Grants for Solar Panels in Scotland

8 Best Grants for Solar Panels in Scotland

The solar panel demand has increased in Scotland. However, there are grants for solar panels in Scotland available to assist homeowners in installing and reducing the cost of solar panels. Resources for solar energy are redistributed to eligible recipients in Scotland.

Solar panels enable you to generate free, green energy by converting sunlight into electricity. This electricity can then be used to power the appliances in your home. 

However, if the solar panels produce more electricity than your appliances use, this extra electricity can be sent to the electricity grid. It also means a reduction in your energy bills.

Grants for solar panels have been introduced so that Scottish homeowners and tenants can lower their carbon footprint, so the planet will be good and help reduce bills, making solar panels more attractive.

According to the Microgeneration Certification Scheme (MCS), there are more than 144,000 homes with solar panels in Scotland, as the cost of solar panels in Scotland on average is about  £7,642 for a 3.5 kW solar panel system, including installation. Going solar in Scottish homes has cut average electricity bills by 57%.

The Scottish Government has made it easy to get solar panels and cut your electricity bills, which is huge during the cost of living..

This article will lead you through everything you need about the available Scottish Government grants that help you create a warmer home that’s cheaper to run.

Let’s dive in!

How  Solar Panels Works

Solar PV panels are made up of semiconductor cells. A direct electric current (DC) is generated when light is shone on these cells.

A solar inverter helps convert the Direct current into Alternating Current (AC) electricity, which is used to power your domestic appliances.

Benefits of Solar Panels

  • A renewable source of energy: Electricity is generated by solar panels using the energy from the sun. 

  • Cost-effective with little maintenance: Energy bills are reduced when you rely on solar energy

  • Help to lower carbon emissions: Carbon dioxide and other gas emissions are reduced, keeping the environment safe and healthy.

  • Increases the home value: It is seen as a long-term investment as your home resale value will be increased. Buyers will be willing to pay more for a home with solar energy.

  • Availability of Government Grants: The Scottish Government both offer grants and funding to help with the initial cost of generating solar electricity

  • Energy independent:   Your electricity is generated, so you are less reliant on the grid. Therefore, you won’t be affected or burdened by fluctuating energy prices.

Grants for Solar Panels in Scotland

  • Home Energy Scotland Grant
  • Community and Renewable Energy Scheme (CARES)
  • Scottish Government SME Loan Scheme
  • The Smart Export Guarantee (SEG)
  • Energy Storage Systems (Batteries) Grants 
  • Warmer Homes Scotland programme
  • Energy Company Obligation Grant Scheme
  • Zero VAT Rate on Solar Panels

1. Home Energy Scotland Grant

Scotland residents looking to make sustainable energy improvements in their homes can opt for the Home Energy Scotland loan. This grant turns your house into a cozy, efficient home funded by the Scottish Government.

The grant covers renewable energy such as solar energy, heat Pumps, and their installation. Grant for energy efficiency improvements is up to 75% of the combined cost. A grant of £2,500 is also available for high-heat retention storage heaters.

The Energy Saving Trust administers these grants. You can choose the loan option and pay within this duration: 5 years for under £5,000, 10 years for £5,000 -,£9,999, and 12 years for more than £10,000. After you receive funds, repayment can begin.


You are eligible for this grant if you are a  homeowner or building your home. Landlords, businesses, or property developers are not eligible. Also, if you are receiving grant support from another source for the same improvement, you are eligible for this funding.

This grant does not cover the replacement of heat pumps, wind or hydro turbines, warm air units, solar water heating systems, insulated doors, and heat network connections. 


To opt for the grant, you should first and foremost find out if you’re eligible for the Grant in Scotland, complete a home energy check to help you lower your energy bills, have any benefits award letters or certificates to hand, find out if you have an energy performance certificate (EPC) by checking the Scottish EPC register.

You must personally contact the Home Energy Scotland call center to get advice about your home. 

You’re ready to proceed with your application once you have spoken to an advisor; a personalized link will be sent to complete an online application form to be completed personally. Installers cannot do this on your behalf or support you during the application process.

If the supporting documents submitted are incomplete, funding may be delayed.

2. Community and Renewable Energy Scheme (CARES)

The local or community residents are assisted by CARES for funding in solar energy installation across Scotland. 

The goal of CARES is that communities across Scotland are engaging, participating, and benefiting in the energy transition to net zero. The Scottish Government has set a target to secure 2GW of community and locally-owned renewable energy by 2030, supported by CARES.

