AIA RELIEF — SMALL
50 kWp
from £34,995
Net cost after AIA tax relief: roughly £27,995 (assumes 19–25% corporation tax band). Saves ~£15,000/year on electricity. Combined effective payback under 2 years.
Enquire COMMERCIAL · UK FUNDING + INCENTIVES
Business grants for commercial solar panels.
What's actually available in 2026 for UK businesses wanting to reduce the capital cost of solar PV — Annual Investment Allowance (the biggest single relief), Full Expensing, UK Shared Prosperity Fund (UKSPF), Public Sector Decarbonisation Scheme (PSDS), regional council grants, and which combinations apply to your sector. Honest, up-to-date guide; no clickbait.
EPC commercial installer · Grant application support · Capital allowances guidance with your accountant · Bankable-grade ROI projections · MCS/NAPIT accredited · 5-year insurance-backed workmanship warranty
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ABOUT UK SOLAR GRANTS + INCENTIVES
Capital allowances first, grants layered on top.
The single biggest financial relief for UK commercial solar in 2026 isn't a grant — it's a tax allowance. The Annual Investment Allowance (AIA) lets your business deduct 100% of qualifying solar PV expenditure from taxable profits in the year of purchase, up to £1 million per business per year. For a typical 100 kWp install at £69,995, AIA delivers £14,000-£18,000 of effective tax relief depending on your corporation-tax band — roughly 20% off the installed cost. Most UK businesses qualify and most accountants will claim it as part of year-end accounts with no separate application required.
On top of capital allowances, a smaller layer of grant-style funding is available depending on your sector and region: UK Shared Prosperity Fund (UKSPF) SME business-energy grants (£5k-£50k typical), Public Sector Decarbonisation Scheme (PSDS) for schools/NHS/council buildings, regional council net-zero grants, and sector-specific schemes (Sustainable Farming Incentive for agriculture, various manufacturing productivity grants). National capital-grant schemes that ran through the 2010s — Feed-in Tariff, Enhanced Capital Allowance, Renewable Heat Incentive — have all closed.
The economic case for commercial solar in 2026 is built primarily on three pillars: capital allowances (~20% relief), energy-cost savings (60-90% self-consumption at retail import price) and export income via SEG (5-15p/kWh). Grants add a fourth layer worth claiming where available, but they're rarely the deal-maker. At Future Power Team we build the full financial model into every commercial quote so you can see capital allowances, grant eligibility, energy savings and export income side-by-side. Request a free site survey and we'll deliver a bankable model your accountant + finance partner can verify.
Finance available — spread the cost over 3–10 years from 10.9% APR Representative with Phoenix Financial Consultants. See finance options →
NET COST AFTER TAX RELIEF
Three reference points, net of capital allowances.
The headline price is rarely what your business actually pays. Capital allowances (AIA / Full Expensing) deliver ~20% relief via reduced corporation tax — the figures below show the net cost after the most common AIA scenario. We model every quote with your specific corporation-tax band and additional grant eligibility.
Most popular
AIA RELIEF — MEDIUM
100 kWp
from £69,995
Net cost after AIA tax relief: roughly £55,995. Saves ~£30,000/year. Combined effective payback under 2 years. AIA cap (£1m/business/year) easily covers a system this size.
EnquireAIA + FULL EXPENSING
250 kWp+
P.O.E.
For installs above the AIA cap, Full Expensing (permanent from April 2026) provides continued 100% first-year deduction on main-pool plant. Effective payback 1.5–3 years depending on tax position and self-consumption.
EnquireNet-cost figures assume 19–25% corporation tax band and full AIA claim within the £1m annual cap. Actual net cost varies with your tax position, grant award if any, and timing of capital expenditure relative to year-end. Always confirm with your accountant before relying on a net-of-tax projection.
FOUR FINANCIAL LEVERS
Stacking capital allowances, grants and revenue streams.
UK commercial solar financing is rarely just one mechanism — most projects combine 2-3 reliefs and revenue streams. The four levers below cover almost every scenario we model in 2026.
