According to a statement from Solar Energy Scotland, solar installations and energy poverty in Scotland have worsened since the end of the country’s interest-free loans for residential solar.
The government’s decision to end the loan scheme in 2023 was a “major mistake”, according to Josh King, chairman of Solar Energy Scotland, which has seen Scottish PV installations decline significantly as a percentage of total UK installations. Solar Energy Scotland is a regional part of the British trade association Solar Energy UK.
“The profit [from the loans] were high impact, low cost, widely distributed across social groups and also across the country,” King continued. “In the absence of this, combined with ill-considered changes to building standards, Scotland has gone from well over a quarter of the UK’s small-scale rooftop solar market to barely a tenth in six years. This has had consequences for energy poverty, the economy and the energy security of our country.”
After the loans were introduced in 2017, Scotland’s share of UK solar installations grew to over 26% in 2020 and 2021. That figure has since fallen steadily to just over 10% in 2025, according to data from MCS.
Solar Energy Scotland has called for the recovery of loans since the end of 2024when King argued in a letter to Scottish First Minister John Swinney that solar and energy storage systems are “unique in their ability to deliver rapid, tangible energy savings for households.”
Distributed benefits
King’s comments are based on a report from the Grantham Research Institute, a climate and environment institute of the London School of Economics (LSE), which found that Home Energy Scotland’s (HES) interest-free loans have “increased household uptake of rooftop solar panels in Scotland, even though the country has relatively low solar potential”.
The newspaper said the introduction of the HES loans “offset” the fall in the number of UK solar installations following “substantial cuts in UK support for renewable generation” when the Feed-in-Tariff scheme was phased out. It is found that approximately 21,000 additional PV systems have been added as a result of the HEC loans, amounting to approximately 33 GWh per year.
It also found that the loans, which had low financing costs and long repayment terms, reduced the average size of new PV systems and increased the distribution of installations “across wealth groups.” Solar Energy UK said the scheme had “helped to reduce fuel poverty”.
“In contrast to previously researched policies, including upfront discounts and feed-in tariffs (FiTs), there were broad benefits and relatively greater impacts in areas of lower wealth and in urban and accessible rural areas,” the paper’s authors wrote. They added that the benefits of FiT and upfront rebate programs were “concentrated among high-income households,” while HEC loans saw the biggest impact in lower-income areas.
The findings show that inequality in PV installations in Scotland decreased when HEC loans were in place, while it increased in England over the same period. In addition to more equitable distribution, the authors wrote that “perceived fairness is a key determinant of public support” for renewables and subsidy policies.
However, King expressed concern that since the abolition of the loans, policy trends have reversed in Holyrood and Whitehall: “We are very concerned that the Scottish Government appears to have lost interest in the versatile potential of solar energy – whether on the ground, in new homes or in existing buildings,” he said.
“After three years in draft, the Solar Vision appears to have disappeared as it is not mentioned at all in the draft Climate Change Plan. The contrast with the enthusiastic support from Whitehall could not be clearer.”
Solar Energy Scotland has called for the restoration of interest-free loans for solar and energy storage systems, alongside calls for a 2035 target for solar installations.