CARES, since  2010, has provided the applicants with more than £58 million in funding  and has supported more than 600 projects  has been supported and more than 900 organization has been provided with free advice


To be eligible for this grant, applicants have charitable status with a non-profit community organization.


Applicants should contact the regional development officers to provide free, impartial advice and support on engaging with solar panels.

3. Scottish Government SME Loan Scheme

Small and Medium businesses are supported by the Scottish Government loan scheme by reducing the cost of solar energy.

This scheme was proposed to reduce energy consumption, financial stability for organizations, and increase economic competitiveness.

The grant covers the installation of energy-efficient measures such as heating upgrades, insulation, lighting, double glazing,  and many more.

You can apply towards the costs of a renewable heating system 75% cashback grant of up to £10,000, and for energy efficiency measures, a further 30% cashback grant of up to £10,000.

You could  also secure a loan of  £1,000 up to £100,000 for the resource-efficiency 

The loans are interest-free. The repayment term for all loans is eight years.


To be eligible for this loan, your business should fall within the EU definition of small and medium-sized enterprises, not-for-profit organizations, and charities or private business sector landlords.

  • You must be based in Scotland.

  • Have been trading for at least 12 months and be able to supply at least one set of annual accounts if requested.

  • Employees must be fewer than 250 Full Time.

  • Have a turnover not exceeding €50 million.

  • Be less than 25% owned by one or more other enterprises, and itself has a holding of less than 25% in any other enterprise.

  • Have a satisfactory credit score and be able to afford repayments.

  • Agree that repayments will be made within eight years for all measures. 

  • Be eligible for funding within the context of aid under the EU-UK Trade and Cooperation Agreement.


Applications for an SME Loan must be accompanied by a qualifying report such as the Business Energy Scotland’s free energy efficiency or renewable assessments. 

The application should be submitted to the fund administrators, providing they have all the information they require, and an authorized signatory signs the loan, 

The decision-making process and approval take ten working days. They will be delayed if any additional information is required.

4. The Smart Export Guarantee (SEG)

The Smart Export Guarantee (SEG) was introduced as a support system by the Scottish Government and the Department for Business, Energy and Industrial Strategy (BEIS) to ensure that the electricity exported to the grid is paid to small-scale renewable energy generators.

This was developed after the Feed-inTariff scheme for grant allocation on new solar panel applicants was closed in March 2019. The goal of SEG is that Scottish homeowners can sell the electricity produced by their solar panels back into the national grid.


All electricity-generating solar panel owners in Scotland.

There is no fixed amount an applicant receives for exporting electricity. Your tariff must always be greater than zero, which is all the requirements needed. The energy suppliers decide what tariffs to offer you. It could be single or multiple tariffs.

SEG tariffs can be fixed or variable. A fixed SEG tariff ensures a fixed rate per kWh of electricity is exported within the contract’s duration. While using the variable SEG tariff, the price varies based on market demand, and the price should not be less than zero.

You can also combine SEG payments with other financial support on solar panels, as SEG benefits are not linked to other grant support schemes on solar energy and installation.

The amount of money earned depends entirely on how much excess energy you’re sending to the grid and the contract of your SEG. 

For example, if you have a 3.5 kWh solar panel system and are on the most accessible Scottish Power tariff at 12p per kWh, you earn around £130. However, it all depends on how much sunlight exposure a home gets.


The technology and installer the applicant uses must be certified under the Microgeneration Certification Scheme (MCS) or its equivalent. To prove your installation meets the standard of an MCS certificate, the energy suppliers may ask you to provide the certificate.

A registered smart meter that records your exported electricity will also be needed.

For further advice and the type of tariff plan you may need, communicate with the electricity supplier that offers a SEG tariff in your locality. SEG licensees or electricity suppliers must offer an SEG tariff to all eligible generators.

5. Energy Storage Systems (Batteries) Grants 

Solar battery storage is a device that stores excess energy by reducing electricity bills to save money. During power outages, these batteries provide backup power as you can use this battery to power your appliances when your renewables aren’t producing electricity, making you more energy independent.

Utility companies in Scotland pay homeowners to store excess renewable energy obtained from their solar panels or grid. 

Your battery can buy energy at a cheaper rate when there is a large amount of energy in the national grid, and during the peak hour, your battery will then sell the energy back at a higher price. You can also prefer storing the cheap energy bought for your home’s needs later.


To be eligible for this grant, you must be a homeowner and spend at least £40 monthly on electricity. You can secure up to £6,000 (£1,250 grant plus £4,750 optional loan) if you are eligible for the grant.

Lead-acid and Lithium batteries are the types of batteries commonly offered in homes for solar panel storage.


