Government Grants for Solar Panels: Are You Eligible as a UK Business?

Direct government grants for solar panels are limited for UK private-sector businesses in 2026. Most companies reduce the cost of commercial solar through capital allowances, the business rates exemption for onsite renewables in England, Smart Export Guarantee payments and devolved loan schemes in Scotland and Wales. Grant funding mainly goes to schools, NHS sites, community energy groups and small council schemes.

This guide is for business owners, finance directors, facilities managers and public-sector estates teams weighing up commercial rooftop solar. It explains which UK government grants for solar panels and related incentives are open in 2026, who qualifies, which schemes have closed, how to apply, and what to do if no grant fits your site.

Key Takeaways

• Direct government grants for solar panels are scarce for UK private businesses in 2026. Most support comes through tax relief, rates relief, export payments and devolved loans.
• Capital allowances usually deliver the most value. The £1m Annual Investment Allowance can give a 100% first-year deduction; companies can also claim a 50% first-year allowance on spend above it. Full expensing and the new 40% allowance do not apply to solar.
• In England, onsite solar and battery storage are exempt from business rates until 31 March 2035.
• The Smart Export Guarantee pays for exported electricity from systems up to 5MW, but self-consumption delivers most of the savings for commercial sites.
• Grant funding is concentrated in the public sector and community energy: Great British Energy’s solar programme (up to £255m for schools, NHS and military sites) and the Local Power Plan (up to £1bn for community and local projects).
• Several schemes have closed or are household-only, including the Feed-in Tariff, new PSDS funding, UKSPF and the Warm Homes Plan. Commercial solar pays 20% VAT, normally recoverable for VAT-registered businesses.
• Apply before you commit, and remember a grant reduces your capital allowances claim.

Are There Any Government Grants for Solar Panels for UK Businesses?

Yes, but very few are cash grants that a private business can apply for directly. In 2026, UK government support for business solar comes mainly through tax relief, a business rates exemption, export payments and government-backed loans. True grant funding is concentrated in the public sector, community energy projects and time-limited local authority schemes.

The difference matters for planning. A grant lowers the upfront cost, while most business incentives improve the return after installation. For most commercial projects the business case rests on self-consumption: each kilowatt-hour (kWh) generated and used onsite is a kWh the business no longer buys from the grid. Government support strengthens that case rather than creating it.

Government grants for solar panels UK businesses can use in 2026

Most private businesses should plan their solar project around tax relief, rates relief and self-consumption savings, then treat any grant as a bonus rather than a prerequisite.

Why Does the UK Government Support Solar Energy for Businesses?

The UK government supports business solar because onsite generation helps deliver its legally binding net zero by 2050 target, its Clean Power 2030 mission and its national solar deployment goals. The government’s Solar Roadmap, published in 2025, sets out a path to 45 to 47 GW of solar capacity by 2030.

Through grants, tax treatment and regulation, the government aims to:

• Reduce reliance on fossil fuels.
• Lower energy costs for businesses.
• Support businesses in meeting sustainability and carbon reporting goals.
• Enhance national energy security.

What UK Government Grants and Incentives for Solar Panels Are Available in 2026?

The main UK government grants and incentives for solar panels in 2026 are the Smart Export Guarantee, capital allowances, the business rates exemption, Great British Energy’s public-sector programme, the Local Power Plan, devolved loan schemes and local authority grants. Each is explained below as a standalone summary.

Smart Export Guarantee (SEG)

The Smart Export Guarantee (SEG) pays businesses for surplus solar electricity exported to the grid. It is not a grant, because it pays nothing towards installation, but it adds an income stream for every kWh your system exports.

The SEG started on 1 January 2020, replacing the export element of the Feed-in Tariff (FiT), which closed to new applicants in March 2019. Under rules overseen by Ofgem:

• Licensed electricity suppliers with at least 150,000 domestic customers must offer at least one SEG tariff. Smaller suppliers can take part voluntarily.
• Suppliers set their own rates and contract lengths, but the rate must always be above zero.
• Solar PV systems up to 5MW are eligible.
• Systems up to 50kW need MCS certification (or an equivalent). Systems between 50kW and 5MW do not need MCS, but the supplier will check eligibility.
• Exports must be metered, and the installation needs an export MPAN.
• You can receive an SEG tariff from a supplier other than your import supplier, but only from one SEG licensee at a time.

For larger commercial systems, standard SEG tariffs may not reflect the value of a significant export volume, and legal advisers note that projects near the top of the small-scale range may need other routes to market.

