Low-cost loans for solar panels could save households hundreds on bills – thinktanks
Get the Energy newsletter
Daily energy & climate — solar, EVs, oil, the policy fights and tech bets shaping the transition. Free.
- New Economics Foundation and the Finance Innovation Lab propose a scheme in which the Bank of England would offer commercial banks access to funds at low or no interest, who would then provide households ~2% loans for rooftop solar-plus-battery installations.
- The proposal could outfit ~8 million homes — about two-thirds of UK households — with panels, saving households ~£250/year on energy bills at no direct cost to the Treasury.
- Households would repay ~£45/month while saving ~£66/month on bills, with loans recoupable either through energy companies or direct bank collection over a 15-year term; savings continue for the remaining life of the panels.
- Solar-plus-battery systems cost ~£6,000 upfront, keeping them out of reach for cash-strapped households despite being one of the cheapest ways to generate electricity.
- Ed Miliband, the energy secretary, said a new rooftop solar panel is being installed every two minutes in 2025, with March seeing 25,000 installations registered with MCS — the most in a single month for 11 years — bringing total UK installations to over 2 million.
- Finance Innovation Lab chief executive Jesse Griffiths argued the scheme would relieve pressure on the £15bn Warm Homes Plan, which prospective PM Andy Burnham's defence-spending push threatens; the Bank of England declined to comment.
- Previous government-backed green upgrade schemes such as the scrapped coalition-era Green Deal failed because they required Treasury subsidy; Griffiths pointed to similar low-cost lending models in Japan and China as proof of concept.
Why it matters: For the roughly 8 million UK households with suitable rooftops, a 2% Bank of England-backed loan could eliminate the £6,000 upfront barrier to solar-plus-battery systems while saving £250 annually — and crucially, taxpayers carry no direct cost, easing pressure on the £15bn Warm Homes Plan that Burnham's defence priorities threaten. Consumer demand is already surging: 25,000 installations in March marked an 11-year monthly record.
