2026 Update: PSDS & IETF closed. AIA gives 100% year-one relief on solar. 2026 active stack still delivers 40–60% effective subsidy. See 2026 grants →

UK commercial solar grants and funding guide — updated October 2026

Commercial solar grants in the UK: what is open, what has closed, nation by nation

IETF and PSDS closed to new applications in 2024. REPF ended in March 2026. What is left is mainly the Annual Investment Allowance, the Smart Export Guarantee and PPAs, which together still pay back commercial solar in 4–6 years on many sites. This guide tracks which schemes are open in England, Scotland, Wales and Northern Ireland, and marks the closed ones as closed.

  • IETF, PSDS, UKSPF — closed status confirmed against gov.uk
  • Active 2026 stack: AIA + SEG + PPA (REPF ended March 2026)
  • Always check your installer is MCS-certified
  • Free funding review. No obligation.

No obligation.

Independent
4.5yr
Avg Payback
Always check your installer is MCS-certified
Verified May 2026

2026 Grant & Incentive Status

The definitive UK commercial solar funding picture — confirmed against gov.uk, Salix Finance and DESNZ announcements.

Scheme Status
Annual Investment Allowance (AIA) OPEN
Smart Export Guarantee (SEG) OPEN
Power Purchase Agreements (PPA) OPEN
Rural England Prosperity Fund (REPF) CLOSED
Local Growth Fund (UKSPF successor, allocated to the authorities) OPEN
Great British Energy Community & Public Fund OPEN
Salix Interest-Free Loans OPEN
Scottish IETF (SIETF) CLOSED
Industrial Energy Transformation Fund (IETF) — closed July 2025 (England, Wales & NI) CLOSED
Public Sector Decarbonisation Scheme (PSDS) CLOSED
UK Shared Prosperity Fund (UKSPF) CLOSED

See full scheme details →

The 2026 UK funding landscape

UK commercial solar funding looks very different in 2026 than it did 12 months ago.

PSDS Phase 4 and UKSPF closed to new applications during 2024-2026, and the IETF (which never funded solar PV) closed in July 2025. Most online guides still describe them as live. Our job is to give you the honest 2026 picture: which schemes are actually open, which closed, and how to assemble a funding stack that pays back without depending on grants that no longer exist. The combination of Annual Investment Allowance, SEG, PPAs still deliver 4–6 year payback on most commercial solar projects.

4.5yr
Average payback on the 2026 active stack

What's actually still open in 2026

The active UK commercial solar funding stack in May 2026 has five legs. First, tax allowances — the Annual Investment Allowance, and why Full Expensing does not apply to solar — which are guaranteed for any UK incorporated company paying corporation tax and effectively reduce net solar capex by 25%. Second, VAT recovery: commercial solar is standard-rated at 20%, which VAT-registered businesses normally reclaim. Third, private finance via Power Purchase Agreements — third-party investors own the asset, you buy electricity at a fixed pence/kWh below grid prices, zero capex from you. Fourth, export revenue through the Smart Export Guarantee, with dynamic tariffs paying 25–40p/kWh during system peaks. Fifth, residual targeted grants — REPF for rural businesses, the new Local Growth Fund in 11 Mayoral Authority areas, Salix interest-free loans for public sector, and GBE Community Fund for community-led projects. The Scottish IETF closed its last call in March 2025 and never funded solar PV.

Most businesses we speak to assume they need a grant. In 2026 — with IETF and PSDS closed — the honest answer is that for the majority of SMEs the combination of AIA + a competitive PPA beats any active grant on net cash, with none of the application risk. See current commercial solar costs by system size.

Why an independent funding partner matters

We are not a solar installer. We don't sell panels. Our revenue comes from delivering successful applications and from project management on grant-funded builds — which means we have no incentive to push you into a £400,000 system when £180,000 would pay back faster. With the major grants now closed, our value is even sharper: keeping you out of fantasy projections about schemes that don't accept new applications, and steering you to the active routes that genuinely move payback. More about how we work.

Scottish sites have their own grid and grant picture, and commercial solar Glasgow is a useful read on how that plays out north of the border.

Where a roof will not take the load, lightweight solar options for commercial buildings are worth comparing against a ground-mount or canopy before you rule the site out.

Grant eligibility looks different when you own the building but not the electricity bill, which is why renewable energy for commercial landlords deals with the split incentive head-on.

Free funding review

See which grants your business qualifies for — free 20-minute funding review.

Tell us your sector, roof size and energy spend. We reply by email with a shortlist of grants and the realistic capex you can expect to recover.

No obligation. We don't charge for grant scoping.

The 2026 funding stack

Nine active routes — layered to replace what closed.

