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What Solar Panel Grants for Businesses Are Available for UK in 2026
There are several financial incentives and solar panel grants for businesses available in 2026, designed to reduce the upfront costs of commercial solar PV installations. These include capital grants, tax relief schemes, and bespoke finance options for commercial properties.
In this guide, we provide a detailed overview of each scheme, outlining how these opportunities can improve return on investment, deliver tax savings, and support the transition to renewable energy.
Many businesses are not fully aware of the range of support available, so we have compiled this resource to help you recognise the most effective funding solutions for your solar project.
COMMONLY ASKED FAQS ABOUT SOLAR PANEL GRANTS
ARE THERE ANY “FREE” SOLAR PANEL OPTIONS FOR BUSINESSES?
While truly cost-free commercial solar systems are uncommon, businesses can benefit from a Power Purchase Agreement (PPA). Through a PPA, a third-party investor covers the capital expenditure for the solar PV system, including equipment, installation, and ongoing maintenance.
Your business then purchases the generated solar electricity at a predetermined, typically lower rate than conventional grid tariffs, allowing you to reduce operational costs without upfront investment.
ARE THERE ACTUAL CASH GRANTS ON OFFER?
Yes, although solar panel grants for commercial buildings are limited to certain regions or specific business sectors, some regional hubs offer targeted funding opportunities to support sustainable business growth and the adoption of renewable energy technologies.
Industrial Energy Transformation Fund (IETF)
The IETF offers capital funding to support large-scale energy efficiency improvements and deep decarbonisation initiatives at industrial sites. Eligible projects include the integration of commercial solar PV systems, process electrification, and advanced energy management solutions.
Public Sector Decarbonisation Scheme (PSDS)
The PSDS provides funding to public sector organisations, such as NHS trusts and educational institutions, to facilitate the transition to renewable energy systems. This includes the installation of commercial solar PV panels and associated energy efficiency measures to reduce carbon emissions and operational costs.
CAN YOU GET PAID FOR THE ELECTRICITY YOU GENERATE?
Yes, businesses operating commercial solar PV systems are eligible to enrol in the Smart Export Guarantee (SEG) scheme. Under this scheme, licensed energy suppliers are obligated to compensate you for surplus solar electricity generated on-site and exported to the national grid. This provides an additional revenue stream and enhances the overall return on investment for your solar installation.
WHERE CAN I CHECK FOR CURRENT ENERGY SCHEMES IN MY AREA?
To check current local and national support for commercial solar projects, we recommend using the Ofgem business energy efficiency grants and schemes directory.
For detailed information on available grants relevant to your sector or location, please refer to our Commercial Grants for Solar Panels webpage.
WHAT TYPES OF TAX RELIEFS & CAPITAL GRANTS ARE AVAILABLE IN THE UK?
Tax relief and capital grants are both available in the UK, and are designed for businesses to deduct expenses and large purchases, like equipment and commercial property, from taxable profits.
Programs like the Smart Export Guarantee (SEG), Renewable Energy Guarantees of Origin (Rego), and various local and central Government funding initiatives, such as the Annual Investment Allowance (AIA), Public Sector Decarbonisation Scheme (PSDS), UK Shared Prosperity Fund (UKSPF), Industrial Energy Transformation Fund (IETF) offer valuable financial incentives and subsidies to help businesses offset the costs of adopting solar energy.
TAX RELIEFS AVAILABLE IN THE UK
Navigating the tax reliefs available for solar panel installations in the UK can help your business significantly reduce upfront costs and improve overall project viability. These tax incentives are designed to encourage investment in renewable energy by allowing companies to offset a substantial portion of their expenditure against taxable profits.
Below, we outline the key tax relief options available to businesses considering solar PV systems:
50% First Year Allowance (FYA)
The First Year Allowance (FYA) was made permanent in 2023, providing long-term certainty for businesses planning to invest in large-scale commercial solar installations. Under the FYA, companies can deduct 50% of the qualifying expenditure on solar PV systems from their taxable profits in the year of purchase (Gov.UK, 2024).
Annual Investment Allowance
100% Annual Investment Allowance (AIA) for business expenses on all plant or machinery (apart from cars), capped at the maximum allowance (Gov.UK, 2026).
Available to all businesses regardless of size, first introduced in 2008, AIA maximums and the date can range for when they are applied.
Enhanced Capital Allowances
The Enhanced Capital Allowances (ECA) scheme enables businesses to offset 100% of qualifying investment costs against taxable profits in the same financial year. By leveraging the ECA scheme, organisations investing in commercial solar PV systems can significantly reduce upfront capital expenditure, lower ongoing energy costs, and decrease carbon emissions (Gov.UK, N/A).
COMPARISON TABLE: UK TAX RELIEF SCHEMES
Tax Relief Scheme | Description | Funding/Benefit | ROI Impact | Application Link/Resource |
50% First Year Allowance (FYA) | Deduct 50% of solar PV costs from taxable profits in year of purchase. | 50% deduction | Faster ROI
| Claim capital allowances: 100% first-year allowances – GOV.UK |
100% Annual Investment Allowance (AIA) | Deduct 100% of qualifying plant/machinery costs (excluding cars) up to annual maximum. | 100% deduction (up to limit) | Immediate tax relief | Claim capital allowances: Annual investment allowance – GOV.UK |
Enhanced Capital Allowances (ECA) | Offset 100% of qualifying investment costs against taxable profits in same year. | 100% deduction
| Immediate payback |
COMMERCIAL GRANTS FOR SOLAR PANELS AVAILABLE IN THE UK
Solar panel grants for businesses are a key form of financial support that can help reduce the costs of solar installations. By securing Solar Panel Grants for Businesses, companies can make the transition to renewable energy more affordable and sustainable.
