Skip to content

Grants & funding

Renewable energy funding in Scotland, in plain language.

Nine schemes between them cover almost every renewable install in Scotland. Below: what each one is, who it's for, how much it's worth, and what we provide for your application. Updated as the rules change.

Up to £9,000

Home Energy Scotland heat pump grant — £7,500 + £1,500 rural uplift

Up to £7,500

Interest-free Home Energy Scotland loan on top of the grant

0% VAT

On solar, batteries, heat pumps and domestic AC until 31 March 2027

Paid to export

Smart Export Guarantee — your supplier pays for surplus solar

Hear it explained

The up-to-£9,000 heat pump grant, in two minutes.

Lachlan on the Home Energy Scotland grant — who qualifies, what the rural uplift adds, and how the application actually works.

Jump to

Home Energy Scotland Grant Home Energy Scotland Loan Smart Export Guarantee (SEG) Zero VAT until April 2027 Warm Homes Loan Scheme (from September 2026) CARES (Community and Renewable Energy Scheme) SME Loan + Cashback Business Energy Scotland Public Sector Energy Efficiency Loans

Domestic

For homeowners and private landlords.

Home Energy Scotland Grant

Cashback grant · Domestic

Up to £9,000 (£7,500 + £1,500 rural uplift)

The Scottish Government's cashback grant for low-carbon heating — up to £7,500 for an MCS-certified air source or ground source heat pump install, with an additional £1,500 rural uplift where the property qualifies. Administered by Home Energy Scotland on behalf of Scottish Government. Paid as cashback after the install is verified, and routinely combined with the Home Energy Scotland interest-free loan to fund the balance.

Eligibility

  • Property must be in Scotland
  • You must own the property (or be a private landlord with tenant consent)
  • The install must be MCS-certified
  • A Home Energy Scotland adviser confirms eligibility before application

What we provide

You apply to Home Energy Scotland directly yourself. We provide all the technical documents your application needs — quote, MCS certificate, heat loss data, expected savings.

Home Energy Scotland Loan

Interest-free loan · Domestic

Up to £7,500

A Scottish Government-funded interest-free loan on top of the grant, covering clean heating systems (heat pumps, and automated pellet biomass where a heat pump is shown to be unsuitable) and energy-efficiency measures such as insulation. Repaid interest-free over a number of years — the exact term depends on how much you borrow, and Home Energy Scotland confirm it when your application is approved. Most commonly used alongside the Home Energy Scotland grant to fund the balance on a heat pump install — up to £16,500 of combined support for a rural home. Note: Home Energy Scotland stopped funding standalone solar panels and batteries in June 2024 (0% VAT and the Smart Export Guarantee still apply — see below).

Eligibility

  • Property must be in Scotland
  • Loan amount and term depend on technology and property type
  • You must be the homeowner (or a private landlord)
  • A Home Energy Scotland adviser will confirm eligibility before application

What we provide

You apply directly to Home Energy Scotland. We refer you to them for the eligibility conversation and provide the technical documents your application needs (quotes, MCS certificates, heat loss data).

Smart Export Guarantee (SEG)

Income · Domestic

Set by your supplier

Your energy supplier pays you for surplus electricity exported to the grid. Each supplier sets their own rate — standard fixed export tariffs currently pay around 12p/kWh, while the best smart tariffs pay 15p+ (with peak-window rates approaching 30p/kWh on some plans). You sign up for the SEG with your electricity supplier; we register the installation on the MCS database and give you the MCS certificate they require.

Eligibility

  • MCS-certified solar PV (or wind, micro-CHP, anaerobic digestion, hydro)
  • Smart meter required
  • Any licensed electricity supplier in Great Britain is required to offer at least one SEG tariff

What we provide

You sign up for the SEG with your electricity supplier. We register the installation on the MCS database and give you the MCS certificate they need. Rate is set by your supplier.

