Government funding for commercial solar in 2026
Government funding for commercial solar now runs through two channels rather than one big grant. The first is tax-based relief — the Annual Investment Allowance (AIA) gives 100% first-year capital allowances on the first £1m of solar PV spend, worth an effective 25% of capex against corporation tax, and 0% VAT removes a further fifth of the install cost. (Solar panels are special-rate expenditure under HMRC CA22335, so AIA — not Full Expensing, which is main-rate plant only — is the 100% year-one route; above the £1m cap the 50% special-rate first-year allowance applies, with the balance written down at 6% a year.) Neither requires an application or competes against other businesses, which is why they now do most of the heavy lifting. The second channel is targeted capital grants — REPF for rural businesses, the Local Growth Fund in Mayoral areas, SIETF in Scotland — which are competitive, geographically restricted and run to call windows. The headline-grabbing national funds (IETF, PSDS, UKSPF) have closed, so the honest answer to "what government funding is available for commercial solar?" in 2026 is: a strong, reliable tax-relief base everywhere, plus a competitive grant on top if your sector and postcode qualify.
Commercial solar incentives that are still open
The open commercial solar incentives in 2026 are the Annual Investment Allowance (corporation-tax relief), 0% VAT on solar, the Smart Export Guarantee (export revenue of 5–12p/kWh on flat tariffs, more on dynamic), Power Purchase Agreements (zero-capex private finance) and SEG-stacked self-consumption savings. Rural businesses add REPF (up to 40%); Mayoral-area businesses add the Local Growth Fund; Scottish manufacturers add SIETF and the Business Energy Scotland SME loan. The dead incentives buyers still ask about — the Feed-in Tariff and the Enhanced Capital Allowance — are gone and not returning; SEG replaced FiT. The practical takeaway: no business in the UK needs a closed grant to make commercial solar pay, because the open incentive stack already cuts the effective cost to roughly 60% of headline.
Commercial solar funding options compared — grant vs incentive vs finance
Searchers use "grants", "incentives" and "funding" interchangeably, but they are three different things and conflating them costs money. A grant is free money you don't repay — mostly closed to new applicants in 2026 (IETF, PSDS, UKSPF) or restricted to rural, public-sector or Mayoral-area applicants. An incentive is an ongoing benefit you claim rather than bid for — the AIA, 0% VAT and SEG — open to everyone and the backbone of the 2026 economics. Finance is funding you repay or trade for power — green business loans, asset finance, and PPAs (which carry zero capex) — always available regardless of grant windows. The strongest 2026 plan combines all three: claim every incentive, add a grant if eligible, and use finance only for the residual cost.
Funding for commercial solar panels — putting the stack together
The right funding for commercial solar panels is rarely a single source — it's a stack. For a typical corporation-tax-paying business outside a Mayoral area and not rural, the stack is: 0% VAT (saves ~20%) + AIA (saves ~25% effective) + SEG export income + self-consumption savings, with a PPA available as a zero-capex alternative to the whole thing. A rural business adds REPF on top (up to 40%); a Scottish manufacturer swaps in SIETF; a public-sector body uses Salix interest-free loans. Because the incentive base is national and uncapped, the question is almost never "is there any funding?" — it's "which routes does this specific site qualify for, and in what order do we claim them to maximise the net benefit?"