before finishing, another code member completes the job at no extra cost to you. Protection periods vary by insurer, commonly 90 to 120 days.
- Pressure selling is banned outright. Members cannot offer a high initial price then discount it, cannot offer a discount for signing the same day, and cannot claim limited availability to hurry you.
That last one matters more than it looks. A "today only" solar discount is not a bargain, it is a code breach. Our guide to choosing an MCS-certified installer covers the certification and consumer code checks in full. Sources: RECC Consumer Code and RECC deposit and workmanship protection.
Section 75: the protection a personal loan does not give you
If you pay for solar on a credit card or through credit arranged by the installer, section 75 of the Consumer Credit Act 1974 makes the lender jointly liable with the installer for misrepresentation or breach of contract. The Act says that where you have "any claim against the supplier in respect of a misrepresentation or breach of contract", you "shall have a like claim against the creditor". It applies where the cash price is more than £100 and not more than £30,000, which covers essentially every domestic solar installation.
The catch is in the phrase "debtor-creditor-supplier agreement". The protection exists because the credit is linked to the purchase. Draw down a general-purpose personal loan into your current account and pay the installer by bank transfer, and you have no section 75 claim against the lender at all. That is a genuine argument for installer-arranged credit or a credit card deposit, and it is rarely mentioned by either side. Source: Consumer Credit Act 1974, section 75.
Solar Together is now Switch Together
The council-backed group-buying scheme that ran for years as Solar Together has been renamed Switch Together, and solartogether.co.uk now redirects to switchtogether.co.uk. It is still run by iChoosr Limited, registered in England and Wales, company number 08241539, and still works the same way: local authorities including Essex, Surrey, Cardiff, Tonbridge, Windsor and Maidenhead invite residents to register, vetted installers bid for the combined volume, and each household gets a personalised offer.
Registration is "free and without obligation", and the process runs in four stages: register with details of your home and energy use, receive a personal offer, have a qualified installer confirm your roof on a survey, then installation. You are not committed until you accept the offer, which makes it a low-cost way to get a benchmark price even if you end up going elsewhere.
Group buying is not automatically the cheapest route. It is one quote, negotiated at volume, from one installer per area. Treat it as a strong reference price and compare it against two or three direct quotes rather than assuming it wins. Our guide to solar panel cost by system size gives you the per-kWp yardstick to judge any offer against.
The funded routes, and why most households will not qualify
There is no universal government grant for solar panels in the UK, and the Energy Saving Trust says so plainly: "There aren't any dedicated solar panel grants from the UK Government." What exists is targeted at low-income households, and it differs by nation.
The Warm Homes Plan is the one to watch for everyone else. It commits "up to £1.7 billion of the facility to new low- and zero-interest consumer loans, to help more households meet the upfront costs of improving their homes", combined with up to £300 million of other government funding to lower the cost of loans for consumers. It covers solar panels, batteries and heat pumps, and it is being rolled out in phases with eligibility detail still to come. If it lands as described, a zero-interest loan removes the entire interest column from the table above. Source: gov.uk, Warm Homes Plan.
In Scotland, the position is more restrictive than most pages suggest. Home Energy Scotland's grant and loan scheme does not fund standalone solar PV. Only solar PV-T hybrid systems, which produce both electricity and hot water, are eligible, at up to £5,000 as an interest-free loan with no grant available, with an administration fee of 1.5% of the loan value capped at £150 per application and a repayment term of up to five years on loans under £5,000. There is no row for standalone solar PV in the funding table at all. Source: Home Energy Scotland grants and loans.
In Wales, the Nest scheme installs free solar panels for eligible lower-income households, and across Great Britain ECO4 can include solar in narrow cases. Our guide to solar panel grants in the UK works through eligibility for each of these scheme by scheme and nation by nation.
The deadline that behaves like a discount
Solar panels installed in residential accommodation currently carry 0% VAT, and that zero rate ends on 31 March 2027. HMRC's guidance is explicit: "A zero rate applies to the installation of certain specified energy-saving materials from 1 May 2023 to 31 March 2027", and "from 1 April 2027 onwards these will revert to the reduced rate of VAT of 5%." The 1 May 2023 date is when the current notice took effect UK-wide. In Great Britain the zero rate has applied since 1 April 2022, and Northern Ireland was brought into line from 1 May 2023, which is why the notice runs from that date. Either way, the relief has been in place for years and the date that matters now is the end date.
On a £7,600 system, 5% is about £380. That is not a reason to rush a decision, and it is a smaller number than the difference between a good quote and a bad one. It is worth knowing about if you are already planning an install for 2027, and worth remembering that the increase is to 5%, not to the standard 20% rate that some sales patter implies. Our guide to VAT on solar panels covers what qualifies, including batteries fitted at the same time. Source: VAT Notice 708/6, gov.uk.
How to read a solar finance offer without getting caught
Compare the total amount payable, not the monthly figure. Six questions do most of the work:
- What is the total amount payable, in pounds? Not the APR, not the monthly payment. The number you will have handed over by the end.
- Is the cash price the same as the finance price? A genuine 0% deal costs the lender money, and that cost sits somewhere. Ask what the price would be if you paid cash today and compare the two.