01
AIA — the single biggest commercial solar relief
The Annual Investment Allowance lets your business deduct 100% of qualifying solar PV expenditure from taxable profits in the year of purchase, up to £1 million per business per year. For a 100 kWp install at £69,995, that's roughly £14,000-£18,000 cash-back via reduced corporation tax (depending on your band). Most businesses get the full relief.
02
Full Expensing for installs above AIA cap
For larger systems above the £1m AIA cap (or where your business has used AIA on other plant), Full Expensing (announced 2023, made permanent April 2026) provides continued 100% first-year deduction on main-pool plant and machinery. Solar PV qualifies. Combined AIA + Full Expensing means almost every UK commercial solar install gets full first-year tax relief.
03
UKSPF and Public Sector Decarbonisation Scheme
For public-sector estates (schools, GP surgeries, council buildings, social housing) PSDS provides direct capital grants for low-carbon heat AND solar. For SMEs in eligible LEP regions, UKSPF includes rolling business-energy grants — typical award £5,000-£50,000 with co-funding requirement. We've supported applications under both schemes.
04
Regional council + DNO programmes
Many local councils run small business energy grants under their net-zero plans — typical £2,000-£25,000. Northern Powergrid and other DNOs occasionally fund customer-side reinforcement that benefits exporters. Industry-specific schemes (Sustainable Farming Incentive for agriculture, Productivity & Growth grants for manufacturing) layer on top. We track current schemes quarterly.
FUNDING ROUTES MAPPED
Six routes we actually see businesses use.
Different business structures access different routes — limited companies typically lead with capital allowances, public-sector estates with PSDS, SMEs in eligible regions add UKSPF. We map your specific eligibility in every quote.
CAPITAL ALLOWANCES (AIA + FULL EXPENSING)
The default route for most businesses
Almost every UK commercial solar install above £25,000 should be claiming AIA. 100% first-year deduction against taxable profits, no application form, no co-funding requirement. Your accountant handles it as part of year-end accounts. Net effect: ~20% reduction in installed cost.
See capital allowances guide → UKSPF (UK SHARED PROSPERITY FUND)
Regional business energy grants
UKSPF replaced EU funding from 2022. Many Local Enterprise Partnerships run rolling SME business-energy grant schemes under UKSPF — typically £5,000-£50,000 with 30-50% co-funding requirement. Eligibility varies by region; some require energy-intensive industry, some don't.
See UKSPF detail → PUBLIC SECTOR DECARBONISATION
PSDS for schools, GP surgeries, councils
The Public Sector Decarbonisation Scheme (PSDS) provides direct capital grants for low-carbon heat AND solar PV on public-sector buildings. Phase 4 ran through 2025 with £230m awarded; Phase 5 is open for applications. Schools, NHS estates, council buildings and university campuses all eligible.
FINANCING (LEASE-PURCHASE + PPA)
Zero-CapEx routes
Not technically a 'grant' but functionally similar — lease-purchase agreements spread cost over 5-10 years and can be modelled cashflow-neutral. Power Purchase Agreements (PPAs) let a third party own the system; you buy electricity at below-grid rates with no upfront cost.
See lease + PPA options → SECTOR-SPECIFIC SCHEMES
Farming, manufacturing, hospitality
Sector-specific schemes include the Sustainable Farming Incentive (SFI) for agriculture (includes renewable energy provisions), Productivity & Growth grants for manufacturing, and Net Zero Hub regional programmes for high-energy SMEs. Eligibility varies; we help identify which schemes apply.
EXPORT INCOME — SEG + CAPACITY MARKET
Ongoing revenue streams
Not a grant but a revenue offset: the Smart Export Guarantee (SEG) means every supplier offers payment for surplus solar exported to the grid (5-15p/kWh typically). Systems above 1 MW can access the Capacity Market and Balancing Mechanism for additional grid-services revenue. Worth modelling on larger projects.
YORKSHIRE-WIDE GRANT SUPPORT
Active UKSPF + PSDS schemes across Yorkshire.
