How does the Warm Homes Loan spread the cost?
The Warm Homes Loan is a government-backed scheme that provides no- and low-interest loans to UK households for home energy improvements. It is designed to remove the single biggest barrier to going solar: the upfront cost.
What the scheme covers
The loan can fund solar panels up to £15,000 and a home battery up to £15,000. EV chargers and business premises are not covered.
Key features of the scheme:
- No upfront cost. You pay nothing at the point of installation.
- Low or zero interest. Some loans are interest-free; others carry rates up to 5% lower than a standard personal loan.
- Long repayment terms. Loans can run for up to 30 years, keeping monthly payments manageable.
- GOV.UK example. According to the GOV.UK factsheet, a £10,000 loan at 8% over 7 years works out at around £155 a month, and the scheme could save up to £285 a year on repayments compared with a loan available today.
The scheme is aimed at UK households. Homeowners still need to pass lender credit and affordability checks before any finance is approved.
How to apply
Using the loan with Djuka works like this: you request a free, written, itemised quote from Djuka, and that MCS-certified quote is what you take to a lender when you apply. The lender then carries out standard credit and affordability checks before approving the loan. If you would like Djuka to fit your system, choose a lender that accepts any MCS-certified installer, as some only work with their own partner installers. We are also working towards becoming a partner installer with participating lenders, so you will be able to arrange finance alongside your Djuka quote. We will update this page when that is in place. Your installer's MCS certification is a condition of the scheme, so the written quote is the essential first step.
For a broader look at solar costs and what to expect, see our guide to solar panel costs and grants.
How does 0% VAT lower the price?
Solar panels and home battery storage systems are currently zero-rated for VAT in the UK. That means no VAT is added to the cost of supply and installation, which represents a significant reduction in the total price of a solar system.
This relief is currently confirmed until 31 March 2027. After that date, the VAT treatment may change, so homeowners who want to benefit from the 0% rate should factor this deadline into their planning.
What 0% VAT applies to
The zero rate covers:
- Solar photovoltaic (PV) panels
- Home battery storage systems (such as the Tesla Powerwall 3, Fox ESS, and EcoFlow units fitted by Djuka Electrics)
- The associated installation labour
EV chargers are not included in this relief.
Why this matters alongside the Warm Homes Loan
The 0% VAT rate reduces the total amount you need to borrow. A lower loan amount means lower monthly repayments and less interest paid over the life of the loan. The two schemes therefore compound each other: VAT relief brings the headline price down, and the Warm Homes Loan then finances that lower figure at a below-market interest rate.
There is no separate application. Your installer applies the zero rate to qualifying work, and it is shown on your written quote.
How does the Smart Export Guarantee pay you?
Once your solar panels are generating electricity, you will rarely use every unit your system produces, particularly on long summer days. The Smart Export Guarantee (SEG) is the mechanism that ensures you are paid for the surplus.
Under the SEG, energy suppliers are required to offer tariffs to households that export solar electricity to the grid. The rate you receive varies between suppliers and between tariff products, so it is worth comparing offers once your system is installed and registered.
The MCS certification requirement
This is where the SEG connects directly to the other two schemes. To be eligible for SEG payments, your installation must be certified under the Microgeneration Certification Scheme. An MCS-certified installer issues a certificate at the point of installation, and that certificate is what your energy supplier requires before they will set up your export tariff.
That does not mean MCS is a VAT condition. It is the installer certification needed for the loan and the export tariff, while the VAT relief sits separately in the tax rules for qualifying energy-saving products.
How a battery fits in
A home battery does not generate electricity, but it changes how much of your solar generation you export. By storing surplus power during the day and using it in the evening, a battery reduces the amount you draw from the grid at peak times. The electricity you do eventually export still qualifies for SEG payments. The battery and the SEG therefore work alongside each other rather than against each other: the battery maximises self-consumption first, and the SEG pays for whatever is left over.
Key point: SEG rates vary by supplier and are not guaranteed in advance. Compare tariffs from your energy supplier once your MCS certificate has been issued.
How do the three schemes work together?
Taken separately, each scheme addresses one part of the solar equation. Together, they address all three.
| Scheme | What it does | MCS required? |
|---|---|---|
| Warm Homes Loan | Finances the installation with no- or low-interest borrowing | Yes |
| 0% VAT | Removes VAT from the purchase and installation price | No (a tax rule, applied on your quote) |
| Smart Export Guarantee | Pays you for surplus electricity exported to the grid | Yes (certificate needed) |
The practical sequence looks like this:
- Step 1: Get a written MCS quote. This shows the 0% VAT price and confirms the installer is MCS-certified, which the lender needs for your Warm Homes Loan application.
- Step 2: Apply for the Warm Homes Loan. Take your Djuka quote to a participating lender. If you would like Djuka to fit your system, choose a lender that accepts any MCS-certified installer, as some only work with their own partner installers. The lender runs affordability checks and, if approved, funds the installation.
- Step 3: Installation takes place. Your MCS-certified installer fits the panels and any battery. The 0% VAT rate is already reflected in the price you pay.
- Step 4: Receive your MCS certificate. Your installer issues this at completion. You will need it for the next step.
- Step 5: Register for the Smart Export Guarantee. Contact your energy supplier with your MCS certificate and meter details to set up your export tariff.
The result is a system that costs less than it would have without VAT relief, is financed at a below-market rate, and generates an ongoing income stream from exported power.