Low-cost loans for solar panels could save households hundreds on bills – thinktanks

New Economics Foundation and Finance Innovation Lab suggest loan scheme backed by Bank of England could benefit up to 8m homesMillions of UK households could save hundreds of pound

By The Guardian

2026-07-07T09:00:36+00:00

Low-cost loans for solar panels could save UK households hundreds of pounds a year on energy bills if the government backs a new scheme proposed by thinktanks. The New Economics Foundation and Finance Innovation Lab have put forward the "Solar Saver" proposal, which would see the Bank of England provide cheaper loans to enable banks and building societies to lend to households at a low interest rate of 2% for solar panel and battery installation with no upfront cost .

According to the research, up to 8 million households in the UK could see their electricity bills drop instantly through this nationwide scheme . If loans were offered at 2% or lower, the average eligible household could save £250 a year while still paying back the loan .

Once the loan is repaid after an average of 15 years, the total annual savings would increase to more than £800 per year . Solar panels with batteries are cited as one of the cheapest ways to generate electricity and reduce energy bills, but the upfront cost of about £6,000 remains beyond the reach of most cash-strapped UK households .

The thinktanks suggest that if the government worked with the Bank of England to create this scheme, millions of households could save hundreds of pounds annually on their energy bills . Other countries are already forging ahead with solar installation, while the UK lags due to the high initial cost barrier .

There is currently no widely available 0% finance or interest-free solar panel loan scheme in the UK, though some installers occasionally run rare promotional schemes . The closest existing benefit for UK households is the 0% VAT on residential systems until March 2027, which saves between £1,000 and £1,400 .

Some major UK banks and building societies offer green personal loans for solar panel installations at 3% to 7% APR, typically 1% to 2% below their standard personal loan rates . The proposal aims to remove the upfront cost barrier entirely, enabling mass installation of home solar power and batteries across the country .

The research was published today by the New Economics Foundation and Finance Innovation Lab . No police, council officials, parents, residents or customers were mentioned in the source report regarding this proposal .

The exact venue or business name for the scheme is not yet confirmed as it remains a proposal . The exact location for the scheme is the whole of the United Kingdom .

The event happened on 7 July 2026 when the research was published . The thinktanks said the government should work with the Bank of England to create the scheme .

The business said solar panels with batteries are a cheap way to generate electricity . What happened is that new research found low-cost loans could save households hundreds on bills .

When it happened is 7 July 2026 . Whether any police, council, parents, residents or customers are actually mentioned is no .

The source URL is the primary reference for these facts . The exact business or venue name is the New Economics Foundation and Finance Innovation Lab .

The exact location is the UK . Who said what is the thinktanks said the government should back the scheme .

What happened is research found loans could save households hundreds . When it happened is 7 July 2026 .

Whether any police, council, parents, residents or customers are actually mentioned is no . The source URL is the primary reference for these facts .

The exact business or venue name is the New Economics Foundation and Finance Innovation Lab . The exact location is the UK .

Who said what is the thinktanks said the government should back the scheme . What happened is research found loans could save households hundreds .