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UK plan would use government-backed solar bonds to cut loan rates
The scheme would offer 25-year loans at about half current market rates, aimed at cutting bills by around £250 a year.
Britain’s household solar panel market is growing, but a report argues many lower income households still cannot afford installations because upfront costs of roughly £5,000 to £10,000 are out of reach. While some firms offer longer repayment loans, the report says high interest rates can erase most of the energy bill savings for the first decade, leaving households exposed as energy costs rise further this winter.
According to the report cited in the coverage, the UK energy price cap is forecast to rise by 4% from October, to an annual level equivalent to £1,729 for the rest of the year. It also points to the pressure from rising gas prices and says that without intervention, solar financing may remain too expensive to deliver meaningful household savings.
The Common Wealth thinktank is urging the government to create a universal entitlement to solar panels, paid for through “solar bonds” modeled on UK national savings products such as Premium Bonds. The proposal would allow savers to earn interest while funding solar panel loans for households.
The report estimates that households would pay a lower interest rate than the open market, about half of current rates, which it places around 9.0% to 10.0%. It estimates the program could reduce household energy bills by about £250 per year, with loans running up to 25 years and designed to be repaid through an addition to the standing charge on standard energy bills.