Size the system for onsite use first and treat SEG income as secondary. Pairing solar with battery storage can shift surplus midday generation to periods when your site needs it, which is usually worth more than exporting it.

Capital Allowances: AIA and the 50% First-Year Allowance

HMRC treats solar panels as special rate plant and machinery, so most businesses can deduct up to 100% of the cost from taxable profits in the first year through the Annual Investment Allowance (AIA). Companies spending above the AIA limit can claim a 50% first-year allowance on the excess.

How the reliefs fit together in 2026:

• Special rate asset: solar expenditure has been classed as special rate since April 2012.
• Annual Investment Allowance: a 100% deduction on qualifying plant and machinery, including solar panels, up to £1 million a year. It is available to companies and unincorporated businesses.
• 50% first-year allowance: available to companies only, and made permanent at the Autumn Statement 2023. The remaining 50% goes into the special rate pool.
• Writing down allowance: the special rate pool attracts 6% a year on a reducing balance basis.
• Full expensing does not apply. HMRC guidance confirms companies cannot claim full expensing on special rate assets such as solar panels.
• Autumn Budget 2025 changes: a new 40% first-year allowance from 1 January 2026 applies to main rate assets only, so it does not cover solar. The main pool writing down allowance fell from 18% to 14% from April 2026, while the special rate pool stays at 6%.

Three practical points are often missed:

1. A grant reduces your claim. Accountants note that grant funding reduces the expenditure on which capital allowances can be claimed.
2. Use AIA on special rate items first. Because solar would otherwise sit in the slow 6% pool, allocating AIA to it before main rate assets is usually more tax-efficient.
3. Selling the asset can trigger a balancing charge if a first-year allowance was claimed.

For a profitable company, capital allowances often deliver more value than any grant available. Read our guide to capital allowances for solar investments for more detail.

Business Rates Exemption for Onsite Solar and Battery Storage

In England, plant and machinery used for onsite renewable generation and storage, including rooftop solar panels and battery storage, is exempt from business rates from 1 April 2022 until 31 March 2035.

The exemption was introduced by the Valuation for Rating (Plant and Machinery) (England) (Amendment) Regulations 2022 (SI 2022/405). It also covers storage used with electric vehicle charging points. Before it applied, the way rateable value was calculated meant businesses adding onsite generation could see rates on those investments rise by up to 500%, according to Solar Power Portal’s 2021 reporting of the business rates review.

Scottish Parliament papers show Scotland has introduced a similar exclusion for onsite renewable generation and storage running to 31 March 2035. Businesses elsewhere should check the position with their local assessor.

In England, adding solar or batteries will not increase your rates bill until 2035, which removes a cost that previously eroded payback.

Great British Energy Funding for Schools, Hospitals and Public Buildings

The largest pot of genuine solar grant funding in 2026 is going to the public sector through Great British Energy (GBE), the government-owned clean energy company.

• In March 2025 the government announced £180 million for rooftop solar on schools and hospitals as GBE’s first major project. Government estimates at the time suggested individual schools could save around £25,000 a year and NHS sites up to £45,000 a year.
• The programme was later expanded to up to £255 million, covering around 250 schools, around 260 NHS sites and around 15 military sites.
• By March 2026, 100 schools had installed solar through the scheme.
• In February 2026, DESNZ announced £74 million of clean energy upgrades for hospitals and military sites, including £9 million delivered with GBE for batteries and solar panels.

This funding is allocated through targeted programmes. Schools in areas of deprivation and NHS trusts were prioritised, and private businesses cannot apply.

Estates teams at schools, colleges and universities, hospitals and other public sector buildings should track GBE and DESNZ announcements and have feasibility work ready, because funded projects typically need to move quickly.

Local Power Plan Funding for Community Energy

The Local Power Plan, published by DESNZ and Great British Energy on 10 February 2026, commits up to £1 billion to support at least 1,000 community and local energy projects by 2030.

It provides grants and loans from feasibility through to construction for community energy groups and local authorities, including a Community Fund and a Partnership Fund for joint council and community projects. Devon County Council reported that GBE’s Capital Toolkit was due to launch in summer 2026.

Businesses cannot usually apply directly. However, community energy models can include selling locally generated electricity to nearby businesses through a power purchase agreement, and community groups may look for suitable roofs to host projects.

A business with a large roof but no appetite for capital spend could explore hosting a community-owned array, alongside commercial options such as a solar PPA.