Zero VAT until April 2027

Tax relief · Domestic

20% saving

The UK government has reduced VAT on qualifying energy-saving materials and their professional installation to 0% until 31 March 2027 (after which the rate reverts to 5% unless the relief is extended). Qualifying technologies include solar PV, batteries (including standalone), heat pumps, insulation, and domestic split air conditioning. Portable units, cooling-only units, and equipment-only purchases without installation don't qualify. The discount is applied at point of sale — no claim required.

Eligibility

  • Installation must be in a residential property in the UK (homes, flats, care homes, student accommodation — not hotels, hospitals, or commercial buildings)
  • Must be supplied AND installed by a professional installer — equipment-only purchases stay at standard VAT
  • Must be one of the qualifying energy-saving technologies
  • Both the materials and the labour for installation are zero-rated

What we provide

Applied automatically on our quote. You see the saving on the invoice. Commercial installs don't qualify and are charged at standard VAT.

Warm Homes Loan Scheme (from September 2026)

Low-interest loan · UK Government · Domestic

Cheaper borrowing

A new UK Government scheme launching to the public in September 2026. Rather than a grant paid to you, the government pays lenders a contribution of up to 20% of the loan, which is used to cut the interest rate you pay on finance for low-carbon upgrades — heat pumps, solar PV and batteries, including ancillary works like radiator, pipework and cylinder upgrades. Open to homeowners and private landlords. How it combines with Home Energy Scotland support is still being finalised — we'll keep this page updated as the rules land.

Eligibility

  • Homeowners and private landlords
  • Loans for low-carbon upgrades: heat pumps, solar PV, battery storage and associated works
  • Delivered through participating lenders, not a government application
  • Public launch expected September 2026 — details may change before then

What we provide

You arrange the loan with a participating lender. We provide the quote and technical documents the lender needs, and confirm at the time how it can be combined with Home Energy Scotland funding.

Commercial & community

For businesses, charities, community groups and the public sector.

CARES (Community and Renewable Energy Scheme)

Grant + development loan · Community

Project-dependent

Capital grants and development loans from Scottish Government for community-led renewable energy projects. Administered by Local Energy Scotland on behalf of Scottish Government. Strong fit for charities, community groups, halls, churches and other faith buildings.

Eligibility

  • Project must be community-led with a defined community benefit
  • Constituted community organisations (charities, SCIOs, community trusts, etc.)
  • Project must be in Scotland
  • Various funds within CARES cover scoping, development, and capital phases

What we provide

Your organisation completes and submits the application. We provide the technical evidence it asks for — system specifications, energy modelling, expected savings, and supporting documentation.

SME Loan + Cashback

Interest-free loan + grant · SMEs

Loan: up to £100,000; Cashback grant: up to £30,000

Scottish Government's energy efficiency loan + cashback scheme for small and medium businesses. The interest-free loan covers the install; the cashback grant (an outright contribution, not a loan) covers up to a third or so depending on the project type.

Eligibility

  • Scottish SMEs (under 250 employees, turnover under €50m / balance sheet under €43m)
  • Project must be in Scotland
  • Eligible technologies: low-carbon heat, on-site generation, battery storage, lighting, fabric
  • Cashback is paid after install is completed and verified

What we provide

We provide the quote, technical specification, expected savings calculation, and any supporting documentation Business Energy Scotland needs.

Business Energy Scotland

Advice + audit + signposting · SMEs · community

Free

Free advisory service from Energy Saving Trust on behalf of Scottish Government. Independent energy audits, business case support, and a route through to whichever funding scheme actually fits. Usually the right place to start before committing to a specific direction — particularly if you're weighing multiple options.

Eligibility

  • Any Scottish business or third-sector organisation
  • No minimum or maximum project size

What we provide

We're happy to work with BES advisers and provide quotes/technical data into their audits. We often suggest customers start here.