Yorkshire businesses have several active UKSPF programmes in 2026 — every Local Enterprise Partnership (West Yorkshire LEP, Leeds City Region, Sheffield City Region, York & North Yorkshire LEP, Humber LEP) administers UKSPF differently. Some run rolling-decision SME energy grants with 4-6 week decision times; others run annual competitive rounds. West Yorkshire and Sheffield have particularly active programmes targeting energy-intensive SMEs.
Yorkshire's public-sector estate is also a major PSDS Phase 5 target — Leeds Beckett, University of York, multiple NHS trusts, Sheffield City Council and several large multi-academy trusts have all secured 2024-2025 PSDS funding for combined solar + heat-pump decarbonisation projects. We've delivered the technical inputs (drone surveys, PVsyst yield models, ROI projections) for multiple successful Yorkshire PSDS applications.
For agricultural businesses, the Sustainable Farming Incentive (SFI) renewable-energy provisions are the main route, often combined with AIA capital allowances on the limited-company or partnership farming entity. See our farms & agriculture page for the agricultural-specific detail and our capital allowances guide for the AIA/Full Expensing mechanics. For zero-CapEx routes, see our PPA + lease-purchase guide. Or browse the commercial hub for the full picture.
YOUR LOCAL COMMERCIAL SOLAR INSTALLER
Commercial solar across Yorkshire.
Leeds
COMMERCIAL SOLAR →
Sheffield
COMMERCIAL SOLAR →
York
COMMERCIAL SOLAR →
Harrogate
COMMERCIAL SOLAR →
Wakefield
COMMERCIAL SOLAR →
Barnsley
COMMERCIAL SOLAR →
Doncaster
COMMERCIAL SOLAR →
Bradford
COMMERCIAL SOLAR →
Hull
COMMERCIAL SOLAR →
Wetherby
COMMERCIAL SOLAR →
Stockton-on-Tees
COMMERCIAL SOLAR →
Middlesbrough
COMMERCIAL SOLAR →
Manchester
COMMERCIAL SOLAR →
INDUSTRY-LEADING BRANDS
We work with the brands you can trust.
We work across a full range of leading brand partners — picking what fits your home, your tariff and your roof. Same install standard whichever you choose.
See all 19 brand pages
GRANTS & FUNDING FAQS
The questions we get most on funding.
Honest answers about UK solar grants in 2026 — what's actually available, what's closed, what AIA + Full Expensing deliver, how UKSPF and PSDS applications work, can grants and capital allowances stack, what VAT applies to commercial solar.
Request a funding-modelled quoteWhat grants are available for commercial solar panels in the UK in 2026?
In 2026, the biggest single relief is capital allowances — Annual Investment Allowance (AIA) up to £1m/business/year + Full Expensing above that — delivering ~20% effective cost reduction via corporation-tax relief. On top, regional UKSPF (UK Shared Prosperity Fund) grants offer £5k-£50k for eligible SMEs; PSDS (Public Sector Decarbonisation Scheme) Phase 5 funds public-sector solar; SFI includes renewable provisions for farms. Most national capital-grant schemes (the old Feed-in Tariff, Enhanced Capital Allowance) have closed — capital allowances and regional UKSPF are the main routes now.
Can I claim the Annual Investment Allowance on commercial solar panels?
Yes — almost every UK commercial solar installation qualifies for AIA. The system must be (a) plant and machinery for trade purposes (solar PV qualifies), (b) within the £1 million annual cap (most installs are well below), (c) the purchasing entity must be a UK business with taxable profits. Your accountant claims AIA as part of year-end accounts — no separate application. Effective relief is your corporation-tax rate × installation cost (typically £14-£18 for every £69 spent on a 100 kWp system).
How does Full Expensing work for solar above the AIA cap?
Full Expensing (announced 2023 Spring Budget, made permanent April 2026) provides continued 100% first-year deduction on main-pool plant and machinery for limited companies, with no annual cap. Solar PV qualifies as main-pool plant. Practical effect: if you spend £2m on a large industrial array, you can deduct the full £2m from taxable profits in year 1 — saving up to £500,000 in corporation tax for a profitable enterprise.
What is the UK Shared Prosperity Fund (UKSPF) for solar?
