Saving money on your energy bill is hard if you don’t have much to pay for green energy upgrades. Unfortunately, Home Energy Scotland (HES) has just made it even harder.

Although installing solar panels on your home is far cheaper than it once was, it still needs a significant upfront investment. But it pays for itself soon enough by slashing energy bills, while contributing to Scotland’s decarbonisation goals. To bust any misconceptions you may have, yes, solar panels work perfectly well here, even on the dreichest day.

That’s why, with a just transition in mind, the Scottish Government made interest-free loans for solar available via the HES scheme. Well, until they were suddenly unavailable.

A year ago, HES (run by Energy Saving Trust Scotland) withdrew stand-alone loans for solar energy systems on homes, without warning. Since then, they have been available only when installed after, or alongside, a heat pump or storage heaters.

Of course, pairing heat pumps and solar panels is a great combination, especially with battery storage: combining free power from the sun, with free heat from the air or the ground. You also can’t run out of fuel – unlike oil, LPG, bottled gas or firewood. Up to £11,500 was available in grants and interest-free loans to put the three technologies together.

“Restricting access to a key decarbonisation technology flies in the face of meeting net zero by 2045 and directly contradicts the Scottish Government’s recognition of the role of solar in decarbonising our energy system,” said Solar Energy Scotland, at the time.

So the sudden announcement that HES would no longer support interest free loans for solar panels or energy storage at all from 6 June 2024 onwards came as another unwanted surprise.

Last year 25,875 small-scale rooftop solar installations were installed in Scotland, more than ever beforeLast year 25,875 small-scale rooftop solar installations were installed in Scotland, more than ever before (Image: free)

The change was made to, “ensure that the scheme stays within its budget, while focusing funding on improvements that will maximise the decarbonisation of heating and the reduction of heat demand in homes”, HES argued.

But without solar, heat pumps can be more expensive to run. So I would say HES’ decision is socially regressive. Decisions appear to based on having an annual budget for loans that does not consider their repayment. This seems decidedly odd and not very strategic, nor supporting the conditions for industry investment in jobs and skills.

Some solar funding does remain available for the worst-off in society, via local authorities and the UK-wide Warmer Homes Fund. But these have low uptake and are very focused, so won’t achieve much volume.

The latest move disregards the ongoing cost-of-living crisis by restricting access to one of the most effective ways to reduce household energy bills. Without ongoing HES support for solar - as part of a low carbon heating system - those who are least able to pay their heating and electricity bills will continue to pay more than they need to and, in some cases, still have to choose between heating and eating. This decision will slow solar deployment, slow decarbonisation and tend to restrict everyone but the better-off from enjoying the benefits of solar power.

Some solar companies are now offering finance deals, which is of course to be welcomed. But they still won’t offer the sort of deal that HES offered.

The idea that business craves policy certainty seems to be a forgotten concept these days. From my perspective, as vice-chair of trade body Solar Energy Scotland, this month’s withdrawal was a set-back for my industry. This was especially so after the effectively mandatory installation of solar panels on new homes ended, again in favour of running heat pumps from the electricity grid.

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That decision ignored two key points: firstly, that our power network is already stressed, operating at capacity in many areas across the country. A key benefit of solar is its ability to take pressure off the grid network – therefore benefiting households and the grid operators at the same time. Secondly, the assumption that Scotland’s electricity supplies are already decarbonised looks decidedly shaky, considering the expected increase in the demand for domestic electricity as we move towards electric cars, electric hobs and electric space heating.

Dipping a toe into politics, the withdrawal looks even more unwise given John Swinney’s initial speech as First Minister, where he pledged to work to “eradicate child poverty, build the economy, support jobs, address the cost-of-living crisis, improve the health service and tackle the climate crisis”. Offering interest-free solar loans ticks the box on all these objectives.

What’s more, our demand for solar power has never been greater. Last year 25,875 small-scale rooftop solar installations were installed in Scotland, more than ever before and one in seven across the UK.

Everyone wants to see vast increases in residential solar power. Its popularity should be welcomed, and loan schemes should be managed for the longer term given that ultimately the cost to government will only be the interest, not the loan. Annual short-term budgets do not match the level of demand for long term stability. There must be a better way, particularly after warm words on solar from across the political spectrum.

Josh King is vice-chair of Solar Energy Scotland