Ministers are accelerating the roll-out of grants and loans for solar panels and batteries to provide households with cost of living relief in the wake of the Iran war, The i Paper can reveal.
Low-income families could receive fully funded installations of solar panels and a battery up to a cost of £12,000, while higher earners will get low or zero interest loans.
The measures were first outlined in the £15bn Warm Homes Plan published by the Government in January, but there are now “active discussions” in Whitehall about getting money “out of the door quicker” to help people with the fallout from the Iran war, The i Paper understands.
The Warm Homes Plan earmarked £5bn to fund free home improvement packages for low income families.
The packages are tailored to whatever technologies are most suitable for someone’s home, covering upgrades such as solar panels, batteries, heat pumps, insulation and draught proofing.
Under the scheme, families can receive free installation of solar panels and a battery to their fully funded average cost, which currently stands at about £9,000-£12,000.
While the precise details of eligibility have yet to be set out, it is expected that the grants will be on offer to households with a total income of around £35,000 or less.
Those on middle and high incomes will meanwhile have access to no-interest and low-interest loans for the same upgrades, backed by £2bn of government funding.
The Warm Homes Plan is being viewed with increased importance by the Government because of the energy supply squeeze caused by the conflict in the Middle East, which is due to ramp up household bills and inflation.
Solar power a key weapon to combat energy shock
Last week, the energy consultancy Cornwall Insight predicted that a typical gas and electricity bill will rise to £1,929 a year from July – up 18 per cent on the current Ofgem price cap of £1,641.
With Sir Keir Starmer desperate to show that the cost of living is his “number one priority”, Government funding for solar panels and battery storage is seen as a key weapon in No 10’s armoury for combating the energy price shock.
At the end of March, Ed Miliband’s Department for Energy Security and Net Zero (DESNZ) launched a call for evidence on what financing solutions it could deploy for the Warm Homes Fund, and officials are keen to accelerate the delivery of the money, The i Paper has been told.
A Government source said: “There are active discussions in Government at the moment about how you can get some of this Warm Homes money capital out of the door quicker.”
The economic repercussions from the Iran war meant “there’s obviously an imperative to speed this up”, they added.
With consumer interest in solar and batteries exploding since the start of the conflict, DESNZ thinks it has a golden opportunity to kit out more homes with clean tech which will cut bills and improve energy security.
The global fuel crisis, caused by the near-closure of the Strait of Hormuz amid the US-Israeli war with Iran, has led to a spike in demand for solar power in the UK (Photo: Reuters)The UK’s biggest energy firm, Octopus Energy, has reported a 50 per cent rise in solar panel sales since America and Israel attacked Iran and oil and gas prices spiked.
The Government source said: “You’re already seeing demand up for solar panels massively.” They said this would dovetail with the Warm Homes Plan because it had been recalibrated prior to its launch from a “fabric first” approach – focusing on improving insulation – to a more “clean tech” oriented plan.
According to DESNZ, an owner-occupier three-bedroom mid-terraced home which gets solar panels and a battery could save £450 on their annual energy bills.
A three-bedroom detached house with a cavity wall that installs solar panels, a battery and adds a heat pump could save up to £550 a year, compared to a gas boiler.
This could rise to up to £800 a year if a time-of-use tariff is used to ensure they are charging their battery during off-peak hours.
Government push to get plug-in solar into shops
As well as making grants and loans available more rapidly to individual households, the Government is also looking at speeding up neighbourhood-by-neighbourhood retrofit programmes and projects to decarbonise social housing, which will be run by local mayors.
And DESNZ is keen to get plug-in solar on shop shelves because of the impact it can have on bills for households where rooftop installation is not possible. “We want to get that out in the shops as quickly as possible,” the Government source said.
The clean tech industry has welcomed the Warm Homes Plan and thinks that the energy price shock is likely to accelerate uptake of their products.
Chris Hewett, chief executive of Solar Energy UK, told The i Paper: “Since the Iran war started, there’s been a big uptick of interest for solar and batteries. We expect that to continue.
“There’s already a healthy and growing market, and quite a lot of installers have joined the sector over the last couple of years, so I think the capacity to deliver quite fast growth is there.”
Jason Howlett, chief executive of the Energy Storage Association, said that the roll out of battery storage to homes will be “fundamental to making everything work when we look at electrification of homes and renewable power”.
A battery allows a home to store energy from solar panels for use at a later time, helping a family to avoid drawing from the grid during expensive peak periods. Advocates say that adoption of rooftop solar and batteries will also boost the UK’s energy security because it reduces energy imports.
Howlett added: “The more embedded storage we get in homes and factories, the less impact and need we have for significant capital schemes on the grid. So if we store energy at the point of consumption and generate at the point of consumption, we avoid all sorts of future challenges.”
Industry keen for salary sacrifice scheme
A key ask from industry has been for the Government to allow people to pay for solar panels and batteries through tax-saving salary sacrifice schemes – something which was omitted from the recent call for evidence.
Frank Gordon, director of policy at the Renewable Energy Association, told The i Paper: “We would really like to see salary sacrifice included.
“We think it’s a real no-brainer. It has been really successful in the electric vehicles sector. It just removes that upfront cost and cuts a lot of costs and hassle for people.”
However, while the Government is interested in the idea and not ruling it out, there are no current plans for salary sacrifice, The i Paper understands.
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