Applicants should fill in an application form on the home energy Scotland website.

6. Energy Company Obligation Grant Scheme

The ECO grant scheme introduced in 2022 has provided free solar panels for Scotland residents, a major part of this scheme.

This grant covers 100% of the installation of a new solar panel to help reduce energy bills for low-income families who have claimed the child benefit and other householders.

To assist eligible households in meeting the cost of installing new solar panels, a grant of about £4 has been set aside. 


To be eligible for this grant

You must belong to a family who claims some benefits. Your home must be energy efficient, with an EPC rating of E, F, or G, as a new solar installation will benefit.

Under this scheme, grants for free solar energy storage batteries are not covered. The scheme also provides funding to replace electric storage heaters and central heating.


Contact the  ECO grant scheme through the online websites or get in touch with an energy supplier for an appointment arranged at your convenience.

You must provide proof of residency and benefit status on the visit of the energy assessor to your home. If all requirements are met an installation date will be arranged.

7. Warmer Homes Scotland programme

Some residents in Scotland are struggling to stay warm and keep up with energy bills. However, the Scottish Government’s Warmer Homes Scotland program has provided funding and support for these households.

Eligibility and Application

You must be a homeowner or a tenant of a private-sector landlord and have lived in the property for at least six months. Your home should have a poor energy rating, meet the Housing (Scotland) Act 2006 standards, and have a council tax band of A.

Your household also needs to either have no central heating and include someone who is over 75, or include someone who has a DS1500 or BASRiS medical certificate, or someone who is on certain benefits.

Eligibility is confirmed by contacting Home Energy Scotland, who will notify you of the available support, and If eligible, a referral to the managing agent will be made.

8. Zero VAT Rate on Solar Panels

Since April 2022, 0% VAT on solar panel purchases has been introduced, allowing solar panels to be sold at a cheaper rate for the next five years as previously homeowners had to pay 5% VAT on solar installation before the announcement of 0% VAT.

Chancellor Rishi Sunak said that the amount of VAT charged for domestic solar panel installations would change from 5% to 0%, meaning a tax savings worth over £1,000 will be offered to a household for solar panel installed, thereby saving on their energy bill of over £300 per year.

This has encouraged more people to switch to solar power and combat the rising cost of energy and living costs,

The VAT reduction will end in April 2027, so if you can afford solar panels within the next five years, consider doing so. You’ll save an average of £557 on your energy bills every year, breaking even in just 15.3 years.


You must be a resident of Scotland to be able to pay 0% VAT on solar panels. Business owners aren’t eligible for this benefit.


The application is done online.


1. How does battery storage for energy work? 

The solar panels generate an automatic power controller (diverter). This controller or diverter sends excess electricity to the battery for energy storage.

The battery is charged by electricity as an inverter, which makes the electricity ready for use with your appliances. This is done by converting electricity from a direct to an alternating current.

2. Why should we install solar panels?

A large proportion of your daily electricity costs are met by renewable energy if solar panels are installed on your roof.

Powering your appliances and lighting is cheaper as you rely less on the national grid for power.

3. Can a free solar panels grant be offered in Scotland?

Yes! The Scottish government’s energy efficiency scheme has provided grant funding for home improvements, including free insulation and replacement.

4. Do solar panels work in Scotland?

Yes. The Scottish weather is suitable for a solar panel installation. Solar panels do not only work in sunlight. They could also work in cloudy weather.

Solar panels work better on a south-facing roof, but if your roof faces East or West, you can still benefit from cheaper electricity.

If your roof faces East or West, there may be a 15% reduction in the energy you generate, but as long as the installation is not on a north-facing roof, the panels will be viable.

5. How much do solar panels cost in Scotland?

Solar panels cost £7,642 on average in Scotland for a 3.5 kW solar panel system, including installation.

6. How many people in Scotland have solar panels?

There are more than 144,000 homes with solar panels in Scotland, according to the Microgeneration Certification Scheme (MCS).


You can make a huge step towards electrical energy independence using solar panels in Scotland.

The solar panel system on your roof will generate electricity you can use in your home, lowering your energy bills and making your home more efficient. But the upfront cost of Solar Panels often puts people off.

But the good news here is that the  Scottish government has provided grants, incentives, loans and program benefits that can help fund solar panel owners in Scotland, which has been discussed in this article.

There are numerous grants available to choose from, depending on your eligibility and which suits you right.

Go solar, choose a greener environment, choose a healthy life.

If this article was helpful, let us know in the comment section. Check out the 10 Top Environmental Benefits of Solar Energy.

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