Home Energy Scotland Loan and Solar: What Changed

Quick answer

The Home Energy Scotland (HES) loan still exists — but it no longer covers solar panels or battery storage. Scottish Government funding for domestic solar PV and batteries was withdrawn on 6 June 2024 and has not been reinstated. What the interest-free loan funds today is clean heating and energy efficiency: heat pumps, biomass, heat networks, insulation, and solar thermal water heating. If you want solar PV in Scotland in 2026, the routes that genuinely exist are 0% VAT until 31 March 2027, Smart Export Guarantee export income, and — only where the project also includes a heat pump — HES support for the heat-pump element.

What HES used to cover for solar

For several years the HES Grant and Loan was the most generous domestic solar offer anywhere in the UK. A Scottish homeowner could borrow interest-free towards a solar PV array, and borrow further interest-free towards battery storage fitted alongside it. Plenty of the systems we installed across West Lothian, Falkirk, Edinburgh and Glasgow up to mid-2024 were funded exactly that way, and the monthly repayment often landed close to the monthly energy saving.

That is still the version of the scheme described by most of the internet, by a lot of comparison pages, and — uncomfortably — by some quotes still being issued in Scotland today. It is out of date, and it is worth knowing that before you plan a budget around it.

Exactly what changed on 6 June 2024

Solar PV and battery storage were removed from the list of measures the HES Grant and Loan supports. The change applied to new applications from 6 June 2024. The Scottish Government's guidance on mygov.scot now states that grants and loans "don't apply to solar panels and batteries anymore", and the live Home Energy Scotland funding table has no solar PV row and no battery row at all. The underlying decision is documented in Scottish Government FOI release FOI-202400420618.

Two things follow, and both matter:

• There is no HES grant for solar PV or battery storage.
• There is no HES interest-free loan for solar PV or battery storage.

Not a reduced cap. Not a waiting list. Those measures are simply no longer funded.

It did not become "businesses only"

The usual follow-up question is whether the money moved to a business scheme. It did not. Business Energy Scotland runs a genuinely useful interest-free SME loan of up to £100,000 for Scottish businesses — but that scheme is explicitly not accepting new applications for solar PV projects either. There is no commercial back door to a domestic solar grant.

What Home Energy Scotland still funds in 2026

This is the current position of the grant and loan, measure by measure:

Eligible rural and island properties can add a £1,500 grant uplift on the heat measures. The full current detail sits on our Home Energy Scotland loan page.

The solar thermal trap

Solar thermal panels — and hybrid PV-T panels, which make electricity and heat water in the same unit — do still attract a £5,000 interest-free loan. You will see that quoted online as evidence that "HES still funds solar". It does not. Solar thermal is a water-heating technology, and PV-T is a water-heating hybrid. A standard solar PV array, which is what almost everybody means by solar panels, is not eligible under either heading. An installer who blurs the two is either working from old information or hoping you are.

"Interest-free" is not quite "free"

Where the loan does apply, it is 0% APR, so no interest is charged. It is not entirely cost-free: there is a 1.5% administration fee, capped at £150 per application. Repayment runs over 5–12 years depending on how much you borrow.

What this means if you want solar in Scotland now

The withdrawal changed how you pay for a system. It changed nothing about the generation, the export income or the VAT treatment. Three things remain true and are worth real money:

0% VAT until 31 March 2027. Qualifying domestic solar, battery and other energy-saving installations are zero-rated for VAT, so there is nothing to add on top of the quoted price. That relief has a firm end date of 31 March 2027 and no announced replacement, which makes it the closest thing to a deadline in the Scottish market right now.

Smart Export Guarantee income. Every unit you generate and do not use is bought by your supplier under SEG. Rates vary sharply between suppliers, and time-of-use export tariffs pay considerably more in the evening peak — the worked numbers are in Octopus Flux + Battery: The Maths. SEG registration requires an MCS certificate, which is one good reason MCS still matters even with the loan gone.

HES support where the job includes a heat pump. If you are electrifying your heating as well as generating your own power, the heat-pump element can still take up to £7,500 as a grant plus up to £7,500 as an interest-free loan, with the £1,500 uplift in eligible rural and island areas. The solar array is paid for separately — but a combined project is usually the strongest case we model. The detail is in Air Source Heat Pump Cost in Scotland 2026.

How to fund a solar system in Scotland today

1. Price the job with 0% VAT already in it. Any quote should state that the installation is zero-rated. A VAT line presented as an extra before 31 March 2027 needs explaining.

2. Put SEG income into the payback maths, not beside it. Export earnings are part of the return. Ask which SEG tariff and rate the modelling assumes, and check it against what your supplier actually pays.

3. Treat lender finance as lender finance. Ideal4Finance (FRN 703401) is commercial credit from a lender — not a government scheme, not a grant, and not the HES loan. Compare the total amount repayable against paying outright, and be wary of anyone who lets the two blur together.

4. Model your heating at the same time. If a heat pump is anywhere on your five-year list, quoting it alongside solar is what legitimately brings HES money back into the conversation.

5. Get the numbers in writing with no funding assumed. Generation estimate, self-consumption assumption, export rate, and the total cost. If a quote only works because of a grant, it does not work.

The traps that still apply to the loan that remains

For the heat pump and insulation measures HES does still fund, the process trips people up in the same four places it always did.

Signing the install contract before loan approval. If HES declines, you are committed to the work regardless. We never start on site without written approval in hand.

MCS certificate dates that do not line up. HES needs the certificate dated within the install completion window. Switching installers part-way through is where this usually breaks.

The property changing hands mid-application. A sale or refinance between application and install can collapse the loan. Pause the application if a sale is in motion.

Using a non-MCS installer for part of the work. HES requires MCS certification for the renewable elements. Mixed quotes with a non-MCS contractor on that work do not qualify.

Questions we now get on every Scottish solar quote

"Has the loan come back?" No. It ended for solar and batteries on 6 June 2024 and, as of 2026, has not been reinstated.

"My neighbour got a loan for panels." Almost certainly true — and almost certainly before June 2024. Applications approved under the old rules were honoured; new ones are not accepted for solar.

"Should I wait in case it returns?" Nothing has been announced, so waiting is a bet on an unannounced policy. Meanwhile 0% VAT has a firm end date of 31 March 2027, and every year without a system is another year of full-price electricity.

"Is there any Scottish funding for solar at all?" For most households, no. What is marketed as solar funding is finance rather than funding — and the difference is the whole point.

Next step

Ecoaim handles HES grant and loan applications in-house for heat pumps and insulation, and quotes solar the honest way: 0% VAT, realistic SEG assumptions, and no funding we cannot evidence. Free eligibility check and a fixed-price quote within 24 hours — call 03330 384 380, read our grants and finance guide, or request a quote.