Solar installations and energy poverty in Scotland have worsened since the abandonment of the country’s interest-free loans for residential solar PV.
January 14, 2026
Solar installations and energy poverty in Scotland have worsened since the abandonment of the country’s interest-free loans for residential solar PV, according to a statement from Solar Energy Scotland. 
The government’s decision to abandon the loan scheme in 2023 was a “big mistake”, according to Solar Energy Scotland chair Josh King, which has seen Scottish PV installations decline significantly as a percentage of total UK installations. Solar Energy Scotland is a regional part of the UK industry body, Solar Energy UK. 
“The gains [from the loans] were high impact, low cost, distributed broadly across social groups and around the nation, too,” King continued. “In the absence of them, combined with ill-considered changes to building standards, Scotland has gone from having more than a quarter of the UK’s smaller-scale rooftop solar market to barely a tenth over six years. That has had consequential implications for energy poverty, the economy and our nation’s energy security.” 
After the loans were introduced in 2017, Scotland’s share of the UK’s solar installations grew to over 26% in 2020 and 2021. That percentage has steadily fallen since then to reach just over 10% in 2025, according to data from MCS. 
Solar Energy Scotland has called for the reinstatement of the loans since late 2024, when King argued in a letter to Scottish First Minister John Swinney that solar and energy storage systems are “unique in their ability to offer quick, tangible energy savings for households.”
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King’s comments are based on a report from the Grantham Research Institute, a Climate and environmental institute at the London School of Economics (LSE), which found that the Home Energy Scotland (HES) interest-free loans “increased household adoption of rooftop solar panels in Scotland, even though the country has relatively low solar potential”. 
The paper said that the introduction of the HES loans “offset” the decline in UK solar installations after “substantial cuts in UK-wide support for renewable generation” as the Feed-in-Tariff system was phased out. It finds that around 21,000 additional PV systems were added as a result of the HEC loans, adding up to around 33GWh per year.
 It also found that the loans, which had low borrowing costs and long repayment periods, reduced the average size of new PV systems and increased the spread of installations “across wealth groups”. Solar Energy UK said the scheme had “helped to reduce fuel poverty”. 
“Unlike previously examined policies, including upfront rebates and Feed-in-Tariffs (FiTs), there were broad gains and relatively larger effects in lower-wealth areas and across urban and accessible-rural locations,” the paper’s authors wrote. They added that FiT and upfront rebate programmes saw benefits “concentrated among high-income households”, while HEC loans saw the greatest effect in lower income areas. 
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The findings show that PV installation inequality declines in Scotland when HEC loans were in place, while it increased in England over the same period. As well as a 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 removing the loans, policy trends in Holyrood and Whitehall had flipped: “We are very concerned that the Scottish Government appears to have lost interest in the manifold potential of solar energy – whether on the ground, on new homes or retrofitted to existing building,” he said.
“After three years in draft, the Solar Vision appears to have been airbrushed out of existence as it is not mentioned at all in the draft Climate Change Plan. The contrast with Whitehall’s enthusiastic backing could not be clearer.” 
Related:The biggest UK solar news from 2025
Solar Energy Scotland has called for interest-free loans for solar and energy storage systems to be reinstated, alongside calls for a 2035 solar installation target. 
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Will Norman
Senior Reporter, Informa
Will is a senior reporter who primarily covers the policy and geopolitics behind the energy transition, with a particular focus on manufacturing. 
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