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Created on October 2, 2023

Updated on February 19, 2024

Reading Time: 8 minutes

The Complete Guide to the Home Energy Scotland Grant and Loan

Looking to reduce your energy expenses and contribute to environmental conservation simultaneously? Here’s some positive news: a government initiative facilitates precisely that.

Established by Warmer Homes Scotland in 2017, the Home Energy Scotland Grant and Loan has provided financial support to numerous households, enabling them to cover the initial expenses of solar panels and other sustainable systems.

In this comprehensive handbook, we will furnish you with all the essential details regarding this program, encompassing the borrowing limits, repayment durations, and the range of enhancements it encompasses.

If the Home Energy Scotland Grant and Loan has rendered the idea of purchasing solar panels even more appealing, you can complete this form to obtain complimentary quotes from reliable suppliers.

home energy loan scotland

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What is the Home Energy Scotland Grant and Loan?

The Home Energy Scotland Grant and Loan represents a government initiative providing grants of up to £7,500 and interest-free loans of up to £38,500 to homeowners aiming to enhance the energy efficiency of their residences.

This scheme has been notably beneficial amidst the current energy crisis, particularly given that Scotland has witnessed some of the highest energy costs in the UK.

How does the interest-free loan work?

You have the option to apply for loans in two categories. First, you can obtain up to £15,000 for implementing energy-efficient enhancements.

Additionally, you can secure up to £17,500 for two renewable systems or connections to an approved renewable district heating system, along with as much as £6,000 for an energy storage system – which is encompassed within the renewable system category.

These loans can be repaid over a maximum of 12 years, and there may be provisions that alleviate the need to repay the entire amount.

Cashback funding may cover up to 40% of the cost of your energy-efficient improvements or the entire loan amount for them – whichever is lower.

For renewable systems, this cashback can reach up to 75%.

This essentially acts as a reward for choosing an exceptionally eco-friendly measure, converting a portion of your interest-free loan into a grant, with no obligations attached.

It’s important to note that there is a limited allocation of government funds for cashback funding, so it’s advisable to apply while the funds are still available. Cashback funding and loans are distributed on a first-come, first-served basis.

Furthermore, there is an administrative fee of 1.5% – up to a maximum of £150 – for each successful loan application, which appears to be a reasonable cost considering the benefits.

How does the grant work?

Homeowners can also receive a grant through the scheme to assist with the installation of various energy efficiency enhancements.

The grant can encompass up to 75% of the total cost of the improvements, up to a maximum grant amount of £7,500, or £9,000 if the household qualifies for the rural uplift.

However, the grant does not cover the following installations:

  • Replacement heat pumps
  • Wind or hydro turbines
  • Warm air units
  • Solar water heating systems
  • Double or secondary glazing
  • Insulated doors
  • Heat network connections

The government website notes that solar PV systems, energy storage systems, biomass boilers/stoves, and high-heat-retention storage heaters might be eligible for grant funding ‘if certain conditions are met’.

It’s important to note that the Home Energy Scotland Grant and Loan is not available to individuals receiving grant support from another source for the same improvement, such as Area Based Schemes or ECO.

How long do you have to repay the loan?

You have some flexibility in determining the repayment period.

For loans exceeding £10,000, you can take up to 12 years to repay, while the repayment period shortens to five or 10 years if you borrow less.

Loan amountMaximum repayment time
Less than £5,0005 years
£5,000–£9,99910 years
More than £10,00012 years

What does the Home Energy Scotland Grant and Loan cover?

The Home Energy Scotland Grant and Loan encompasses a diverse range of energy-efficient enhancements and renewable systems, as well as a few secondary improvements.

Here are all the available options, along with the maximum loan and cashback funding available for each.

Energy-efficient improvements

You have the option to apply for any of the following enhancements, up to a maximum loan of £15,000.

You may be eligible to receive 40% of that loan as cashback, which means you will not have to repay it. However, the availability of the grant depends on the specific home improvement you choose. Additionally, for the eligible improvements, you can supplement the grant with an additional loan if needed.

ImprovementMaximum loanMaximum cashbackMaximum grant options
Solid wall insulation£6,000£4,000£7,500, plus £2,500 optional loan
Gas heating system£5,000NoneNo grant available
Gas connection£5,000NoneNo grant available
Warm air unit or electric storage heaters£4,600£400£2,500 when installed as part of a package of measures
Insulated doors£4,500NoneNo grant available
Replacing single glazing with double glazing£4,100£400No grant available
Flat roof or room-in-roof insulation£2,400£1,600£3,000, plus £1,000 optional loan
Loft, floor, or cavity wall insulation£600£400£1,500, plus £500 optional loan

Secondary improvements

You have the option to apply for an additional loan of up to £500, which may include up to £200 in cashback funding or a grant of up to £375, specifically for secondary enhancements.

These secondary improvements must be combined with a specific energy-efficient improvement listed previously, and may include heating controls, hot water jackets, and cylinder thermostats.

Renewable systems

You are also eligible to apply for loans to cover a maximum of two renewable systems, up to the limit of £17,500, as well as an energy storage system such as a solar battery or thermal energy store, which comes with an additional loan of up to £6,000.

It is possible to receive as much as £11,750 of these loans as cashback, depending on the specific systems you choose to have installed.