Devolved Loan Schemes in Scotland, Wales and Northern Ireland

Scotland and Wales offer government-backed loans for business solar. These are not grants, but low-cost or interest-free finance improves cash flow while the system pays for itself.

Scotland: SME Loan Scheme. Funded by the Scottish Government and delivered by the Energy Saving Trust through Business Energy Scotland:

• Interest-free loans of up to £100,000 for renewable and energy-efficiency projects. Solar PV is an eligible technology.
• Open to small and medium-sized enterprises, charities and not-for-profit organisations, with applicants generally needing 12 months of trading.
• Cashback grants of 75% (up to £10,000 for renewable heating and up to £20,000 for energy-efficiency measures, capped at £30,000 per business) apply to listed technologies such as heat pumps and solar thermal rather than solar PV.
• Applicants need a report from Business Energy Scotland before applying.

Wales: Green Business Loan Scheme. Funded by the Welsh Government and delivered by the Development Bank of Wales:

• Loans of £1,000 to £1.5 million at discounted fixed interest rates. Solar PV is an eligible project type.
• Applicants must be based in Wales and have traded for at least two years with at least one set of filed accounts.
• The scheme was extended to £20 million in August 2025, with funding available until 2028. Up to 50% of the cost of specialist consultancy can be grant-funded.
• In September 2026, Swansea manufacturer Afon Engineering used a £200,000 loan from the scheme towards a £250,000, 329kW rooftop system.

Northern Ireland: NetRegs reports that Invest NI’s Energy Efficiency Capital Grant, which has supported onsite renewable generation, is under review.

Loan finance generally does not reduce the expenditure you can claim capital allowances on, unlike a grant, so a Scottish or Welsh business can often combine a scheme loan with AIA. See our guide to green loans for solar.

Local Authority Grants

Some councils still offer small solar or decarbonisation grants for local businesses, but availability has fallen since the UK Shared Prosperity Fund (UKSPF) ended on 31 March 2026.

UKSPF paid for many council business grants between 2022 and 2026. Typical schemes were modest, for example:

• Test Valley Borough Council offered 20% of project costs, up to £5,000, for solar on business park premises (2025/26).
• Tunbridge Wells Borough Council offered grants of up to £2,499 for decarbonisation projects including solar.
• East Devon District Council’s Carbon Action Fund distributed £586,471 to 28 businesses and community organisations.

From April 2026, UKSPF has been replaced by a Local Growth Fund targeted at specific mayoral authorities in the North and Midlands, plus the neighbourhood-level Pride in Place programme. Criteria are set locally.

Check your council and local Growth Hub before ordering, because council grants are typically first-come, first-served and cannot be awarded retrospectively. For larger commercial systems, these grants rarely change the investment decision.

Comparison Table of UK Solar Panel Incentives for Businesses

Which Government Solar Schemes Have Closed or Don’t Apply to Businesses?

Several schemes that still appear in search results are closed or aimed at households, not businesses. Checking this first avoids planning a project around funding that does not exist.

• Feed-in Tariff (FiT): closed to new applicants in March 2019 and replaced by the SEG.
• Public Sector Decarbonisation Scheme (PSDS): Salix Finance confirmed in 2025 that there will be no further investment beyond projects already awarded. Phase 3c grant funding runs to 31 March 2026 and Phase 4 to 31 March 2028.
• UK Shared Prosperity Fund: ended on 31 March 2026 (see local authority grants above).
• Warm Homes Plan: the £15 billion plan launched in January 2026 offers fully funded solar and batteries for low-income households and loans for other homeowners. It is a domestic scheme. The Building Controls Industry Association criticised it for setting out no new funding for non-domestic buildings.
• 0% VAT on solar: applies to residential accommodation only, until 31 March 2027, after which it is due to rise to 5%. Commercial installations are charged at the standard 20% rate, which VAT-registered businesses can normally recover as input tax.

Are You Eligible for a Solar Panel Grant or Incentive?

Eligibility for government solar support depends on four factors: your legal structure and sector, your location, your energy profile and the specification of your installation. Most businesses qualify for at least one incentive, even where no grant is available.

Business Type and Legal Structure

• Companies can use both the AIA and the 50% first-year allowance.
• Sole traders and partnerships can use the AIA but not the 50% first-year allowance.
• SMEs, charities and not-for-profits are the main audience for the Scotland SME Loan Scheme and most council grants.
• Public sector organisations such as schools, hospitals and councils are the focus of Great British Energy funding.
• Community energy groups are the focus of the Local Power Plan.

