UK Home Solar Hits New Heights in 2025 and Gets New Warm Homes Plan But Watch Out…

UK solar has been doing great since the prior government killed feed in tariffs and the market bombed 10 years ago.  

In the last 5 years UK installs have grown 9X off that low base from 25,000 installs in 2020 to 228,000 in 2025 (OpenSolar estimates).  

This 5 year success is without subsidy, with a market businesses can invest in, knowing the economics of solar with batteries allows customers to save money and businesses to make a profit selling those systems.

That brings the total number of solar homes to 1.8m, representing over 6% of British homes.  With OpenSolar sales data we can see that the average system size has increased to 6kW and 85% of sales now come with a battery, averaging 10kWh in size.  We’ve created distributed power plant with 8GW of peak power (twice the size of the largest conventional power plant - the heavily subsidised 4GW Drax wood burner) and hundreds of thousands of batteries deployed across the grid providing potentially critical services to the grid and to their owners.  

And Opensolar data shows that the price to consumers for that size system has fallen to £11,000 or £1.80 per W, that’s down 30% in the last 3 years and lowers customers bills by half. In short, it’s working!

So how do we react to the news last night, when the UK government released the much previewed “Warm Homes Plan”.   The first reaction from us greenies is usually “Great, the government cares about clean energy” - and they want to ’triple the number of homes with solar by 2030, which’d be great.  But lets look at the detail behind the usual PR-team-written soundbites….here’s the summary:

- $5bn Taxpayers money to give 500,000 free systems to low-income homes (around $10,000 each)….no detail on which 500,000 or how it’ll be done, looks like it might be focussed on social housing

- Low to zero interest loans to be made available for solar, battery and heat pump installs…again no detail on how 

- New rules requiring solar on new builds, which I think was already announced

- New lower target to hit 450,000 heat pumps sold a year by 2030, with the £7,500 subsidy for heat pumps extended with £2.7bn funding, which equals 360,000 new heat pumps total not per year…no detail on what happens beyond that first 360,000

- New laws to ensure landlords make their homes energy efficient for their renters…no details on how

Personally, I applaud the effort to direct public funds to support low-income homes and those experience energy poverty.  To me that’s a moral requirement in any modern economy.  

On the rest, it’s a mixed bag.  First thing this will do is slow down consumer demand - because anyone today reading this will now wait to see what the freebies are, so that’ll hurt sales and hurt installers.  This is the main problem with subsidies - I’ve seen it in so many countries in my 25 years doing this - subsidy announced, market freezes, subsidy spent market spikes, government changes/runs out of money, subsidy ends…look at what happened with feed in tariffs and the businesses that were created and closed in those crazy spikes in the UK market in 2010-2015.  

I see it as good news that there is no new subsidy for the overall market, solar doesn't need it.  Unfortunately, the vague headlines and promise of low cost finance will hurt first.

On low-interest loans - it’s distorting a market that already exists, where customers can access finance from partners on OpenSolar and other banks, or add it to their mortgage, but if done right and executed through the innovative companies providing finance in the market today it could really lower that cost of capital which would be great.   But there’s no detail.  And again if its short term it spikes, then hurts consumer demand.

New builds - great.  But we need more detail, and risk is you chuck 2-3kW on a roof that should have 6 kW to max the solar savings, because again you’ve distorted the market….I look out train windows in the UK and it pains me to see all these tiny systems on new builds, when you know the right thing a consumer would do is go big to max their savings and power their EV - so it has to be done right to max the roof space with low cost solar, and there’s no detail.

On heat pumps - yes they need financial support today, due to the small scale in the market.  The right strategy would be to copy the best overseas bridge mechanisms which have a falling subsidy, high at first then declining to zero over a known period, falling as the industry scales and reduces its costs.  This £7.5k support already exits, but isn’t kicking off the market…we’re at 60,000 installs a year, up 12% from 2024, with 29 million homes still to go.  

The government shied away from banning gas boilers in this plan so that won’t drive new behaviour.  We need a better heat pumps strategy that includes mass education, installer training, regulation standardisation, and awareness raising on the benefits of heat pump economics when combined with solar and storage….and a higher-sooner subsidy plan, just to boost the scale we need, although I’ll feel so much happier when we’ve got rid of that subsidy too.

For the government to hit this awesome target to triple the number of solar homes by 2030 that’d be 5.4m homes (18% of all uk homes) or 3.6m new installs over next 5 years, which is 726,000 per year, which is 3x our current install rate of 2025.

Low interest loans could really help demand, but what will actually drive uptake is removing the red tape and grid connection issues that hamper real installers in the real world today - not more subsidies.  We need to make it easier for contractors to be certified - ask your electrician and plumber why she or he is not doing solar or heat pumps - thats the answer!  

We need an open market with access to the grid service market to monetise batteries easier, visibility on what we can plug into the grid where, including V2G legislation, that’s where the government should focus - to deliver the modern Electric Protocol for the modern grid - not more public money the government doesn’t have!