Public Sector Energy Efficiency Loans

Interest-free loan · Public sector

Project-dependent

Interest-free loans for public sector organisations undertaking decarbonisation work. Covers councils, schools, NHS sites, and other public bodies. Used for fabric upgrades, low-carbon heat, on-site generation and storage.

Eligibility

  • Scottish public-sector body (or a partner organisation delivering on their behalf)
  • Project must demonstrate carbon savings
  • Various loan terms depending on project type

What we provide

We work alongside in-house estates teams and existing framework contractors. We integrate into CDM and procurement frameworks as needed.

Worked examples

What this actually looks like.

Three illustrative examples to give a sense of how schemes stack. Figures are ranges — your actual numbers depend on your specific situation and we'll always do a free survey before quoting.

Highland family upgrading from oil to a heat pump

A typical Highland four-bedroom property currently on oil might face an install cost of £14,000–£18,000 for an air source heat pump system. With the Home Energy Scotland cashback grant (up to £9,000 where the rural uplift applies — £7,500 plus £1,500, covering most remote and rural Scottish postcodes and all the islands) and an interest-free Home Energy Scotland loan towards the balance, the homeowner typically faces little or no upfront cost and monthly loan repayments that are often lower than the displaced oil spend. Numbers are illustrative — your actual figures depend on heat loss, system size and any required radiator upgrades.

Rural community hall going solar

A community hall installing 12 kWp of solar PV might see a project cost in the £18,000–£24,000 range. Via CARES, a meaningful portion of that can be grant-funded outright, with the balance covered by a development loan repaid from the savings on electricity bills. We've provided the technical documentation for similar CARES applications for clients across Scotland.

Small Highland SME installing battery storage

A small business installing 20 kWh of battery storage to pair with existing solar might invest £15,000–£20,000. Via the SME Loan + Cashback scheme, a portion is paid as a cashback grant (typically up to £30,000 across qualifying upgrades) and the balance funded by interest-free loan. Payback through smart-tariff arbitrage and self-consumption is typically 5–8 years.

Frequently asked

Funding questions, answered honestly.

Do I have to apply for these myself?

For the Home Energy Scotland grant and loan, yes — you apply to Home Energy Scotland directly yourself. It is a short process: you have one conversation with a Home Energy Scotland adviser to confirm eligibility, then complete their application. What we do is provide all the technical documents your application needs — quote, MCS certificate, heat loss data, expected savings — so it is straightforward. For commercial schemes (CARES, SME Loan + Cashback) it is the same principle: your organisation completes and submits the application, and we supply the technical evidence it asks for. Public sector loans usually involve your existing estates and procurement teams.

What if I'm not eligible for the main grant?

There are still routes worth checking. The Home Energy Scotland loan also covers energy-efficiency measures such as insulation even where the heating grant does not apply. For solar and batteries there is no Home Energy Scotland funding any more (that loan was withdrawn in June 2024) — but 0% VAT until March 2027 and the Smart Export Guarantee's ongoing export income together do a similar job of improving the numbers. The starting point is a free survey — we will tell you honestly which routes apply.

How long do applications take?

Home Energy Scotland grant and loan: typically 4–8 weeks from application to confirmation of funding, then cashback paid after the install is verified. CARES, SME Loan + Cashback: typically 6–16 weeks for a full application cycle. Public sector loans: variable depending on the body and project size.

Are these schemes likely to change?

Yes — they evolve regularly. The Home Energy Scotland grant amounts have been adjusted as the scheme has matured. SEG tariffs change with the market. Zero-VAT is currently set to expire in April 2027 (likely to be reviewed). Scottish Government schemes are reviewed in line with the parliamentary funding cycle. We update this page when the rules change; check back or get in touch for the current detail.

Next step

Talk to us about your project.

Phone is usually fastest — you'll get straight through to our Inverness office, Monday to Friday, 09:00 to 17:00, not a call centre. Or send a written enquiry and we'll reply within one working day.

Call 01463 231 423 Send an enquiry →
Call us