Business solar panels — what's actually still on the table in 2026.

Why business solar economics improved in 2024–26 (despite the grant closures)

It's a strange paradox. The two biggest direct grants for UK commercial solar — IETF for manufacturing and PSDS for public sector — both closed to new applications during 2024–25, and headlines have been bleak. Yet the underlying economics of business solar in the UK have continued to improve, for four reasons that often outweigh the grant closures:

• Module prices fell 22% in 2024. Tier 1 module costs are now near historic lows (~10p/Wp ex-works). The drop has flowed through to installer pricing on most £100k+ projects.
• 0% VAT was extended from domestic to commercial. A quiet but materially valuable 20% reduction in VAT-inclusive project cost — no application required, applied at quote stage.
• Annual Investment Allowance made permanent. The Autumn Statement 2023 made the Annual Investment Allowance permanent. For any UK incorporated company paying corporation tax (25%), this is 25p of tax back per £1 of solar capex — effectively a guaranteed 25% subsidy without any application risk.
• Dynamic SEG tariffs emerged. Octopus Outgoing Agile, EDF Variable and similar dynamic export contracts now pay 25–40p/kWh during system peaks — far above the 5–10p flat-rate norms of 2022.

The 2026 funding stack — by business type

The right stack depends on what your business is. Below is the working answer for the major commercial sectors:

Manufacturers (England & Wales)

English IETF Phase 3 closed after Spring 2024. The 2026 stack is: Annual Investment Allowance (25% effective subsidy) + 0% VAT (~17% off VAT-inclusive cost) + SEG export + (optionally) PPA structure if you want zero capex. For a £400k system, this typically delivers a net cost of around £230k–£250k with 4–5 year payback.

Manufacturers (Scotland)

Scottish IETF remains active and is more competitive than ever (English IETF competition has shrunk because that scheme closed). Stack SIETF + AIA + SEG.

Schools, academies, FE colleges, NHS trusts and public sector

PSDS Phase 4 closed November 2024. Active routes: Salix interest-free loans (separate from PSDS, repaid from energy savings — effectively zero net cost), Low Carbon Skills Fund for HDP refresh, Local Growth Fund where geographically eligible, and PPAs.

Farms and rural businesses

REPF remains live in most English councils, with up to 40% capex covered. Stack REPF + AIA/AIA + SEG. Devolved equivalents exist in Wales (Rural Communities Development Fund), Scotland (Scottish Government rural programmes), and Northern Ireland (DAERA rural development).

Hotels, retail, offices, hospitality, distribution, logistics

No direct grants apply (these sectors weren't eligible for IETF or PSDS even when they were live). The 2026 stack: AIA + 0% VAT + SEG + (optionally) PPA. For multi-site operators, programmatic PPA rollouts across 10+ sites are now the dominant model.

Businesses in 11 Mayoral Authority areas

The new Local Growth Fund (£1.5bn, 3 years from April 2026) provides additional capital grants in Greater Manchester, West Midlands, Liverpool, West Yorkshire, South Yorkshire, North East, Tees Valley, East Midlands, York & North Yorkshire, plus Hull/East Yorkshire and Lancashire. Each authority sets its own scoring criteria.

What businesses get wrong about solar grants

Five mistakes we see most often in scoping calls:

1. Assuming a grant is necessary. For most £150k+ commercial projects, the combination of AIA + 0% VAT + a competitive PPA delivers better net economics than any cash grant ever did, with zero application risk. Grants are an optimisation, not a foundation.
2. Reading 2023 articles as current. Most online "grants for solar businesses" articles are still describing IETF and PSDS as live. They're not. Always check publication dates and the gov.uk source pages.
3. Oversizing the system. "Fill the roof" quotes from generic installers collapse self-consumption rates, shifting revenue to lower-paying SEG export. Properly sized systems target 30–50% of annual demand, not 100% of roof area.
4. Ignoring DNO costs. Connection fees can be £8k–£180k depending on local network capacity. We've seen quotes that buried DNO costs and produced misleadingly favourable payback.
5. Defaulting to 20% VAT. 0% VAT on commercial solar is real. Some installers default to charging 20% — always ask explicitly.

What we do for business clients

Three-stage engagement: (1) free 20-minute scoping call — sector, postcode, energy spend. We come back with a written shortlist of routes that would credibly work for you. (2) Fixed-fee modelling work — we pull half-hourly meter data, run PVsyst yield modelling, build a financial model and produce board-paper output. £950+VAT typically. (3) On approval, project-managed delivery through one of our six MCS-certified delivery partners. Full process here. About a third of the businesses we scope get advised against proceeding because the project doesn't pay back — we say so before any application work starts.