How lower-cost finance could deliver bill savings to millions with no upfront costs
The UK faces a sustained cost of living crisis, with energy bills consistently among the highest in advanced economies. High exposure to volatile international gas markets and underinvestment in domestic energy infrastructure have left households and businesses vulnerable to rising costs. Rooftop solar, particularly when paired with battery storage, offers a practical and rapid solution. Unlike large-scale infrastructure, rooftop solar panels with batteries can be installed quickly, connect directly to existing networks and help relieve pressure on the grid by using stored power during peak periods.
The challenge is not technological but financial. Rooftop solar and batteries require upfront investment, while financing costs shape affordability, payback periods and the pace of deployment. These barriers affect government, businesses and households alike, but fall most heavily on households that stand to benefit most from lower bills but face the greatest borrowing constraints.
This paper argues that the UK already possesses a proven mechanism capable of addressing this challenge: preferential or dual interest rate facilities operated by the Bank of England. International experience demonstrates how central banks can provide lower-cost funding to lenders under clear conditions, allowing cheaper finance to be directed toward strategic public policy goals.
Detailed modelling undertaken by the New Economics Foundation and Finance Innovation Lab examines how lower-cost finance could transform the affordability of rooftop solar and battery deployment. The model estimates that a scheme offering low-interest loans at 2% would allow more than 8m households to install rooftop solar and batteries at no upfront cost and save £251 a year on electricity bills over 15 years.
The UK does not lack rooftop space or proven technology. It lacks affordable finance. A rooftop energy revolution is achievable if we choose to finance it accordingly.