Commercial Solar Grants & Funding UK 2026

All Commercial Solar Grants and Incentives — Summary Table

Scheme	Sector	Type	Value	Status 2026
Annual Investment Allowance (AIA)	All businesses	Tax relief	100% Year 1, up to £1M	Open
0% VAT	All	Tax saving	20% saving vs standard	Permanent
IETF (Industrial)	Manufacturing, ESOS-obligated	Capital grant	30–55% of capital cost	Open
Salix Finance	Public sector	0% interest loan	Up to 100% of project cost	Open
PSDS (Public Sector)	NHS, councils, schools	Capital grant	25–50% of capital cost	Round-based
FETF (Farming)	Registered farmers (England)	Capital grant	25%, max £25,000	Open
Business Rates Exemption	All commercial	Ongoing saving	No rateable value increase	Permanent
Smart Export Guarantee (SEG)	All with export	Revenue	4–20p/kWh exported	Ongoing
Scottish Enterprise Grants	Scottish businesses	Capital grant	Up to 30% (manufacturers)	Varies
Welsh Government (NNDR exemption)	Welsh businesses	Rates relief	100% exemption on solar	Permanent

Annual Investment Allowance (AIA) — The Universal Grant

The Annual Investment Allowance (AIA) is the single most valuable incentive for commercial solar across all UK business sectors. It provides 100% tax relief on the full cost of the solar installation in Year 1 — up to the AIA limit of £1M per business per year.

How it works: your corporation tax bill is reduced by the AIA amount. At a 25% corporation tax rate, a £200,000 solar installation generates a £50,000 tax saving in Year 1. This effectively reduces your net project cost to £150,000 — a 25% grant equivalent. For businesses paying the 19% small profits rate, the effective saving is £38,000 on the same project.

AIA can be combined with all other grants — IETF, FETF, Salix, and PSDS grants reduce the capital cost, and AIA then applies to the post-grant balance. This stacking can reduce effective project cost by 40–65% for eligible businesses.

AIA does not need to be applied for — it is claimed through your annual corporation tax return (form CT600). Your accountant handles the claim. We provide the relevant documentation (MCS certificate, commissioning date, capital cost breakdown) required to support the claim.

Industrial Energy Transformation Fund (IETF)

The IETF is a UK government capital grant programme specifically for manufacturing and industrial businesses. It provides some of the most generous solar grants available to any sector.

IETF Phase 1 — Feasibility Studies

Covers up to 55% of costs for energy audits, feasibility studies, and engineering assessments. Minimum grant: £25,000. Applications are processed quarterly. Suitable for manufacturers considering significant energy projects who need to de-risk the feasibility stage.

IETF Phase 2 — Industrial Decarbonisation

Capital grants of 30–55% for the installation of energy-efficiency and decarbonisation technologies, including solar PV systems. Minimum grant: £100,000 (minimum project: £200,000+). Eligibility requires ESOS obligation (250+ employees or £50M+ turnover) and demonstration that the solar system will reduce process energy consumption.

IETF application timeline: Pre-application registration → Expression of Interest → Full Application → Award → Delivery. Full process takes 6–9 months. We assist with IETF applications and have successfully secured funding for manufacturing clients.

Salix Finance — 0% Loans for Public Sector

Salix Finance provides interest-free loans to public sector organisations in England for energy efficiency investments, including solar PV. Organisations eligible include local authorities, NHS trusts and foundation trusts, higher education institutions, further education colleges, and maintained schools.

Key Salix features:

• 0% interest — borrow the full project cost, repay from energy savings
• Repayment period matched to project payback (typically 3–10 years)
• No security required
• Can be combined with Salix-funded works from multiple schemes (PSDS, LSAP, etc.)
• Available from £30,000 to multi-million pound projects

A school borrowing £120,000 for a 100kWp solar system at 0% interest repays the loan from energy savings of ~£26,000/year. Salix Finance makes school and NHS solar effectively cost-neutral from day one.

Public Sector Decarbonisation Scheme (PSDS)

The PSDS is a capital grants programme for public sector buildings in England, providing non-repayable grants for heat decarbonisation and low-carbon heating measures. Solar PV qualifies as an enabling measure when combined with heat pump or low-carbon heating installation. Grant rates vary by scheme round — Phases 3 and 4 offered 25–50% capital grants. New rounds are announced periodically via BEIS/DESNZ.

For NHS trusts, councils, and schools undertaking heat pump projects alongside solar, PSDS funding can be substantial. We work with public sector clients to structure projects to maximise PSDS + Salix + AIA stacking.

Farming Equipment and Technology Fund (FETF)

The FETF provides 25% capital grants for registered farmers in England for approved agricultural equipment, including solar PV systems for farm use. Maximum grant per application is £25,000. Applications are competitive and funding is allocated in rounds. The solar system must primarily serve an agricultural purpose — milking, ventilation, grain drying, general farm power — not function primarily as a commercial generation asset.

Scottish, Welsh, and Northern Irish farmers have equivalent schemes (Scottish Rural Development Programme, Sustainable Farming Scheme in Wales, and DAERA grants in Northern Ireland). We advise on eligibility across all four nations.

Smart Export Guarantee (SEG) — Ongoing Solar Revenue

The Smart Export Guarantee requires licensed electricity suppliers to offer an export tariff to solar owners who export electricity to the grid. SEG tariffs range from 4p/kWh (minimum) to 20p/kWh+ (Octopus Agile, which varies by time of day). For commercial solar with export enabled, SEG generates meaningful ongoing revenue.

To access SEG, your system must be: MCS certified, under 5MWp, and equipped with an export meter. Most G99-approved systems automatically qualify. We register clients for SEG as part of our commissioning process. The best SEG tariffs for commercial sites in 2026 are typically: Octopus Energy (Agile SEG, averaging 8–15p/kWh), Ripple Energy (fixed 12p/kWh), and EDF Energy (fixed 6p/kWh). Actual income depends on export volume and chosen tariff.

Stacking Multiple Incentives — Example

A Midlands food manufacturer installs a 300kWp solar system costing £235,000. Here's how incentives stack:

• IETF Phase 2 grant (40% of cost): –£94,000
• Remaining capital after IETF: £141,000
• 0% VAT (included above — vs 20% standard rate saving): –£47,000 effective saving
• AIA at 25% corporation tax on £141,000: –£35,250 Year 1 tax saving
• Business rates exemption (ongoing): –£4,000/yr
• Effective net cost in Year 1: approximately £105,750 (vs £235,000 gross)
• Annual energy saving: £83,000/yr
• Effective payback: 1.3 years