Warm Homes Loan Scheme: Launch Status, Caps, MCS Rules

Quick answer

Why this matters for UK solar and battery installers

The Scheme Rules are written for lenders, not for installers. Even so, the installer's paperwork sits at both ends of every loan. A lender checks the installer's MCS status when the quote arrives, and checks the MCS certificate again after the install. The government only pays the lender's grant after that second check.

That makes an installer's quote template, subcontractor control and certificate filing part of the lending process. It also means a customer will soon ask whether a job qualifies, before any lender has published a product.

This piece separates what the published Rules confirm from what is still open. It does not repeat the consumer-facing summaries that dominate search results.

What the Warm Homes Loan Scheme actually does

The Department for Energy Security and Net Zero (DESNZ) does not lend to households and does not give them a grant. It pays a non-repayable capital grant to approved lenders, worth up to 20% of each eligible loan. The lender must pass the benefit to the borrower as a lower nominal interest rate. DESNZ pays that grant after the installation is verified, not at loan approval.

Several limits shape the real saving:

• The grant applies only to loans with a term of three years or more.
• It is designed to cut up to about five percentage points from the lender's starting rate. If the starting rate is lower than that, the grant is limited so the borrower's rate does not fall below zero.
• The starting rate is the lender's own market rate for an equivalent unsubsidised product. The scheme does not set rates.
• The 20% grant cap can bind on long terms, so the full five-point cut is not guaranteed.

The Rules include a table showing how the capped grant percentage varies with the starting rate and term. An extract:

The table is for lenders. For installers, the takeaway is that longer terms attract a larger grant, but the 20% cap still applies. A worked case follows. It is illustrative: it assumes a £12,000 solar loan over 7 years, a lender starting rate of 8.0%, and the full five-point cut to 3.0%. No lender has published rates.

The borrower saves £28.47 a month and £2,392 in total interest. DESNZ would pay the lender about £1,827, which is 15.2% of the loan and matches the Rules' table for an 8% starting rate and a 7-year term.

The borrower repays the full £12,000 at the lower rate. The grant goes to the lender and reduces the principal the lender has at risk. Real products will differ, because each lender prices its own loans.

What solar and battery work qualifies

Three exclusions matter most for quoting:

• Roofing and structural work. The scheme will not fund replacement roofing or structural work needed before solar goes on. A lender may offer a separate ordinary loan for that work.
• Ground-mounted systems. The Rules describe eligible solar as roof-top mounted. They do not list ground-mounted systems.
• Finance type. Property-linked finance, subscriptions and leasing are not eligible in the first phase. Lending to businesses or SPV structures is not allowed.

On caps, the Rules say total costs must sit within the maximum loan for each technology. The natural reading is that a combined solar and battery job is capped per measure, so £9,800 of solar plus £6,200 of battery would fit. That is a reading of the table, not a stated worked example, so confirm it against each lender's product terms.

Heat pumps, biomass boilers, heat network connections and some micro-renewables are also in the scheme. They sit outside the scope of this piece.

Who can borrow

The Rules limit borrowers to two groups, both borrowing personally:

• Owner-occupiers of existing domestic properties.
• Private rented sector landlords.

There are no income thresholds, no minimum energy-efficiency requirement and no scheme-level restriction by property type. Lenders still run affordability and credit checks and may add their own conditions, such as asking for an Energy Performance Certificate. An owner of several properties can take a loan for each. A mixed-use property can qualify where the system mainly serves the household.

The MCS gate

For solar and batteries, the Rules are explicit. An MCS-certified product must be installed by an MCS-certified installer, to the relevant MCS design and installation standard. The installer must hold certification for the specific measure at the point of installation. For how the redeveloped MCS Installer Scheme is changing, see our guide to the MCS 2027 deadline.

Lenders must verify MCS status twice: when the quote is submitted, and after installation. The Rules say the technical arrangements for the MCS data link are still under development. Interested lenders are to confirm whether MCS's proposed approach, built on its existing partner interfaces, works with their systems.

For loans that are not arranged through point-of-sale finance, the quote itself is part of the application. The Rules say it must:

• come from an installer that is MCS certified, and include the installer's MCS number
• be dated within the last six months
• be addressed to the applicant, on company headed paper
• show the full installation address
• give an itemised cost breakdown of all improvements
• show the system size for the eligible measure, in kW

Before approving a loan, lenders must also check that the measure is eligible, that the tenure and property type qualify, that the installer is certified, and that the amount sits within the cap for that technology.

After the install, the installer lodges the completed work in the MCS Installation Database. The resulting MCS certificate is the basis for the lender's verification and for the grant claim.

The lender's fraud-reporting template lists cases where neither the main installer nor the subcontractor is MCS accredited, and cases where an installer loses accreditation partway through delivery. The Rules do not say lenders will audit subcontractors. It is a reasonable reading that they will care who does the work.

How the money moves

Two payment flows run in parallel, and installers only see one of them.

• Loan disbursement. Each lender decides when to release funds. The Rules list upfront in full, as a deposit, directly to the installer, after verification, or another arrangement.
• Grant to the lender. DESNZ pays grant claims monthly in arrears, only after MCS verification of the loan. If a lender releases funds before that, the lender carries the timing risk.

An installer's cash-flow experience can therefore differ lender by lender, and none of it is fixed by the scheme. Ask each lender the question directly.

