A Scottish Renewables expert has criticised the abrupt pulling of solar panel funding from the Scottish Government’s home energy grants and loans scheme.

The withdrawal, said Helen Melone, head of heat and solar at Scottish Renewables, could mean that homeowners fitting heat pumps could be more vulnerable to high energy bills. "Our concern,” she said, “is that this impacts on the ability of households to mitigate their own energy bills. It’s concern over affordability for households.”

“This will impact the people who would want to put solar panels on their roof as a way to stop themselves being hit by big, sudden price shocks as happened recently with energy bills went very high."

Energy Saving Trust Scotland last week pulled both battery and solar panel funding from the government-funded Home Energy Scotland (HES) Grants and Loan Scheme.

It said: “Funding for solar PV and energy storage systems (electricity and heat batteries) will no longer be offered through the scheme. From today (6 June 2024), no new customers will be able to apply for solar PV and battery storage, even when installed together with a heat pump.”

Previously Home Energy Scotland was offering up to £11,500 in grants, plus interest-free loans, covering air source heat pump, solar installation and battery. But as of last week, funding for solar and battery installations ceased.

This solar panel and battery combination, alongside an air-source heat pump, is seen by many heat pump owners, as a key accessory in bringing their electricity bills down. In the Herald’s recent heat pump series, many homeowners had teamed the three technologies to make their bills affordable, or even cheaper than their former gas bills.

Neil Kitching, author of the blog Carbon Choices, for instance, said of his heat pump installation: “It’s only by having the solar and the battery and charging it overnight that my costs are going down."

Neil Kitching outside his home which has both heat pump and solar panelsNeil Kitching outside his home which has both heat pump and solar panels

For low and middle-earners that combination will no longer be so affordable. Ms Melone said: “There is quite a lot of money in the Scottish Government’s fuel poverty schemes, for things like energy efficiency, insulation, heat pumps, putting in gas boilers if that it what’s needed to get people out of fuel poverty. But this is going to hit the people that can afford to pay something, but are not massively well off.

"Solar panels can provide independence from energy prices - they allow people to be in control a bit more. "

Ms Melone also expressed concern over how this will impact on home decarbonisation progress in Scotland. “We are trying to decarbonise,” she said, “and anything that cuts funding for low carbon alternatives impacts that.”

Prior to 2023, solar panels were funded, in their own right, through the Home Energy Scotland scheme – but in August 2023, the Scottish Government limited solar funding to homes with renewable heating systems.

Small-scale solar installations hit record highs in Scotland last year, increasing by 174% on 2020, according to the Microgeneration Certification Scheme. Nearly 26,000 solar panels were installed in a single year.

But, with this new discontinuation of funding, not only homeowners will be affected; the solar PV installation industry will too.

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“This will have effects on the solar supply chain,” she said. “It will impact businesses in Scotland. Installers are very busy just now because of funding. They are having masses of installations. They are run off their feet. The waiting list for solar is huge. But the companies are probably going to run out of business at some point and there won’t be anything to replace it with in the future."

The Home Upgrade grant in England continues to cover solar. 

A Scottish Government spokesperson said: “The government's commitment to ending Scotland’s contribution to global emissions as soon as possible, and by 2045 at the latest, is unwavering. With emissions in Scotland already nearly cut in half, we are well positioned to continue leading on climate action that is fair, ambitious and capable of rising to the emergency before us.

“We recognise that solar power has an important role to play in decarbonising our energy supply and supporting a just transition to net zero. However, we cannot meet our climate targets without ending the use of polluting heating systems in our buildings and moving to clean heat alternatives.

“We are seeing sustained demand from households seeking to decarbonise heat in their homes. Last year the Scheme supported people to install more than 2000 heat pumps - a 17% increase compared to the same period the previous year – and more than 1500 energy efficiency measures.

“Given finite resources, we are now therefore prioritising our support through the Scheme on the installation of these measures, which will maximise the decarbonisation of a home’s heating and reduce heat demand, and which would be less likely to happen without government support.

“Based on the latest forecasts, our capital block grant is being reduced and is now expected to be cut in real terms by nearly 9% over 5 years – a cumulative loss of over £1.3 billion. Alongside the real terms cuts to our capital funding, our FT allocation has also been cut significantly, with a reduction of around £290 million – or 62% in 2024/25 when compared to 2022/23 - adding to the significant challenge we already face.”