Overview

The Home Energy Scotland Grant and Loan Scheme, funded by the Scottish Government, offers homeowners in Scotland financial support in the form of grants, interest free loans or a combination of both to install clean heating systems and energy efficiency measures.

For clean heating systems (e.g., heat pumps), homeowners can receive a grant of up to £7,500, with an additional optional interest-free loan of up to £7,500.

For energy efficiency measures (e.g., insulation), grant funding is available for up to 75% of the combined cost of measures. This is capped at a maximum amount of £7,500. The remainder of funding required can be taken up as an optional interest-free loan (up to the maximum funding limit per improvement – see Home Energy Scotland. (2025) below for further information on the maximum funding limit for each specific improvement, measure, or technology).

Rural and island homes are eligible for an additional £1,500 uplift applied to both clean heating and energy efficiency grants, bringing the maximum available grant funding to £18,000.

Home Energy Scotland provides advisory services for potential applicants, while the scheme is administered by the Energy Saving Trust, an organisation accredited by the Financial Conduct Authority.

Financials

Householders can choose how long to take to repay the loan, subject to maximum terms based on the borrowed amount:

• Up to £5,000 – repayable over 5 years
• £5,000 to £9,999 – repayable over 10 years
• £10,000 or more – repayable over 12 years.

Scale of deployment

In the financial year 2023-2024, the scheme had a budget of £56 million, with £54,080,923 distributed by the end of Q3.

Overview

Lendology provides loans funded by local partner councils to address specific community needs. Lendology recently partnered with Suffolk County Council to launch the £3 million Warm Homes Suffolk loan.

The interest-free loan scheme helps homeowners invest in energy-efficient upgrades such as insulation, solar panels, battery storage, glazing, and heat pumps. The £3 million funding was secured as part of the council’s ‘County Deal’ negotiations and is targeted at residents who do not qualify for other grants.

The scheme is designed to be self-sustaining, with loan repayments reinvested to support future applicants.

Financials

Homeowners can borrow up to £15,000 at 0% interest (0.2% representative APR). Loan terms span up to seven years, with no early repayment charges.

A £20 fee is required to register a Title Restriction against the property, meaning the home cannot be sold without approval unless the loan is fully repaid.

Scale of deployment

Beyond the Warm Homes Suffolk loan, as of 2022, Lendology had issued 2,856 loans, totalling £16,876,523. Of this total, £9,851,326 had been recycled back into the fund.

Loan repayment rates remain strong, with less than 0.2% (£29,000) outstanding.