The New Economics Foundation has proposed a solar panel scheme that would cover 8 million UK households, roughly one in three homes, with no upfront cost. The plan, if adopted, could cut a typical household’s electricity bill by £400 a year and lift an EPC rating from band D to band B in a single installation.
As reported by the New Economics Foundation, the proposal targets households in EPC bands D through G, the least efficient homes, and prioritises those on low incomes or in social housing. The foundation calculates the cost at £6 billion over five years, funded by a small levy on energy suppliers, similar to the existing Energy Company Obligation (ECO) programme.
Who qualifies, and who doesn’t
The scheme would cover owner-occupiers, private tenants, and social housing residents, provided their home has a roof suitable for solar panels. The NEF estimates 8 million homes meet the criteria, but the actual number depends on roof orientation, shading, and structural condition. Homes with north-facing roofs or listed building status may be excluded.
For private tenants, the landlord would need to consent, a potential bottleneck. The NEF suggests offering landlords a separate incentive, such as a council tax rebate, to speed uptake. Social housing providers, which already run bulk-install programmes, are expected to be early adopters.
The catch is that the proposal is just that, a proposal. No government has committed to it, and the next general election is at least two years away. Even if adopted, the scheme would take 18-24 months to launch, Ofgem officials have indicated in similar contexts.
What it costs a typical 3-bed semi
Under current market rates, a 4 kW solar panel system costs £6,000–£8,000 installed, according to the Energy Saving Trust. For a household already spending £900 a year on electricity, the £400 annual saving means a payback period of 15–20 years, longer if the roof needs reinforcement or the inverter fails early.
The NEF scheme eliminates that upfront cost entirely. The levy on energy suppliers would be passed on to all billpayers, adding roughly £12 per year to the average household bill, the foundation estimates. That is less than a cup of coffee a month, but critics argue it still spreads the cost across households that may never receive panels themselves.
For a typical 3-bed semi in Manchester using 3,500 kWh of electricity a year, the net saving after the levy would be around £388 annually, a real return of 6.5% on the notional £6,000 investment, tax-free and index-linked to energy prices.
EPC impact, and resale value
Solar panels alone can lift an EPC rating by one or two bands, according to the government’s Standard Assessment Procedure. For a home currently at band E, adding a 4 kW array with battery storage can push it to band C. That matters because from 2028, landlords will need a minimum EPC band C to let properties in England and Wales, a rule that could force thousands of landlords to act.
The NEF scheme would effectively hand those landlords the upgrade for free, removing the single biggest barrier to compliance. For owner-occupiers, a higher EPC rating typically adds 5-10% to resale value, estate agents report. A home in band C sells for £12,000 more on average than an identical home in band E, according to Nationwide Building Society data.
But the proposal does not include battery storage, which is needed to maximise self-consumption. Without a battery, a typical household uses only 30-40% of the solar electricity it generates; the rest is exported to the grid at 5-15p per kWh under the Smart Export Guarantee. Adding a battery costs £2,000–£4,000 extra, and the NEF scheme does not cover that.
What this means for UK homeowners, now
If you qualify for the proposed scheme, the best move is to wait, but not indefinitely. The NEF’s timeline suggests rollout in 2026 at the earliest. In the meantime, existing grants are available now: the Great British Insulation Scheme offers free loft and cavity wall insulation for low-income households, and the ECO4 programme covers solar panels for those on certain benefits.
Households not on benefits can check the Smart Export Guarantee rates on Ofgem’s website and compare solar panel quotes through the Energy Saving Trust’s approved installer list. The average 4 kW system costs £6,000 today, but prices have fallen 15% in the last two years and are expected to drop further as Chinese manufacturing overcapacity filters through.
The NEF proposal is a bold idea that addresses the single biggest barrier to solar adoption: upfront cost. Whether it becomes policy depends on the next government’s appetite for a levy-funded scheme. For now, the message is clear: if you own a south-facing roof and pay your own electricity bill, solar panels will pay for themselves eventually. The question is whether you can afford to wait, or whether the state will foot the bill.
Frequently Asked Questions
The New Economics Foundation proposal has not been adopted by the government. If approved, rollout is estimated for 2026 at the earliest. In the meantime, existing schemes like ECO4 and the Great British Insulation Scheme offer free or subsidised solar panels for eligible low-income households.
Yes, but your bill will be much lower. A typical 4 kW system can cut annual electricity costs by £400, but you will still pay standing charges and use grid power at night or in winter unless you also install a battery. The NEF proposal does not include battery storage.