UKSPF replaced EU structural funds from 2022. Distribution is via Local Enterprise Partnerships (LEPs) and local councils — every region runs its own programmes. Many include rolling business-energy grant schemes that fund 30-50% of an SME solar installation, with award sizes typically £5,000-£50,000. Eligibility varies (some require energy-intensive industry, some target rural SMEs, some are open to all SMEs in priority sectors). We track current UKSPF schemes by region and quarter.
My business is in the public sector — what about PSDS?
The Public Sector Decarbonisation Scheme (PSDS) provides direct capital grants for low-carbon heating AND solar PV on public-sector buildings. Phase 4 (2023-2025) awarded £230m. Phase 5 (open for applications through 2026) follows similar structure: schools, NHS estates, council buildings, university campuses, prisons all eligible. Awards range from £100k-£5m+ for whole-estate decarbonisation projects. We've supported several PSDS applications and can help with the technical inputs.
Are there agricultural-specific grants for solar?
The Sustainable Farming Incentive (SFI) includes provisions for renewable energy as part of the wider environmental package — payment rates vary by tier. The Rural Energy Scheme that ran through the 2010s has closed. Some regional schemes (Yorkshire Rural Support Network, Pennine Lancashire Energy Hub) offer farm-specific energy grants. AIA capital allowances apply to limited-company farms and partnerships; sole-trader farms get the same effective relief via Schedule D. See our farms page for sector-specific detail.
Can I combine grants with capital allowances?
Yes — capital allowances (AIA/Full Expensing) apply to the net cost you actually pay, after any grant award. So if you receive a £20,000 UKSPF grant on a £100,000 install, you claim AIA on the £80,000 net spend. Effective relief stacks: the grant covers 20%, AIA covers ~20% of the remainder via tax relief. Combined: roughly 36% effective reduction off the gross installed cost. We model this in every commercial quote.
How long does a UKSPF or PSDS grant application take?
PSDS Phase 5 applications typically take 4-8 weeks from submission to decision. UKSPF varies by LEP — some run monthly rolling-decision schemes (decision in 4-6 weeks), some run annual competitive rounds (4-6 months). The application work itself (technical inputs, financial modelling, ESG reporting) is 1-2 weeks. We handle the technical-input documentation for any commercial customer applying for either scheme.
Do I have to repay a UK solar grant if I sell the building?
Depends on the scheme. UKSPF grants typically have a 3-5 year clawback clause — if you sell the building or wind up the business inside that window, a pro-rata portion may need repaying. PSDS for public-sector estates: solar must remain operational for the full design life (25+ years) but the relevant public body holds the asset, so practical clawback rarely applies. AIA capital allowances: no clawback if sold; you simply transfer the writing-down balance to the new owner via the sale paperwork.
What's the catch with zero-CapEx PPAs vs buying outright?
PPAs (Power Purchase Agreements) let a third party install and own the solar system on your roof; you buy the electricity at a below-grid rate (typically 7-12p/kWh) on a 10-25 year contract. Pros: no upfront cost, no maintenance responsibility, immediate energy-cost saving. Cons: you don't capture the capital allowances (the asset-owner does), you're tied into a long contract, and the lifetime savings are smaller than if you'd financed and owned outright. Best fit for businesses that can't access capital allowances or prefer to preserve cash for operations.
Can I claim VAT back on a commercial solar installation?
Most commercial solar PV is now zero-rated for VAT (the 2022 Spring Statement extended the zero-rated regime for "energy-saving materials" on commercial properties through to 2027 in many cases). Where standard VAT applies, VAT-registered businesses recover it as input tax in the normal way. Net effect: most commercial solar quotes show prices ex-VAT because the VAT is either zero-rated or fully recoverable.
Does Future Power Team help with the grant application paperwork?
We're solar EPC contractors, not grant-funding consultants — but we provide every technical input a grant application needs: drone-modelled site survey, PVsyst-grade yield projection, 25-year energy-savings forecast, CO2 savings calculation, ESG impact summary. We work alongside specialist grant consultants on PSDS and large UKSPF applications. For straightforward AIA / Full Expensing claims (the default for most businesses), your accountant handles it — we provide the cost breakdown and asset register in a format they can drop straight into your year-end accounts.
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