- Who is the lender, and is it on the FCA register? Match the firm reference number, not just the name.
- Does the payback estimate include the repayments? RECC section 5.3.3 says it must. If it does not, the quote is not code-compliant.
- What happens if I repay early? Early settlement on a regulated loan is a right, but the fee structure varies, and mortgage borrowing can carry an early repayment charge.
- Is my deposit within 25% and insured, and by whom? The code's own example of a reasonable deposit is 15%. Get the insurer's name and the protection period in writing.
One more, worth its own line. A solar quote that only becomes affordable through a long finance term is usually an expensive quote rather than an affordable system. Before you fix the funding, fix the price: get three itemised quotes for the same specification, and use our guides to how many panels you need and Smart Export Guarantee rates so you know what the system should generate and earn before anyone quotes you a monthly payment. If you are also weighing a battery, our solar battery storage guide explains why adding one usually lengthens payback rather than shortening it.
Three itemised quotes from MCS-certified installers tell you far more than any APR comparison. It is free, and there is no obligation.
Get My Free Quotes →Solar panel finance: frequently asked questions
Yes, and most installers offer it, but the lender must be authorised by the Financial Conduct Authority and so must any installer arranging the credit. RECC's Consumer Code section 4.5 requires code members offering a personal loan or hire purchase agreement to hold "valid, appropriate and up-to-date authorisation". Your alternatives to installer finance are an unsecured personal loan from a bank, adding the cost to your mortgage, or, if you are eligible, a zero-interest loan under the Warm Homes Plan once that scheme opens fully. Check any firm on the FCA's Financial Services Register before signing.
At the Bank of England's June 2026 average rate on new personal loans of 9.67%, borrowing £7,600 costs £158.75 a month over five years, £9,525 in total, of which £1,925 is interest. Over three years it is £242.62 a month and £1,134 of interest. Over ten years the monthly payment drops to £97.37 but the interest rises to £4,085. The term drives the total cost more than the rate does, so the shortest term you can comfortably afford is usually the cheapest overall.
Yes, by roughly two to three years on typical terms. The Energy Saving Trust puts payback with export payments at nine years in London, ten to eleven in Manchester and eleven to twelve in Stirling at July 2026 fuel prices, based on a £7,600 system. Put the same system on a five-year loan at 9.67% and the real outlay becomes £9,525, which stretches payback to roughly eleven years in London, twelve and a half in Manchester and fourteen in Stirling by our arithmetic. RECC section 5.3.3 requires any payback estimate involving finance to take account of the monthly repayments and the full amount payable including interest.
A mortgage gives the lowest monthly payment and usually the highest total cost. At the Bank of England's June 2026 average rate on newly drawn mortgages of 4.35%, adding £7,600 over 25 years costs £41.24 a month but £4,772 in interest, against £1,925 on a five-year personal loan at 9.67%. Mortgage borrowing is also secured on your home, so your property is at risk if you cannot keep up repayments, and fees or early repayment charges may apply. Choose the mortgage if the monthly figure is what makes the project possible, and the shorter unsecured loan if total cost is what matters.
It covers solar panels bought with linked credit, such as a credit card or finance arranged by the installer, where the cash price is more than £100 and not more than £30,000. Section 75 of the Consumer Credit Act 1974 makes the lender jointly liable with the installer for misrepresentation or breach of contract, so you have a claim against the lender as well as the company that fitted the system. It does not apply to a general-purpose personal loan paid into your bank account and then transferred to the installer, because that is not a debtor-creditor-supplier agreement. Paying at least part of the cost on a credit card is one way to keep the protection.
It has been renamed Switch Together, and the old solartogether.co.uk address now redirects to switchtogether.co.uk. The scheme is still operated by iChoosr Limited, company number 08241539, in partnership with local authorities including Essex, Surrey, Cardiff, Tonbridge, and Windsor and Maidenhead. Registration remains free and without obligation: you register your home and energy use, vetted installers bid for the group volume, you receive a personal offer, an installer surveys your roof, and only then do you decide. Treat the offer as a strong reference price and compare it with two or three direct quotes.
No more than 25% of the final contract price, and it must be insured. Section 6.3 of the RECC Consumer Code says a deposit should be "a reasonable percentage of the estimated overall costs of the work, for example 15 per cent" and "should not exceed 25 per cent under any circumstances", while a deposit plus any later stage payment together cannot exceed 60 per cent. All deposits and advance payments must be insured so another code member can finish the job if your installer stops trading. Protection periods differ by insurer, commonly 90 to 120 days, so ask for the insurer's name and the length of cover in writing.
All rates and rules on this page were verified on 18 August 2026 against the Bank of England's Money and Credit release for June 2026, the Energy Saving Trust's solar panel guidance (last updated 13 August 2026), the RECC Consumer Code, gov.uk VAT Notice 708/6, the Warm Homes Plan, Home Energy Scotland and the Consumer Credit Act 1974. Interest rates change monthly and the rate you are offered depends on your circumstances. RenewQuote does not lend, arrange or broker credit, and this page is information rather than financial advice.