In this answer
Short answer
Deposit and stage payment protection is a consumer code benefit that covers the money a household pays an installer before the work is finished. The headline rule is simple: cover reaches up to 25% of the contract value, to a maximum of £5,000, and any payment above 25% of the contract value made before completion is excluded1. The Renewable Energy Consumer Code puts the same ceiling in its top tips for householders, telling them never to pay more than 25% of the contract price up front and to check that it will be protected2.
That means the protection is not a general insurance against a bad installation. It is a specific safeguard against one event: the installer stopping trading before the installation is complete. If that happens, the scheme can arrange completion by another installer, or a refund subject to policy terms1. Any payments above 25% of the contract value, up to a maximum of £5,000, are excluded, so a household that pays more than that proportion up front carries the excess itself1.
The practical consequence is that the size of the deposit is a risk decision, not just a cash-flow one. The code rules treat 25 per cent as a ceiling rather than a target, and the published guidance from consumer bodies is consistent on the point. What follows sets out what the cover includes, why the threshold exists, how the £5,000 maximum works alongside stage payments, and what the options are when an installer asks for more.
What deposit protection covers: up to 25% of contract value
The HIES Deposit and Stage Payment Protection scheme covers up to 25% of the contract value, with a maximum of £5,0001. It funds deposit and stage payments if the installer stops trading before completing the installation, either by arranging completion through another installer or by refunding the household, subject to policy terms1. The scheme issues a Customer Registration Certificate and a Deposit and Stage Payment Protection Certificate, and the household needs a contract with the installer named on that certificate, with the installation registered with HIES by the accredited installer1.
The cover is arranged at scheme level rather than by the installer. HIES states that insurance policies are arranged through its FCA authorised insurance broker and are subject to terms and conditions4. That structure matters for independence: the protection does not rest on the installer's own balance sheet, though it does depend on the installer being a member of the scheme and on the paperwork being in place.
A separate route exists through the CPA, whose Deposit Protection Scheme is available to consumers using a CPA-accredited installer or CPA member contractor5. The Renewable Energy Consumer Code requires its members to protect the money paid to them in advance of an installation, including the deposit6, and its consumer code sets the deposit ceiling at 25 per cent of the contract price3.
Why payments above 25% are excluded
The 25 per cent threshold is a risk-sharing line. Below it, the household's exposure before any work is delivered is limited, and the scheme can underwrite that exposure at a workable cost. Above it, the household is effectively financing the installer's business, and the scheme declines to carry that risk. The HIES exclusion is explicit: any payments above 25% of the contract value, up to a maximum of £5,000, before completion of the installation are outside the cover1.
The code rules reinforce the same figure from the other direction. The Renewable Energy Consumer Code states that a deposit should not exceed 25 per cent under any circumstances, giving 15 per cent as an example of a reasonable level3. Its top tips tell householders never to pay more than 25% of the contract price up front and to check that it will be protected2. Citizens Advice advises that where a long job makes a deposit unavoidable, the aim should be to push it down as much as possible, and not to agree to more than 25%7. Its guidance for finding an energy efficiency installer repeats the same limit: do not agree to pay more than 25% up front8.
The CPA's general rule is framed slightly differently, at 25% or £7,500, whichever is the lesser, of the total job value upfront5. The two figures differ on the cash ceiling: HIES caps cover at £5,0001, while the CPA guidance names £7,5005. Both agree on the 25 per cent proportion.
"Never pay more than 25% of the contract price up front; check it will be protected"
Stage payments and the £5,000 maximum
The £5,000 figure is a cap on the cover, not a cap on what a household may pay, and it is not a cap on stage payments as such. The scheme covers up to 25% of the contract value to a maximum of £5,000, and excludes payments above 25% of the contract value before completion1. On a contract worth £20,000, 25 per cent is £5,000, so the two limits meet. On a larger contract, the percentage would allow more than £5,000 but the cash maximum holds the cover down.
Stage payments are treated differently from the deposit in the code rules. The Renewable Energy Consumer Code states that the deposit and any further advance payment, taken together, cannot exceed 60 per cent of the estimated overall costs3. That gives a household a second ceiling to check: even where the deposit is within 25 per cent, the total paid before completion should stay within 60 per cent of the estimated overall cost.
| Limit | Figure | What it applies to |
|---|---|---|
| Deposit ceiling | 25% of contract price3 | The deposit itself |
| Cover level | up to 25% of contract value1 | Protected amount |
| Maximum cover | £5,0001 | Protected amount |
| CPA general rule | 25% or £7,500, whichever is lesser5 | Total job value upfront |
For larger works, staged payment arrangements exist in other contexts. Electricity North West can arrange staged payments where a domestic connection offer is greater than £20,000 excluding VAT9, and Northern Ireland Networks' G98 process requires an installer to pay a 20% deposit to proceed with reinforcement works10. These are network connection processes rather than consumer deposit protection, but they show that staged structures are normal on large jobs.