Location

• England: business rates exemption for onsite solar and storage until 2035.
• Scotland: SME Loan Scheme and a similar rates exclusion.
• Wales: Green Business Loan Scheme.
• All areas: SEG (Great Britain), capital allowances (UK-wide) and any council schemes running locally.

Energy Consumption and Usage Profile

• Sites with strong daytime demand (manufacturing, cold storage, offices, retail) use most of their generation onsite, which delivers the largest bill savings.
• Sites with low daytime or weekend demand export more, so SEG terms matter more for them.
• Sites with evening or night demand can use battery storage to move surplus generation to when it is needed.
• Gather 12 months of half-hourly consumption data where possible. It is the single most useful input for sizing a system and supporting any funding application.

Type of Solar Installation and Technical Requirements

• Installation type: government incentives are generally the same whether you install roof-mounted solar panels, ground-mounted solar or solar carports. The choice should follow your site, not the funding.
• Certification: systems up to 50kW need MCS certification (or equivalent) to receive SEG payments, and grant schemes commonly require MCS-certified installers.
• Planning: since 21 December 2023, permitted development rights in England no longer cap non-domestic rooftop solar at 1MW, so large rooftop arrays can often proceed without a full planning application. Conditions still apply, including in conservation areas, and some councils require a prior approval application. Solar carports can also fall under permitted development where they are more than 10 metres from homes.
• Grid connection: your Distribution Network Operator (DNO) must approve the connection, typically under Engineering Recommendation G98 or G99. Grid capacity, rather than planning, is now often the deciding constraint for large commercial roofs.
• Leased premises: landlord consent and roof condition need confirming before funding applications.

How Do You Apply for Government Solar Funding? A Step-by-Step Guide

To claim government support for business solar, confirm which routes fit your organisation, complete a feasibility study, apply for any grant or loan before committing to the installation, then claim export payments and tax relief after commissioning.

1. Identify your eligible routes. Use the eligibility factors above to shortlist schemes. Check gov.uk, your council website, your local Growth Hub and, in Scotland or Wales, Business Energy Scotland or the Development Bank of Wales.
2. Commission a feasibility assessment. A solar feasibility assessment should cover energy data, roof or land survey, structural capacity, DNO capacity, projected generation, carbon savings and financial modelling.
3. Prepare your documentation. Commonly required documents include:
   • Business registration details: proof of incorporation or VAT registration.
   • Energy usage reports: recent utility bills, half-hourly data or energy audits.
   • Solar installation plans: technical specifications, quotes and supplier agreements.
   • Financial statements: filed accounts or tax returns where a loan or grant requires them.
   • Sustainability commitment: some schemes ask for a carbon reduction or decarbonisation plan.
4. Apply before you commit. Council grants are generally not awarded retrospectively, and the Scotland SME Loan Scheme requires a Business Energy Scotland report before application. If applying for several schemes, check whether they can be combined.
5. Install with accredited specialists. Use an MCS-certified installer where required, secure DNO approval and keep commissioning records.
6. Register for the SEG. Choose an SEG licensee, provide your MCS certificate (or other eligibility evidence for systems above 50kW) and export meter details.
7. Claim tax relief. Include the expenditure in your corporation tax or self-assessment return for the period in which it was incurred, keep invoices, and note any grant received, because it reduces the claimable amount.

How Much Does Commercial Solar Cost, and How Does Government Support Affect Payback?

Commercial solar costs less per kilowatt as systems get larger. DESNZ cost data for 2024/25 recorded a median installed cost of £1,256 per kW for MCS-registered systems of 10kW to 50kW, down 11% on the previous year, and found non-domestic installations cost less per kW on average than domestic ones. DESNZ publishes this data only for systems up to 50kW, so larger commercial systems are priced site by site.

Government support affects payback in three ways: tax relief reduces the net cost, the rates exemption (in England) removes a running cost, and SEG payments add income from exports.

Lower Energy Bills

Generating electricity onsite reduces the amount your business buys from the grid, and it gives more price stability than relying entirely on market rates. For businesses with high daytime energy demand, such as manufacturing facilities, warehouses or large office buildings, these savings build over a system lifespan that typically runs to 25 years or more.

Payback and Return on Investment

Payback depends on system cost, how much generation is used onsite, your electricity tariff and your tax position. In EvoEnergy’s experience, commercial systems that use most of their output onsite often pay back within five to ten years, and continue generating for decades after that.

Capital allowances, the business rates exemption and SEG income can each shorten that period.