A typical commercial solar project doesn't use just one route. The right answer is normally a stack — for example, the Annual Investment Allowance (25% effective tax saving) (20% off VAT-inclusive cost) + a PPA (zero capex on operating expenses) + SEG (export revenue) — that lands a 4–6 year payback. See the full guide to commercial solar grants and incentives — every active vs closed scheme for 2026.

Annual Investment Allowance (AIA)

AIA
Funder
HM Treasury / HMRC
Coverage
100% of the first £1m of qualifying solar spend written off in year one — worth ~25% of capex at 25% corporation tax
Cap
£1m AIA per group per year; spend above the cap attracts the 50% special-rate first-year allowance, with the balance in the 6% special rate pool
Deadline
Permanent — the £1m AIA limit is a permanent allowance
UK incorporated companies paying corporation tax. Solar PV is special-rate expenditure, so AIA — not Full Expensing — is the 100% year-one route (HMRC CA22335).

Smart Export Guarantee (SEG)

SEG
Funder
Ofgem-licensed electricity suppliers (>150k customers)
Coverage
Per-kWh payment for surplus solar exported to grid
Cap
No cap; system size limit 5MW (50kW for micro-CHP)
Deadline
Statutory & open-ended; tariffs reset by each supplier
Any business with MCS-certified solar PV under 5MW

Power Purchase Agreements (PPA)

On-site PPA
Funder
Private third-party investors
Coverage
Zero upfront capex; site host buys power at fixed pence/kWh
Cap
Project-dependent; typical 6–9p/kWh below grid
Deadline
Open-ended private market
Sites with 100kW+ demand and 15+ year horizon

Local Growth Fund (UKSPF successor, allocated to the authorities)

Local Growth Fund
Funder
Mayoral Strategic Authorities
Coverage
Variable; capital grants for local economic priorities including decarbonisation
Cap
£902m over four years across Mayoral Strategic Authorities; project caps set by each authority
Deadline
From 1 April 2026; calls depend on each authority
11 Mayoral Strategic Authority areas in North England + Midlands only

Great British Energy Community & Public Fund

GBE Community Fund
Funder
Great British Energy (publicly-owned)
Coverage
Feasibility & development funding for community-led solar
Cap
Project-dependent; typical £10k–£100k feasibility grants
Deadline
Open with £5m boost announced for 2026
Community-led organisations, charities, social clubs, faith buildings, village halls

Salix Interest-Free Loans

Salix BAU loans
Funder
Salix Finance Ltd (DESNZ-backed)
Coverage
Interest-free loan repaid from energy savings
Cap
Sector-dependent; typical £100k–£3m per project
Deadline
Open-ended (separate from closed PSDS Phase 4)
Public sector bodies (separate from PSDS)
How we work

From scoping call to grant decision in 8–12 weeks.

01

Free scoping call

A 20-minute conversation about your sector, energy spend and roof / land. We come back with a shortlist of grants you would credibly win.

02

Energy audit + design

We pull half-hourly meter data, build an MCS-compliant PV design, and a fully costed financial model — capex, payback, IRR, NPV.

03

Application drafting

We write the funder-specific narrative for schemes that are open (the IETF closed in July 2025 and PSDS has had no open window since November 2024).

04

Decision + delivery

On approval, the project moves to installation. Always check your installer is MCS-certified.

Pillar guides

Deep-dive guides — every commercial solar funding route, sector and topic.

Each page covers one specific topic in depth — funding routes, sub-sectors, tax mechanics, application process. Use these for board papers, internal scoping or to brief a colleague.

Estimate your funding

Estimate Your Grant Value

Enter your site details to get a ballpark funding estimate. This is indicative — we'll build a precise model from your AMR data.

£5k£500k
100 sqm5,000 sqm
Estimated figures
Solar system size
—
Gross install cost
—
Total incentives
—
Net effective cost
—
Est. annual saving —
Est. payback period —

Indicative only. Based on typical UK commercial rates. Get a precise model from AMR data.

Tax relief shown assumes the Annual Investment Allowance (AIA) — 100% of the first £1m of spend in year one, worth ~25% of capex at 25% corporation tax. Solar PV is special-rate expenditure, so AIA is the 100% year-one route (Full Expensing covers main-rate plant only and does not apply to solar). Spend above the £1m AIA cap attracts the 50% special-rate first-year allowance, with the balance written down at 6% in the special rate pool.

Get precise funding model →
Frequently asked

Commercial solar grants — the questions we get most.

