Solar panel grants & funding for UK businesses
"Are there grants for solar panels?" is one of the most-searched commercial solar questions in the UK. The honest answer: there's no nationwide grant scheme that pays for business solar outright — but there are several routes that make a project cashflow-positive from day one, and meaningful tax relief on top.
- 100% AIA tax relief
- £0 upfront options
- Rates-exempt to 2035
The short answer
Is there a UK government grant for commercial solar?
- No nationwide grant that pays for business solar outright (unlike the closed-out FiT scheme).
- Yes — significant tax relief via the Annual Investment Allowance and 50% First-Year Allowance.
- Yes — asset finance and PPAs make solar achievable with little or no capital out the door.
- Sometimes — regional / sector grants part-fund energy-saving projects (eligibility varies).
Four ways UK businesses actually pay for commercial solar
Most of our clients use a combination — for example, asset finance plus the 100% AIA in year one.
Asset finance
A UK lender pays for the install; you make fixed monthly payments while the system saves you money from day one. Often the monthly savings + export income exceed the finance payment — making the project cashflow-positive immediately.
- 5–10 year terms, subject to credit
- Treated as an operating cost (tax-efficient)
- You own the asset at end of term
- No large capital outlay
Pay upfront (CapEx) + tax allowances
Buy outright and capture both the 100% Annual Investment Allowance and the strongest long-term return. For a 25% corporation tax payer, AIA effectively gives a 25% cash-back on the project in year one.
- Best long-term IRR (typically 12–20%)
- Eligible for 100% AIA (up to £1m)
- Full ownership, all savings yours
- Strongest balance-sheet asset
Power Purchase Agreement (PPA) or solar lease
A third-party funder owns, installs and maintains the system on your roof. You buy the electricity it generates at a fixed, discounted rate — typically well below grid prices. Zero upfront cost.
- £0 capital out the door
- No maintenance, no asset to manage
- Locked-in rate for 15–25 years
- Funder takes the credit / install risk
Regional & sector grants
Devolved nations and some local authorities run grant schemes for energy-efficiency and decarbonisation projects. These are typically part-funded (10–40% of project cost), capped, and subject to competitive application windows.
- Scotland: SME Loan + Cashback Scheme (zero-interest loans + grant element)
- Wales: Business Wales energy-efficiency support
- Industrial Energy Transformation Fund (IETF) for larger industrial sites
- Local Net Zero / Levelling-Up linked schemes (sector-specific)
UK tax allowances for commercial solar
Even without a direct grant, the tax treatment of commercial solar is one of the most generous areas of UK capital allowances.
100% Annual Investment Allowance
Deduct the full cost of the install (up to £1m per year) from pre-tax profits in year one. For a corporation tax payer at 25%, that's an effective 25% reduction in real cost.
50% First-Year Allowance
Projects beyond the AIA can claim a 50% deduction on qualifying special-rate solar assets — useful for very large industrial installs.
Business rates exemption
Most new rooftop solar installations are exempt from business rates through to 31 March 2035 — solar doesn't push your rateable value up.
Smart Export Guarantee (SEG)
Not a grant, but a guaranteed income: licensed suppliers must pay you for surplus electricity exported to the grid. Commercial PPA export rates often beat SEG.
Tax treatment depends on your specific circumstances and may change. Solar Britain isn't a tax adviser — always confirm eligibility with your accountant before relying on any allowance. Grant schemes named here open and close on their own timetables; check the issuing body for current windows.
The UK government's view on commercial solar
The original Feed-in Tariff (FiT) closed to new applicants in 2019. Government policy shifted from direct subsidy to market-based mechanisms because commercial solar in the UK is now commercially viable on its own — rising grid electricity prices, falling panel costs and high daytime self-consumption mean most projects pay back in roughly 4–7 years without any grant at all.
Instead, the support is built into the tax system (AIA, 50% FYA, rates exemption) and into the finance market (asset finance, PPAs). The result: a typical commercial site can go solar with zero upfront cost and net positive cashflow from month one — often a stronger outcome than a one-off grant.
Bottom line: chasing a grant can delay your project by 6–12 months. Most UK businesses get more value by starting now with asset finance or a PPA and claiming the AIA on day one.
Common questions about UK solar funding
Are there grants for solar panels in the UK for businesses?
Not as a single nationwide scheme. The original Feed-in Tariff closed in 2019. Today, support comes through tax allowances (100% AIA, 50% FYA, business rates exemption), asset finance and PPAs, plus a patchwork of regional grants — for example Scotland's SME Loan + Cashback Scheme or the Industrial Energy Transformation Fund (IETF) for larger industrial sites.
Can I get free solar panels for my business?
Not literally free, but a Power Purchase Agreement (PPA) is the closest equivalent: a third-party funder pays for, owns and maintains the system, and you only pay for the electricity it generates at a fixed discounted rate. Zero upfront cost, no maintenance.
What is the Annual Investment Allowance worth on a solar project?
AIA lets you deduct 100% of the install cost from pre-tax profits in the year of purchase, up to £1m. For a company paying 25% corporation tax, that's roughly a 25% reduction in the real cost — e.g. £50k off a £200k project.
Do I need to chase a grant before installing solar?
Usually no. Grant application windows are competitive and can delay a project by 6–12 months — during which you keep paying full grid prices. For most UK businesses the maths is stronger if you start now with asset finance or a PPA and claim AIA on day one.
How does asset finance compare to a grant?
Asset finance can be a better outcome than a part-funded grant: with no upfront cost and monthly payments often lower than energy savings, the project is cashflow-positive immediately and you own the asset at the end of the term.
More answers on our commercial solar FAQs page.
Funding shouldn't be the thing that stops you
Every Solar Britain proposal includes a funding plan built around your business — tax allowances, asset finance and PPA options modelled side by side.