Additionally, if you are interested in heat pumps or biomass boilers, you might qualify for a grant to assist with the initial costs.

Renewable systemMaximum loanMaximum cashbackMaximum grant options
Hybrid PV-solar water & heating systems£7,500NoneNo grant available
Heat pumps (air, ground, water, or hybrid)£2,500£7,500£7,500, plus £7,500 optional loan – or £9,000, plus £7,500 optional loan, if the household qualifies for the rural uplift
Biomass boilers or stoves£2,500£7,500£7,500 if there’s evidence that a heat pump is unsuitable for the property – or £9,000 if the household qualifies for the rural uplift
Wind turbines£2,500NoneNo grant available
Hydro turbines£2,500NoneNo grant available
Solar water heating systems£1,250£3,750No grant available
Connections to a renewable district heating network£1,250£3,750No grant available
Heat meter (if installed with a heat pump)None£500No grant available

Want to know more about heat pumps? Check out our guide to air source heat pumps in Scotland.

Who’s eligible for the Home Energy Scotland Grant and Loan?

If you are the owner of the property you reside in, you are qualified to seek the Home Energy Scotland Grant and Loan.

In the event that you are constructing your own residence, you can request a loan for renewable systems, but not for energy-efficient enhancements.

It is important to ensure that you include planning permission documents with your application, and provide your title deeds when submitting your claim.

As a business owner, landlord, property developer, or renter, you are not eligible to apply for the Home Energy Scotland Grant and Loan.

Furthermore, it is important to note that homeowners are only eligible for the grant if they reside in Scotland, regardless of whether they have solar panels in EdinburghGlasgow, or the Highlands.

How can you apply?

Ensure that you obtain a Home Energy Scotland Grant and Loan prior to commencing your home improvements, as applications cannot be submitted once the work has commenced.

The initial step involves contacting Home Energy Scotland at 0808 808 2282. Alternatively, you can request a call back or ask to receive an email.

An advisor will guide you through the available options and assist you in determining the most suitable choices for your needs. They may also arrange for a specialist to visit your home and discuss your application in more detail.

When you are prepared, your Home Energy Scotland advisor will grant you access to the online application form. As part of completing this application, you will need to obtain a quote from an installer.

Depending on the specifics of your application, you will need to meet the following criteria:

  • For energy-efficient improvements, they must be recommended in your property’s Energy Performance Certificate (EPC).
  • For renewable systems, with or without energy-efficient improvements, they must all be recommended in your property’s EPC, or in your Home Energy Scotland specialist’s report.
  • For an energy storage system, it must be recommended in your specialist’s report.
  • If you are solely applying for gas connections and a gas boiler, then you do not require any type of energy report.

Regardless of the measures you apply for, you will need to undergo a credit score check.

How long will the Home Energy Scotland Grant and Loan be available?

The Home Energy Scotland Grant and Loan is set to continue indefinitely, with the government pledging to finance the cashback component of the program at least until 2023.

The existing cashback rate is notably generous, making it advisable for you to capitalize on this opportunity.

Previously, prior to December 2020, the cashback offered for home improvements was 25% rather than 40%, and no cashback was available for renewable systems.

This indicates that by applying for the Home Energy Scotland Grant and Loan now, you could potentially save up to £14,000, as opposed to waiting for these cashback incentives to expire.

Has the Home Energy Scotland Grant and Loan been a success?

The Home Energy Scotland Grant and Loan has achieved significant success, both in terms of financial impact and environmental benefits.

Launched in May 2017 with an initial funding of £30 million, the program has yielded substantial results. Customers who sought advice through the service in the past year are projected to save around £30.6 million over their lifetimes, along with reducing 71,300 tonnes of CO2 emissions, as reported by the Energy Saving Trust (EST), which oversees the administration of the loans.

During the period from 1 April 2019 to 31 March 2020, which marked the first period when specific statistics were recorded for this initiative, the loans facilitated 1,008 households in implementing 1,207 measures. Subsequently, despite the challenges posed by a global pandemic, the following 12 months witnessed an increase in installations, with 1,221 households supported to install 1,247 renewable measures, according to the EST.

The number of heat pump installations funded by the scheme surged from 586 in 2019/20 to 762 systems in 2020/21, marking a notable 30% increase. Feedback from recipients of Home Energy Scotland loans during 2020/21 revealed that 56% of these 1,247 improvements may not have been pursued if they had not received the loan. Furthermore, homeowners reported that 89% of the improvements took place at least partly due to the loan.


The Home Energy Scotland Grant and Loan program has assisted over 2,200 households in concurrently reducing their energy expenses and carbon emissions.

Moreover, with the current heightened cashback rates, there is potential to achieve even greater cost savings than usual – up to a substantial £17,750 if the maximum loan amount is obtained.

The cashback offered for insulation, solar water heating, heat pumps, biomass boilers, and connections to a renewable district heating system is notably generous at present, presenting an opportune moment to take advantage of these benefits.

If you are interested in obtaining an estimate of the cost of installing solar panels for your residence, you can simply complete this form to receive complimentary quotes from our reputable suppliers.

Get FREE Renewable Quotes
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Complete A Short Form – Receive Free Quotes – Compare & Save

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