Green Business

Warm Homes Loan Scheme Launches: What It Means for Solar, Battery and Heat Pump Businesses

The government's Warm Homes Loan Scheme launched on 26 October 2026, offering no- and low-interest loans of up to £35,000 for heat pumps, solar panels and batteries through ten initial lenders, with installs by MCS-certified installers.

By Entrepreneur Group · Published 28 October 2026

The government's Warm Homes Loan Scheme launched on 26 October 2026, offering households across the UK no- and low-interest loans for solar panels, batteries, heat pumps and other clean energy technology. Loans run up to £35,000 depending on the technology, are offered through ten initial lenders, and installations must be carried out by MCS-certified installers.

For founders in the green home sector, this is a new source of customer finance. For other businesses, it is a signal of where the government expects demand for home energy upgrades to come from.

What the scheme offers

According to the Department for Energy Security and Net Zero's factsheet, published on 27 October, the scheme offers no- and low-interest loans with payments spread over many years and no upfront cost. Loans can be up to 5 percentage points cheaper than regular bank or high street loan rates, some are interest free, and in some cases terms run up to 30 years. It is open to households in England, Scotland, Wales and Northern Ireland, and lenders carry out their usual affordability and credit checks.

The maximum loan amounts are:

• Solar panels: £15,000
• Electrical storage battery: £15,000
• Air-to-water heat pump: £20,000
• Air-to-air heat pump: £10,000, once MCS certification is available
• Ground source heat pump: £35,000
• Biomass boiler: £20,000
• Heat network connection: £7,500
• Other micro-renewable systems: £20,000

The government gives the example of a £10,000 loan at 8% over seven years, which would cost about £155 a month, and says the scheme could save up to £285 a year on repayments. It says a heat pump, battery and solar panels together could cut energy bills by up to £550 a year.

HM Treasury's everyday fixes announcement on 26 October, ahead of the Budget, also highlighted the launch. MoneySavingExpert reports that the loans are partly backed by the Treasury, which is what allows lenders to offer the lower rates, and that loans run for a minimum of three years.

How customers access it

Customers apply through a participating lender or installer. The factsheet says ten lenders are offering loans at first, including HomeServe, Sunsave, Tandem Bank and The Money Co-op. Some lenders work only with specific installers, while others let customers choose any MCS-certified installer. All installations except heat network connections must be carried out by MCS-certified installers.

Loans can be combined with a Boiler Upgrade Scheme grant of up to £9,000 towards a heat pump, or Home Energy Scotland support in Scotland.

The scheme is at an early stage. DESNZ's lender page says the scheme will deploy £300 million of grant capital to grow the green home finance market. Applications for the first tranche of lenders closed on 29 July 2026, and a further window is expected later in 2026. The factsheet says more lenders and products are expected to join.

What this means for green businesses

This section is editorial guidance, not financial or legal advice.

• Check your MCS certification. Certification is the entry ticket for almost every loan-funded installation. If you are not certified, find out what it would take.
• Talk to participating lenders. Some lenders work only with chosen installers. Ask how installers join their panels and what paperwork they need.
• Explain the numbers carefully. Use the government's published figures, and make clear that savings depend on the home, tariff and usage. Lenders, not installers, decide who gets a loan.
• Follow consumer credit rules. Introducing customers to finance can bring regulatory duties. Check with the lender and take advice before discussing loan terms with customers.
• Plan for demand and supply. Cheaper finance could bring more enquiries. Check your capacity, equipment supply and lead times before promoting the scheme.

Frequently asked questions

How much can I borrow under the Warm Homes Loan Scheme?

Maximum amounts depend on the technology, from £7,500 for a heat network connection to £35,000 for a ground source heat pump. Solar panels and batteries can each be funded up to £15,000.

Do installers need MCS certification for the Warm Homes Loan Scheme?

Yes. The government says all installations except heat network connections must be carried out by MCS-certified installers.

Can the Warm Homes loan be combined with the Boiler Upgrade Scheme?

Yes. The government says homeowners can combine a loan with a Boiler Upgrade Scheme grant of up to £9,000 for a heat pump, or Home Energy Scotland support in Scotland.

Sources

1. DESNZ: Warm Homes Loan Scheme factsheet (27 October 2026) (reviewed 28 October 2026)
2. DESNZ: Warm Homes Loan Scheme, apply to participate as a lender (Phase 1) (reviewed 28 October 2026)
3. HM Treasury: Everyday fixes to make life easier for millions of Britons (26 October 2026) (reviewed 28 October 2026)
4. MoneySavingExpert: Warm Homes Loan Scheme (26 October 2026) (reviewed 28 October 2026)