Income From Exported Electricity

Under the Smart Export Guarantee, surplus electricity earns a payment per kWh at the rate set by your chosen supplier. Businesses that operate mainly during daylight hours export less and save more, because self-consumed electricity is usually worth more than exported electricity.

Property Value and EPC Ratings

Onsite renewable generation can make commercial buildings more attractive to buyers and tenants with sustainability commitments, because it lowers operating costs. It can also improve a building’s Energy Performance Certificate (EPC) rating, which matters for landlords facing minimum energy efficiency standards.

What Are the Alternatives if Your Business Doesn’t Qualify for a Grant?

If no grant fits, most businesses can still install solar through outright purchase, a power purchase agreement, a lease or a green loan. The right choice depends on your capital budget, tax position and whether you want to own the system.

How Can EvoEnergy Help Your Business Secure Solar Funding?

Navigating government grants for solar panels means understanding eligibility, gathering evidence and meeting technical requirements. EvoEnergy supports businesses through each stage:

• Funding and feasibility review: we assess your energy needs, location and sector to identify which grants, loans and tax reliefs apply, and model payback with and without each one.
• Tailored system design: rooftop solar for large flat or pitched roofs, ground-mounted solar for open land, solar carports for car parks, and battery storage to increase self-consumption.
• Installation and compliance: accredited in-house delivery, DNO applications and the documentation needed for SEG registration and tax claims.
• Monitoring and maintenance: real-time monitoring and scheduled servicing to protect performance and continued SEG eligibility.

See how this works in practice in our case studies, including rooftop solar at Aldi’s Bardon distribution centre, solar PV for Howdens’ manufacturing facility and solar carport design for NHS estates.

Calculate Your Potential Savings

EvoEnergy’s Solar Output Calculator estimates how much a solar PV system could generate on your site. Enter details about your energy use and available roof space to see potential cost savings, return on investment and CO₂ reduction.

Ready to check which funding routes apply to your business? Contact EvoEnergy for a free consultation covering feasibility, funding and finance options.

Frequently Asked Questions

Are the government giving grants for solar panels to businesses in 2026?

Only in limited cases. Cash grants for solar mainly go to schools, NHS sites and military sites through Great British Energy, community energy groups through the Local Power Plan, and small local authority schemes. Most private businesses are supported through capital allowances, the business rates exemption in England, Smart Export Guarantee payments and, in Scotland and Wales, government-backed loans.

Is the Smart Export Guarantee a grant?

No. The Smart Export Guarantee pays for electricity your solar system exports to the grid, so it adds income after installation rather than reducing the upfront cost. Solar systems up to 5MW in Great Britain are eligible, and suppliers with at least 150,000 domestic customers must offer an SEG tariff. Systems up to 50kW need MCS certification or an equivalent.

Can my business claim capital allowances on solar panels?

Yes. Solar panels are special rate plant and machinery. Companies and unincorporated businesses can deduct 100% of qualifying spend up to £1 million a year through the Annual Investment Allowance. Companies can also claim a 50% first-year allowance on spend above that, with the balance relieved at 6% a year. Full expensing does not apply to solar.

Do businesses pay business rates on solar panels?

Not in England until 31 March 2035. Plant and machinery used for onsite renewable generation and storage, including rooftop solar and battery storage, has been exempt from business rates since 1 April 2022. Scotland has a similar exclusion running to the same date.

Can schools, hospitals and councils get government funding for solar panels?

Yes, this is where most grant funding is going. Great British Energy’s solar programme is worth up to £255 million, covering around 250 schools, around 260 NHS sites and around 15 military sites, with 100 schools installed by March 2026. The Public Sector Decarbonisation Scheme, however, is closed to new funding.

Is there 0% VAT on commercial solar panels?

No. The 0% VAT rate applies to solar installed in residential accommodation until 31 March 2027, after which it is due to rise to 5%. Commercial installations are charged at the standard 20% rate, which VAT-registered businesses can normally recover as input tax.

Can I combine a solar grant with capital allowances?

Yes, but the grant reduces the amount you can claim. Capital allowances apply to the expenditure your business actually bears, so a £5,000 council grant on a £50,000 system leaves £45,000 of qualifying spend. Loan finance, such as the Scotland SME Loan or Wales Green Business Loan, generally does not reduce the claim.

Do I need planning permission for solar panels on a commercial roof?

Often not in England. Since 21 December 2023, permitted development rights no longer cap non-domestic rooftop solar at 1MW, so large rooftop systems can usually proceed without a full planning application. Conditions still apply, including in conservation areas, and some councils require prior approval. DNO approval for the grid connection is still needed.