Minister for local energy and jobs Martin McCluskey said the Warm Homes Loan Scheme would help more Scottish households overcome the upfront cost of upgrading their homes, while creating opportunities for the skilled workers and businesses installing clean energy technology.

Government support will reduce borrowing costs by up to five percentage points compared with standard market rates. Participating lenders will offer a range of products, including interest-free options, with repayment periods of up to 30 years available from some lenders.

Installing a heat pump, solar panels and battery storage together could save households up to £550 a year on their energy bills, with potential additional savings of up to £300 through a smart time-of-use tariff.

Eligible Scottish households will also be able to access Home Energy Scotland support alongside the new loans.

Minister for local energy and jobs Martin McCluskey said: “Too many families across Scotland have seen their energy bills rise because of events thousands of miles away. We want to give people greater control over what they pay to heat and power their homes.

“For many households, the upfront cost of solar panels, a battery or a heat pump puts those improvements out of reach. These new loans - together with existing grants - will help more people spread that cost and benefit from clean energy at home.

“This is also an opportunity for Scotland’s workforce. We need skilled electricians, heating engineers and installers to carry out these upgrades

“By helping people improve their homes, we can cut energy bills, support skilled work in our communities and reduce our exposure to volatile international fossil fuel markets.”

The scheme is expected to support around 100,000 homes and 110,000 clean energy installations across the UK during its initial phase, which is expected to last 12 to 18 months.

Loans will support a range of technologies, with maximum amounts including £15,000 for solar panels, £15,000 for battery storage and £20,000 for an air-to-water heat pump.