IETF Phase 3
IETF Phase 3 Solar Grant — Industrial Decarbonisation
Industrial Energy Transformation Fund Phase 3 supports UK manufacturers to electrify and decarbonise. Solar PV (alongside heat pumps, electric process heat) is grant-eligible at 30–60% of capital cost.
£500m
Phase 3 budget
30–60%
Grant intensity
Manufacturing
Sector focus
2026–2028
Phase 3 window
The Industrial Energy Transformation Fund (IETF) Phase 3 is the UK government's flagship industrial decarbonisation grant scheme. £500m of capital funding supports manufacturers to electrify process heat, install on-site renewables, and improve energy efficiency. Solar PV is grant-eligible at 30–60% of capital cost when integrated with broader decarbonisation projects.
What IETF Phase 3 Funds
- Industrial heat pumps (commercial / industrial scale)
- Electric process heat systems (electrode boilers, infrared heaters, induction)
- Heat recovery technology
- Solar PV when integrated with above (provides renewable electricity for the new electrified loads)
- Battery storage when integrated with solar + electrified loads
- Energy efficiency upgrades (insulation, BMS, motor efficiency)
- Compressed air system upgrades
- Waste heat recovery
Eligibility — Who Can Apply
- UK-based manufacturing or industrial businesses
- SIC codes in manufacturing (10–33)
- Sites with existing energy demand above defined thresholds
- Project must demonstrate decarbonisation impact (typically 25%+ reduction in site emissions)
- Project must demonstrate cost-effectiveness on £/tCO2 abated
Grant Intensity — How Much You Can Claim
- Small enterprises: up to 60% of eligible capital
- Medium enterprises: up to 50% of eligible capital
- Large enterprises: up to 30% of eligible capital
- Defined under EU State Aid framework (retained UK law)
- Maximum grant per project typically £14m
What a Typical IETF + Solar Project Looks Like
Example — UK food manufacturer, mid-size enterprise:
- Existing: gas-fired process heat (steam boiler), grid electricity for cooling and motors.
- Project: 800kW rooftop solar PV + 1.5MW heat pump replacing gas boiler + battery storage.
- Total capital: £2.4m
- IETF Phase 3 grant (50%): £1.2m
- Net business capital: £1.2m
- Annual saving: £450,000 (gas displacement + electricity bill reduction)
- Net payback (post-grant): 2.7 years
- CO2 reduction: ~1,200 tCO2/year
Application Process
- Pre-application engagement — discuss project with IETF technical team.
- Concept submission — short proposal, technical specification, cost-effectiveness modelling.
- Stage 1 application — full project proposal, including SAP / energy model, cost breakdown, decarbonisation metrics.
- Stage 2 application — final commercial terms, financial due diligence, consortium agreement.
- Award and grant agreement — typically 4–6 months from concept submission.
- Project delivery — typically 12–24 months after award.
- Post-installation reporting — verified energy and emissions data submitted to track grant outcomes.
How We Support IETF Applications
- Technical project design including solar + heat pump integration
- Energy modelling and decarbonisation impact calculation
- Cost-effectiveness analysis (£/tCO2 abated)
- Stage 1 + Stage 2 application support
- Project delivery to IETF specifications
- Post-installation monitoring and verification
Frequently Asked Questions
Can solar alone qualify for IETF Phase 3?
Solar PV alone is generally not IETF-funded — IETF targets industrial decarbonisation projects. Solar qualifies when integrated with electrification of process heat (heat pumps, electrode boilers) where it provides renewable electricity for the new loads.
How much is IETF Phase 3?
Phase 3 budget is approximately £500m of capital grant, awarded over 2026–2028 in competitive funding rounds.
What grant intensity does IETF Phase 3 offer?
Up to 60% for small enterprises, 50% for medium, 30% for large. Maximum grant per project typically £14m.
Who is eligible for IETF Phase 3?
UK-based manufacturing or industrial businesses (SIC 10–33). Project must demonstrate meaningful decarbonisation impact (typically 25%+ site emissions reduction) and cost-effectiveness.
How long does the IETF application process take?
Concept-to-award typically 4–6 months. Project delivery typically 12–24 months after award. Post-installation verification continues for 2–3 years.
Related Guides
Ready to Reduce Your Energy Costs?
Join hundreds of UK businesses already benefiting from commercial solar. Get your free site survey and quote today.
MCS Certified | 25-Year Warranty | Nationwide Coverage