The change took effect from Tuesday 27 June 20231. The scheme is managed on behalf of the Scottish Government by the Energy Saving Trust3.
Under the new rules, Home Energy Scotland loans will "only be available as part of a package together with a heat pump or high heat retention storage heaters. As a result, applications for solar PV and/or energy storage systems only will no longer be eligible"3. The scheme's own explanation for the change was that it "is necessary to ensure that the scheme stays within its allocated budget and that available funding is targeted at installations which will maximise decarbonisation of heat or reduce heat demand"3. A separate account states that Home Energy Scotland says its goal is to use its limited funding budget more effectively, targeting measures that produce the most heat or reduce heat demand with the least carbon emissions, and notes it is unclear why solar panels and energy storage were specifically singled out2.
The withdrawal was not accompanied by a press release and was not subject to prior warning, and no consultation or grace period was offered3. Solar Energy Scotland, the trade body, said it was "both shocked and puzzled by this extraordinary and regressive move, which needs urgent clarification"3. Gemma Grimes, Solar Energy UK's Director of Policy and Delivery, called it "an entirely unexpected and inexplicable move"3.
Applications accepted before 27 June 2023 are not affected; the change applies to anyone who had not already applied2. The wider scheme remains open to homeowners in Scotland, with amounts potentially higher for those in rural areas2. Before the change, funding could be sought for a range of measures including biomass boilers, electric heating, energy storage, heat pumps, high heat retention storage heaters, insulation, solar panels, window glazing and wind or hydro turbines2. The loan for battery storage systems was previously up to £6,000, alongside grants of up to £7,500 for a heat pump and up to £7,500 towards other eligible efficiency improvements, rising to £9,000 with a rural uplift worth £1,500 per household1. Solar installations were already excluded from that £7,500 grant for other improvements1.
"This change is necessary to ensure that the scheme stays within its allocated budget and that available funding is targeted at installations which will maximise decarbonisation of heat or reduce heat demand"
Why it matters for households
For a household in Scotland considering solar panels or a battery on their own, the interest-free loan route through the Home Energy Scotland Grant and Loan Scheme is no longer available. The practical effect is that solar and storage now have to be installed alongside a heat pump or high heat retention storage heaters to attract that funding, which ties the decision to a heating upgrade rather than a standalone electricity-generating or storage measure. For a home weighing the order in which to make improvements, that changes the arithmetic: see solar panels, a battery or a heat pump: which should you get first?. Households that had already applied and been accepted before 27 June 2023 keep their funding2. The trade body's objection is that restricting access to solar slows deployment and limits the benefits of solar power to wealthier households3. No figures have been reported for how many applications were affected or how much budget the change releases.
What happens next
Solar Energy Scotland said it would meet the Energy Saving Trust, other trade associations and MSPs the following week to discuss the way ahead, and was seeking an urgent meeting with Scottish Government officials3. No outcome of those meetings has been reported. Business Energy Scotland was still offering similar loans to small and medium-sized enterprises, but was not accepting new applications at the time "due to the very high number of applications"3.