How to protect yourself when an installer asks for more than 25%
The first check is the contract itself. The Renewable Energy Consumer Code requires members to protect money paid in advance of an installation, including the deposit6, and its consumer code sets the deposit ceiling at 25 per cent of the contract price3. A household can ask which code the installer belongs to and what protection the deposit carries before signing.
The second check is the payment method. Paying by credit card can bring statutory protection: where work costs between £100.01 and £30,000, a claim can be made under section 75, and this includes paying a deposit by credit card even where that deposit is less than £1007. That route is separate from deposit and stage payment protection and can cover a wider range of failures.
The third check is what happens after completion. Deposit protection operates before completion; once the installation is finished, other protections apply. An insurance-backed guarantee covers the event that an installer ceases to trade and cannot complete or rectify the installation11. A competent person scheme registered installer gives financial protection where non-compliant work is found and the installation company has gone out of business12. For battery storage, PAS 63100:2024 addresses protection against fire13.
Who provides the protection, and how independent it is
The protection is provided through consumer code schemes and their insurance arrangements, not by the installer. HIES issues a Customer Registration Certificate and a Deposit and Stage Payment Protection Certificate, and states that insurance policies are arranged through its FCA authorised insurance broker and are subject to terms and conditions1. The CPA operates a Deposit Protection Scheme for consumers using a CPA-accredited installer or CPA member contractor5.
Independence here means the cover does not depend on the installer's solvency, but it does depend on the installer's membership and on the household's paperwork. A claim requires the contract, all receipts for payments made, and any written guarantees1. The installation must be registered with HIES by the accredited installer, and the household must have a contract with the installer named on the certificate1.
The installer market itself is mixed. In a January 2026 survey, nearly half of solar panel buyers said they had used an independent solar panel installer, while 25% had used a larger solar panel company15. That spread matters for deposit risk: a smaller firm may be more exposed to cash-flow failure, while a larger firm may carry its own guarantees. The code protections apply according to membership, not size.
Where the cover stops
Deposit and stage payment protection is narrow by design. It responds to one event, the installer stopping trading before completion, and it covers only the protected portion of what has been paid1. It does not cover a deposit above 25 per cent of the contract value, and it does not cover payments above the £5,000 maximum1. It does not cover defective work after completion, which is the territory of insurance-backed guarantees11 and competent person scheme financial protection12.
There is also a VAT dimension to advance payments. When a payment is made and when a contract is entered into can determine which VAT treatment applies, which is a further reason to keep the payment schedule and the contract dates clear.
For a household, the independence question comes down to this: the deposit protection reduces dependence on the installer's continued trading, but it does not remove dependence on the scheme's membership rules, the insurance broker's terms, or the household's own record-keeping. The grid connection, the equipment warranty and the aftercare arrangements remain separate matters, each with its own protections and its own limits.
Sources15 cited
- Deposit & Stage Payment Protection, HIES, 2026-07-15
- Consumer top tips, Renewable Energy Consumer Code, 2026-09-19
- Consumer Code, Renewable Energy Consumer Code, 2026-07-01
- Homeowners, HIES, 2026-08-27
- Protecting your deposit, Consumer Protection Association, 2025-06-24
- Consumer leaflet, Renewable Energy Consumer Code, 2026-09-17
- Before you get building work done, Citizens Advice, 2026-09-20
- Find an installer for energy efficiency home improvements, Citizens Advice, 2025-04-04
- Connections FAQs, Electricity North West, 2026-09-20
- G98/NI application types, NIE Networks, 2026-09-20
- Consumer protection, EPVS, 2026-09-17
- Building work, replacements and repairs to your home, GOV.UK, 2014-11-03
- Electrical installations: protection against fire of battery energy storage systems for use in dwellings, BSI, 2024-03-20
- Loan standard terms and conditions, Green Homes Wales, Development Bank of Wales, 2026-09-17
- SolarEdge solar panels, Which?, 2026
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