home energy scotland loan

What Is The Home Energy Scotland Loan?

The Home Energy Scotland Loan is a scheme funded by the Scottish Government to help homeowners finance the costs associated with the installation of a heat pumps and energy efficiency improvements. This is an interest-free loan, and cashback is available for eligible renewable heating systems.

What access to funding does the Scottish Government scheme provide?

  • Up to £15,000 to improve home energy efficiency.

  • Up to £17,500 for installing renewable energy systems, such as £10,000 for a heat pump (also available to self-builders).

  • Up to £6,000 for energy storage systems.

  • Up to £500 for installing a heat meter alongside a new heat pump.

There is also a cashback available for certain measures which means that you won’t need to pay back that portion of the funding.

To give you an idea of what the costs might look like, here is an example:

  • Receive up to £10,000 in funding for a heat pump.

  • Up to £7,500 could be cashback (75%).

  • Choose the loan period (this will depend on the amount borrowed).

  • Pay back the remaining interest-free loan of £2,500 over a maximum of 5 years.

What Is Covered Under The Home Energy Scotland Loan?

The amount you can borrow will vary depending on the type of work being carried out and the work will fall under two categories:

  • Home energy efficiency funding - Up to £15,000 of funding available and covers measures such as insulation and heating systems (gas boilers, warm air units and high heat retention electric storage heaters).

  • Home renewables systems - Up to £17,500 of funding available and covers wind and hydro turbines, solar (PV) and water heating systems, and more.

If you are looking to have a heat pump installed, this is classed as a home renewable system and means you are eligible for up to £10,000 in funding. Of the £10,000, up to 75% can be claimed as cashback. The size of the loan available will either be the total cost of the heat pump installation or the maximum value available for that measure, whichever is less. For example, if a heat pump costs £7,500, then £7,500 is the maximum funding available.

Homeowners or business will receive a grant of £5,000 for installing an air source heat pump, or £6,000 for installing a ground source heat pump. As an MCS accredited installer, Alto Energy will administer the grant with Ofgem on your behalf, and deduct the full grant amount from your quotation. In this way, the amount you pay upfront for your heat pump will be much closer to the amount you would pay for a traditional fossil fuel system, making it easier for you to access the significant carbon savings and running cost savings.

How Do I Get The Home Energy Scotland Loan?

If you’d like to apply for the Scottish Government loan, here are the steps you should follow:

  1. Speak to a Home Energy Scotland advisor for free and impartial advice (0808 808 2282).

  2. Check your home energy efficiency and the suitability of a heat pump for your property. This is something we can help you with.

  3. Review your Energy Performance Certificate (EPC) and look for any work that needs to be completed before claiming loan funding. A Home Energy Scotland advisor can discuss your EPC with you and offer advice. You may be able to apply for loan funding (with cashback available) for any measures recommended on your EPC.

  4. Gather at least 3 quotes from MCS-registered installers like Alto Energy. You can find more MCS-registered installers on the Renewables Installer Finder.

  5. Complete the Home Energy Scotland Loan online application form and provide any relevant supporting documents.

  6. Once the online application has been completed and a loan has been approved, Home Energy Scotland will send you a written loan offer. Work must only commence after you have received a written loan offer from Home Energy Scotland and must be completed within six months of receiving the offer.

  7. After your heat pump has been installed at your property, leave a review of your installer on the Renewables Installer Finder.

  8. Once all work has been completed, submit your claim documents as well as your updated EPC. The updated EPC must show that all energy efficiency improvements have been completed and that a heat pump has been installed.

Any Questions?

If you have questions about the Home Energy Scotland Loan, please do not hesitate to get in touch with our team.

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