Quality disputes also change shape. The Rules say installers are responsible for complaints about installation quality and workmanship, with MCS as the escalation route. Lenders can also be held liable for installation quality and mis-selling under the Consumer Credit Act, where it applies. A badly finished job on a financed system can reach the lender. That gives lenders a reason to care which installers they accept, though the Rules do not say they will vet installers beyond MCS verification.

One consumer-facing detail may come up on site. Lenders must include wording in their loan documents allowing DESNZ or its agent to request access to the property for compliance purposes, and the borrower must actively confirm it.

Funding is a shared pot

The scheme draws on £300 million of grant capital. Funding sits in one central pot managed by DESNZ, open to all participating lenders on a first-come, first-served basis.

The Rules set out a notice process:

• DESNZ publishes monthly draw-down data and forecasts.
• It will give lenders six months' notice when six months of funding remain. Grant-supported lending can continue during that period.
• It will then give one month's notice that grant funding will stop, and will honour the grant on eligible loans made during that month.

DESNZ also reserves the right to amend scheme positions, including the loan caps, with 30 days' written notice. Changes will not apply retroactively. A figure printed in a brochure today may not hold for the whole scheme.

What is still open

The published record is firm on the rules and silent on the lenders. The first lender window closed by 29 July, GOV.UK last updated the scheme page on 17 September, and a second window is planned for later in 2026.

A lender being approved does not mean its product is live. The Rules require a separate product approval, and a go-live declaration before any lending. DESNZ has also said it will publish official statistics each month after the first month of delivery, including loans by lender and region. Those figures will show the market opening in practice.

What EPC teams should do now

Where 3D design and automated BOMs fit in

A design tool cannot make an installer MCS-certified, approve a lender or confirm a customer's loan. Those sit with MCS, DESNZ and the lender.

What it can do is keep the quote consistent. Itemised costs, system size in kW and a layout the customer can see all feed directly into the quote fields the Rules require. Splitting eligible solar and battery cost from excluded roofing work is easier when the quote is built from one project record.

Reslink supports mobile site and roof mapping, automatic panel placement, live 3D revisions, and automated electrical and structural BOMs.

See the full workflow → Book a demo

Frequently Asked Questions

Q1. Can a customer who already has solar add panels or a battery?

Yes. The Rules cover adding solar panels to an existing installation, and batteries either on their own or paired with solar. The same MCS and cap rules apply to the new work.

Q2. Can tenants apply, and can landlords borrow for several properties?

Tenants are not eligible borrowers. A private landlord can borrow in their own name, and an owner of several properties can take a loan for each one. Lending to businesses or SPV structures is not allowed.

Q3. Does the scheme cover Scotland, Wales and Northern Ireland?

Any domestic property in the UK is eligible. The Rules say the scheme is designed to operate alongside existing schemes in the devolved administrations.

Q4. Does an EV charger count toward the loan cap?

Yes. A charger is an eligible ancillary cost only as part of a solar or battery installation, and ancillary work must fit inside the measure's cap. The charger and its installer must be OZEV approved, and a charger that already received an OZEV or other grant cannot be loan-funded.

Q5. Will scheme loans be interest-free?

Not guaranteed. The grant is designed to cut up to about five percentage points from the lender's own starting rate, on terms of three years or more. The rate cannot fall below zero, and each lender sets its own starting rate.

Q6. When does the installer get paid on a financed job?

It depends on the lender. The Rules let lenders release funds upfront in full, as a deposit, directly to the installer, after verification, or another way. DESNZ pays the lender's grant only after MCS verification, and a lender that pays out earlier carries the timing risk.

Q7. Who is responsible if a financed installation is faulty?

Installers are responsible for workmanship complaints, with MCS as the escalation route. Lenders can also be held liable for installation quality and mis-selling under the Consumer Credit Act where it applies, and customers are told to contact the installer first.

Q8. Will DESNZ inspect a customer's property?

It may ask. Lenders must include wording in their loan documents allowing DESNZ or its agent to request access to the property for compliance purposes at any reasonable time, and the borrower must actively confirm it.

Q9. What happens if the funding runs out?

DESNZ has committed to give lenders six months' notice when six months of funding remain, and one month's notice before grant funding stops. It will honour the grant on eligible loans made during that final month.

Final takeaway

The Warm Homes Loan Scheme is a rate subsidy, not a grant, and its published rules are specific. Solar and battery loans are capped at £15,000 each, MCS certification is mandatory, and the grant follows verification. What is missing is the lender layer: no lender is named, no rate is public, and the MCS data link is still being built.

For installers, the useful work is operational. Fix the quote template, check MCS scope and subcontractors, and separate excluded work. Then watch the GOV.UK page for the first named lenders before promising a customer anything.

You May Also Like

• MCS 2027 Deadline: What's Actually Changing for Solar and Battery EPCs
• NFCC BESS Guidance 2026: What's Confirmed, What's Open for UK EPCs
• UK Plug-In Solar 2026: What EPCs Should Tell Clients

Sources

• Warm Homes Loan Scheme: apply to participate as a lender (Phase 1), GOV.UK: publication history, first-window closure, second window, £300 million grant capital
• Warm Homes Loan Scheme: Scheme Rules (updated September 2026), DESNZ: eligibility, measures, caps, MCS requirements, grant mechanism, payment flow, funding pot
• Home Upgrade Consumer Protection Reform, DESNZ consultation: consultation dates and purpose

Dates, caps and requirements can change on 30 days' written notice. Recheck the latest GOV.UK scheme page and your lender's product terms before quoting or advising a customer.