Below, we outline the key business solar power grants available to businesses considering solar PV systems:
Industrial Energy Transformation Fund
The Industrial Energy Transformation Fund (IETF) is a government-backed initiative designed to support businesses with high energy consumption in reducing both operational costs and carbon emissions. Since its launch in 2020, the IETF has been delivered in three phases, allocating £500 million in funding through to 2028 (Gov.UK, 2026).
Public Sector Decarbonisation Scheme
The Public Sector Decarbonisation Scheme (PSDS) is designed to achieve a 75% reduction in carbon emissions from public sector buildings by 2037. In September 2024, the Department for Energy Security and Net Zero announced that PSDS funding will continue through to 2028, enabling public sector organisations, to implement low-carbon heating systems and energy efficiency upgrades (Gov.UK, 2026).
Smart Export Guarantee
The Smart Export Guarantee (SEG) is a government-backed scheme introduced on 1 January 2020 to support small-scale, low-carbon electricity generation. Eligible installations must be located in Great Britain and have a capacity of up to 5MW, or up to 50kW for micro-CHP systems. Under the SEG, qualifying generators receive payments for surplus electricity exported to the grid, providing a financial incentive for adopting renewable energy technologies (Ofgem, 2019).
Renewable Energy Guarantees of Origin
A Renewable Energy Guarantee of Origin (REGO) certificate is issued for every megawatt hour of renewable electricity generated and supplied to the grid. Within Great Britain, the REGO scheme enables electricity suppliers to accurately disclose the renewable content of their energy mix, ensuring compliance with regulatory requirements and providing customers with clear, verifiable information regarding the origin of their electricity supply (Ofgem, N/A).
UK Shared Prosperity Fund
The UK Shared Prosperity Fund (USPF) is designed to drive economic growth by enabling local communities to access targeted investment. An additional £900 million has been allocated for local projects, with funding available for initiatives running from 1 April 2025 to 31 March 2026. This includes support for both new and ongoing activities that align with regional development objectives (Gov.UK, 2025).
COMPARISON TABLE: UK SOLAR PANEL GRANTS
Grant Scheme | Description | Funding/Benefit | ROI Impact | Application Link/Resource |
Industrial Energy Transformation Fund (IETF) | Supports energy-intensive businesses to reduce costs and carbon emissions. | £500 million until 2028 | Shortens payback period | |
Public Sector Decarbonisation Scheme (PSDS) | Funds low-carbon upgrades for public sector buildings. | Ongoing funding to 2028 | Major savings on energy bills | |
Smart Export Guarantee (SEG) | Pays businesses for surplus low-carbon electricity exported to the grid. | Variable rates per kWh exported | Ongoing revenue | |
Renewable Energy Guarantees of Origin (REGO) | Certifies renewable electricity generation, aiding compliance and transparency. | 1 REGO per MWh generated | Indirect benefit | |
UK Shared Prosperity Fund (USPF) | Local investment for economic growth and sustainability projects. | £900 million for 2025-2026 | Reduces upfront costs |
FINANCE ALTERNATIVES FOR BUSINESSES IN THE UK
There are financial alternatives for commercial businesses in the UK, such as Power Purchase Agreements (PPA), Asset Finance & Hire Purchase, Outright Purchase (CapEx), and Operating Lease, so that when tax reliefs or grants don’t pull through, you can find a sufficient alternative to support the opportunity of installing renewable energy systems.
Power Purchase Agreements (PPA)
A Power Purchase Agreement (PPA) allows your business to benefit from a fully funded commercial solar PV system without any upfront capital expenditure. Your business purchases the generated electricity at a fixed rate per kilowatt-hour, typically 15% to 30% and the investor recoups their investment through these electricity payments over a contract period, generally ranging from 15 to 25 years (solarpanelsforbusinesses, N/A).
Asset Finance & Hire Purchase
For an Asset Finance & Hire Purchase, a finance company buys the system; you make monthly payments over 5-10 years. The assets technically belong to the finance company until the final payment is made, then the ownership transfers to you. The monthly payment is lower than what you would pay for a properly sized system. (solarpanelsforbusinesses, N/A).
Outright Purchase (CapEx)
An Outright Purchase (CapEx) allows your business to acquire a solar PV system by paying the full cost upfront, either through your own capital or a bank facility. This approach enables you to access available grants, secure full ownership of the system, and benefit from the entire long-term return on investment (spiritenergy, N/A).
Operating Lease
A third-party lessor procures and owns the commercial solar PV system, which is then leased to your business for a fixed monthly payment over a typical term of 7 to 10 years. The system remains on the lessor’s balance sheet, ensuring your company’s balance sheet remains unaffected (solarpanelsforbusinesses, N/A).
WHAT ARE YOU NEXT STEPS?
If you are exploring commercial grants for solar panels, we offer a free, no-obligation desktop consultation to help your business understand the best funding opportunities, projected returns, and scheme eligibility.
To get started, consider which solar panel grants for businesses may be available to you, these opportunities can release additional savings and help your business expand its investment in renewable energy.
Simply get in touch to arrange your bespoke analysis with our team of renewable energy specialists: https://excelenergy.co.uk/project-enquiry/