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Millions of Octopus Energy customers will soon be able to spread the cost of solar panels over up to seven years, thanks to a new partnership with digital bank Zopa. This "buy now, pay later" (BNPL) financing agreement marks Zopa's entry into the renewable energy market, providing an accessible way for consumers to finance the purchase and installation of Octopus solar panels. Customers can now split the costs into as many as 84 monthly instalments through a range of BNPL products.
The partnership, akin to payment deferral schemes from companies like Klarna and Clearpay, will also finance app-controlled electric vehicle (EV) chargers installed by Octopus engineers.
While many BNPL schemes are interest-free, Octopus charges around £9,000 for installing ten solar panels and a 5kWh battery. According to reports, customers will face a 9.9 per cent interest rate on these larger loans.
Critics of BNPL models argue that some consumers accrue debt that can prove difficult and costly to pay off. However, Zopa emphasized that its BNPL and retail finance products are subject to rigorous credit and affordability checks. The digital bank also shares data with credit checking agencies to prevent the accumulation of unmanageable debt and avoid cycles of "piling borrowing on top of borrowing."
Advocates of green financing deals, which have gained popularity in recent years, counter that the risk of customers failing to make repayments is mitigated by the way the installation of solar panels and other clean technologies reduces energy bills. These savings can then be redirected to help pay back the loan, with households benefiting from long-term cost reductions once the payment plan is completed.
Zopa launched its BNPL and retail finance products in August 2023. By April 2024, the digital bank had scaled up to lend nearly £100 million while offering its products to over 500 merchants and 70,000 customers.
"The energy security and prosperity of future generations depend on greening our economy and that requires large scale investments," said Dave Farbrother, CEO of Zopa's BNPL and retail finance division. "We are proud to be partnering with Octopus Energy to make the switch to energy sustainability more accessible for millions of UK consumers.
"Not only can Brits cut their electricity costs by up to 90 per cent by switching to solar, with Zopa they can now also spread their upfront costs over 24 to 84 months. Together we are extending the reach of green energy with financial solutions that put customers first and are fully regulated, offering piece of mind."
The announcement comes as climate change and high energy bills increasingly encourage households to turn to solar energy as a cost-effective, renewable source of electricity. This shift has led to rapid growth across the sector. Today, approximately 1.3 million homes in the UK are equipped with solar panels, according to the Department for Energy Security and Net Zero—an increase of more than 4,000 per cent since 2010.
"The biggest power plant we've got is the sun - so making use of it by creating mini power generators on our roofs is an absolute no-brainer," said Jessica Wilkinson, commercial director at Octopus Energy. "We've already installed 3,000 solar panels on UK homes, and we're pleased to enable even more people to benefit from this cheap, clean energy source through this new financing solution with Zopa Bank."
Octopus and Zopa's "buy now, pay later" deal is a growing trend. In recent years, several leading energy companies have introduced green financing offers. At the same time, numerous banks have rolled out green mortgage deals, offering customers preferential interest rates if they reduce their energy bills. Additionally, Stockholm-based heat pump firm Aira plans to invest £300 million over three years in the UK to help one million homes transition from gas boilers to low-carbon heat pump-based heating systems. Aira's "Spotify of heat pumps" subscription model installs the technology with zero upfront cost, making it more accessible for homeowners.
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