Are commercial solar grants still available in the UK in 2026?
The headline grants of recent years — IETF Phase 3, PSDS Phase 4, UKSPF — have all closed to new applications during 2024–2026. The 2026 funding stack that is still active: the Annual Investment Allowance (100% of the first £1m in year one, ~25% effective subsidy; solar is special-rate expenditure so AIA — not Full Expensing — is the route), Smart Export Guarantee (export revenue), Power Purchase Agreements (zero capex), Local Growth Fund (11 Mayoral Authority areas only), Great British Energy Community Fund (community-led), and Salix interest-free loans (public sector). The Scottish IETF closed its last call in March 2025 and never funded solar PV. Combined, the active stack reduces effective project cost 40–60% on most sites. See the full breakdown on our commercial solar grants guide.
What changed in UK commercial solar funding in 2024–26?
Three major closures: IETF Phase 3 closed after the Spring 2024 round following the 2025 Spending Review; PSDS Phase 4 closed to new applications in November 2024 (existing awards still delivering); UK Shared Prosperity Fund closed 31 March 2026 with the Local Growth Fund replacing it only in 11 Mayoral Authority areas.
Can a private company get a grant for solar panels in 2026?
Direct cash grants for new applications are now very limited. The viable routes are (1) the Annual Investment Allowance — 100% of the first £1m of solar capex written off in year one, worth about 25p of corporation tax per £1, with no application (Full Expensing does not apply: solar is special-rate expenditure per HMRC CA22335); (2) PPAs — third-party-funded solar with zero capex; (3) Local Growth Fund if your business is in one of the 11 Mayoral Authority areas; (4) REPF if you are a rural enterprise; (5) the Scottish IETF is closed: its last call closed in March 2025 and it never funded solar PV.
What can schools and NHS trusts do now that PSDS is closed?
Three options: (1) Salix Finance interest-free loans — separate active scheme, repaid from energy savings; (2) wait for any PSDS Phase 5 announcement (none confirmed); (3) Local Growth Fund where the trust's estate is in an eligible Mayoral Authority area. The Low Carbon Skills Fund (also Salix) remains active for Heat Decarbonisation Plan funding — useful to stay scoping-ready.
Has 0% VAT been extended to commercial solar?
No. The zero rate covers homes and relevant charitable buildings, not commercial premises. Commercial solar is standard-rated at 20% VAT, which a VAT-registered business normally reclaims through its VAT return.
What is the Smart Export Guarantee and how much does it pay?
SEG is the statutory mechanism requiring large Ofgem-licensed electricity suppliers to pay you for surplus solar exported to the grid. Best commercial SEG tariffs in 2026 are paying 12–18p/kWh on flexible export contracts, and dynamic tariffs (Octopus Outgoing Agile, EDF Variable) pay 25–40p/kWh during system peaks. SEG is not a grant — it is a recurring revenue line that compounds over the system life.

More on our FAQs page — including supplier-specific and sector-specific questions.

Free funding review

Ready to see what your business could win?

One conversation. No commitment. We reply by email with a shortlist of grants you would credibly secure, ballpark capex, and the realistic payback after funding.

No obligation. We don't charge for grant scoping.

Funding by asset class

The allowance depends on the asset, and most pages on this topic get it the wrong way round. Solar PV is special-rate expenditure (HMRC Capital Allowances Manual CA22335), so the 100% year-one route is the Annual Investment Allowance — Full Expensing is a main-rate measure and does not reach it. Battery storage, EV charging and heat pumps are Heat pumps for space or water heating are special-rate: AIA, then the 50% FYA. Standalone batteries are probably main-rate (full expensing for companies), but HMRC has no specific guidance; confirm with your adviser.

Free funding review

Find out which 2026 schemes your site actually qualifies for

What you get
  • 1. A short written funding note naming every scheme your site qualifies for in 2026 — and the ones it does not.
  • 2. Indicative system size and a capex band for your roof.
  • 3. Year-one tax treatment per asset in £ — solar is special-rate expenditure, so the route is the Annual Investment Allowance; heat pumps for building heating are also special-rate integral features, and standalone battery storage is probably main-rate plant (HMRC has no specific guidance, so confirm with your adviser). Most pages get this the wrong way round.
  • 4. Projected SEG export revenue at current rates.
  • 5. Any red-flag eligibility or DNO issues we can see up front.

Covers solar PV, battery storage, EV charging and commercial heat pumps — separately or as one bundled project. If your project is a heat pump or a battery rather than a roof, say so in the message box and the note is written against that asset instead.

What we will not do
  • · We do not pass your details to multiple installers.
  • · We do not run a lead auction, and your phone number is optional.
  • · No marketing lists, no unsolicited calls.
  • · We are an independent funding information service — not an installer.

Five questions. They are the eligibility test itself — scheme eligibility in 2026 turns on sector, tenure, site size and spend, so we cannot shortlist anything without them.

We reply from funding@commercialsolargrants.co.uk. A phone number is not required.