Home Upgrade Grant (HUG2): Off-Gas-Grid Solar Funding

HUG2 was one of the most generous energy efficiency schemes available in England for off-gas-grid homes. Although it has now closed, understanding what it covered — and what has replaced it — is useful context for anyone researching solar funding routes.

What Was the Home Upgrade Grant?

HUG2 was the second phase of the Home Upgrade Grant, a government scheme targeting homes in England that are not connected to the gas grid. It has now closed, with the Warm Homes: Local Grant taking over its function (with broader eligibility — including gas-connected homes). These properties — often rural homes relying on oil, LPG, electric heating, or solid fuel — tend to have higher energy costs and worse EPC ratings than gas-heated homes.

The scheme funds energy efficiency upgrades to bring these homes up to a better standard. Solar panels are explicitly included as an eligible measure.

HUG2 is funded centrally by the Department for Energy Security and Net Zero (DESNZ) but delivered locally. Your council applies for a pot of funding, then distributes it to eligible homes in the area through approved installers.

Who Qualifies?

Property criteria:

• Located in England (Scotland and Wales have separate schemes)
• Not connected to the mains gas network
• EPC rating of D, E, F, or G
• Must be the applicant's primary residence

Income criteria (one of the following):

• Household income below £36,000 per year (gross), OR
• You receive a qualifying means-tested benefit (Universal Credit, Pension Credit, Child Tax Credit, etc.)

Tenure:

• Owner-occupiers qualify directly
• Private tenants can qualify, but the landlord must consent to the work
• Social housing may qualify in some council areas

What Does HUG2 Fund?

The scheme takes a fabric-first approach, meaning insulation is usually prioritised. But solar PV is a core eligible measure. The full list includes:

• Solar PV panels — typically up to 4kW
• Solar battery storage — in some council areas, as part of a solar package
• Air source heat pumps
• Loft, cavity wall, solid wall, and underfloor insulation
• High heat retention storage heaters
• Energy-efficient windows and doors
• Ventilation improvements

The maximum grant per household is typically £10,000–25,000, depending on the measures installed and your council's allocation. The solar component alone could be worth £5,000–8,000.

How to Apply Now (Warm Homes: Local Grant)

HUG2 has closed. The current route for off-gas-grid and low-income households in England is the Warm Homes: Local Grant:

1. Apply online at gov.uk/apply-warm-homes-local-grant or call 0800 098 7950
2. Eligibility check — household income under £36,000 or on means-tested benefits; EPC D–G; England
3. Your local council arranges everything — assessment, contractor selection, installation
4. No cost to you — fully funded for eligible households

Unlike HUG2, the Warm Homes: Local Grant covers gas-connected homes too, making it accessible to a wider group.

HUG2 vs ECO4: Which Is Better for Solar?

If you're off the gas grid and meet the income criteria, HUG2 generally offers more comprehensive support than ECO4:

• Higher per-household funding — HUG2 can fund multiple expensive measures
• Battery storage included — Some HUG2 councils fund batteries alongside solar; ECO4 typically doesn't
• Retrofit coordination — HUG2 uses PAS 2035 retrofit assessors to design a coordinated package
• No energy supplier involvement — Funding comes from central government via your council

If you're on the gas grid, HUG2 isn't available and ECO4 would be your primary route instead.

Practical Considerations

System Ownership

Solar panels installed under HUG2 become your property (if you're the homeowner). You own the electricity generated, can claim Smart Export Guarantee payments, and benefit from the system for its full 25+ year lifespan.

Quality Standards

HUG2 installations must be:

• Carried out by MCS-certified installers
• Managed by TrustMark-registered businesses
• Assessed under PAS 2035 by a qualified retrofit assessor

What If I Don't Qualify for the Warm Homes: Local Grant?

If your income is above £36,000, you can explore ECO4 (if you receive means-tested benefits) until December 2026, or the government-backed Consumer Loan Scheme at 0–3% interest launching April 2027. 0% VAT on solar applies to everyone regardless of income.

If you don't qualify for HUG2 but want to explore private options, these are popular choices:

Canadian Solar HiKu7 455W

£80

watt peak

455

efficiency pct

22.9

dimensions mm

1762 x 1134 x 30

weight kg

22

View on Amazon

Affiliate link — we may earn a small commission at no extra cost to you

LONGi Hi-MO X6 450W

£85

watt peak

450

efficiency pct

23

dimensions mm

1722 x 1134 x 30

weight kg

21.3

View on Amazon

Affiliate link — we may earn a small commission at no extra cost to you

Real-World Example

A typical HUG2-funded solar installation for an off-grid rural home might include:

• 4kW solar PV system (9 x 450W panels)
• 5kWh battery storage
• Loft insulation top-up
• Total package value: £12,000–16,000
• Cost to homeowner: £0

The solar and battery alone could save £600–900 per year in electricity costs, with the insulation adding further heating savings.

Share this article