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 →

Sector funding guide

Solar Grants for UK Manufacturers 2026 | After IETF

English IETF closed. The 2026 manufacturing solar stack — AIA, PPAs and SEG — still pays back in 4-6 years; the Scottish IETF closed in March 2025.

Typical project size
300kWp – 2MWp
Typical roof area
1,500 – 11,000 m²
Typical annual saving
£70k – £450k/year
Independent
4.5yr
Avg Payback
Always check your installer is MCS-certified

Grant routes for manufacturing

Status update — May 2026. The English IETF (closed July 2025) Phase 3 closed to new applications after the Spring 2024 round, following the 2025 Spending Review decision not to extend. Existing awards continue to deliver through 2028. The Scottish IETF is a separate scheme; we have found no open call since its last call closed in March 2025. For English and Welsh manufacturers, the 2026 stack is now the Annual Investment Allowance (AIA) + PPA + SEG, which still delivers 4–6 year payback for most sites without any application risk.

Why solar makes financial sense for UK manufacturers in 2026

Manufacturing is the single largest commercial sector for solar PV in the UK by installed capacity. The reasons are structural rather than ideological. UK manufacturing sites typically combine three things that align almost perfectly with solar economics: large flat or low-pitch roofs averaging 1,500 to 11,000 square metres of usable area, daytime electricity demand running 5 to 7 days a week with most processes between 06:00 and 18:00, and rising exposure to electricity prices as more of the production line gets electrified — induction furnaces, CNC machining, electric injection moulding, electric process heat. The result is that the average UK manufacturer with annual electricity demand above 800,000 kWh now runs solar models that pay back inside seven years before grants and inside five years after them.

The IETF closed in July 2025 with no successor and never funded solar PV. Manufacturer solar economics now rest on self-consumption, the £1m AIA, the 50% special-rate FYA above it, and SEG export income. No grant sits behind a typical manufacturer’s solar project today.

Which manufacturing sub-sectors fit solar best

Solar fit varies by sub-sector. The strongest fits:

  • Metal fabrication, machining and assembly (SIC 24–25). Strong fit. The sector has high electricity intensity, predictable daytime profiles and roof-rich premises.
  • Food and drink processing (SIC 10–11). Excellent fit, particularly chilled and frozen producers. Refrigeration loads run 24/7 but solar still displaces 60–75% of daytime load.
  • Plastics, rubber and composites (SIC 22). Good fit when the site has high injection moulding electricity demand. PSDS does not cover.
  • Chemicals and pharmaceuticals (SIC 20–21). Mixed fit. Process-heat loads dominate the carbon picture; solar is a side measure.
  • Paper, board and printing (SIC 17–18). Good fit; rising electricity intensity post drying-oven electrification.
  • Textiles, leather and apparel (SIC 13–14). Daytime loads suit solar.
  • Building products and ceramics (SIC 23). Variable. Heavy-clay producers fit; lighter joinery doesn’t.

Whatever your electricity use, the better answer is normally the Annual Investment Allowance (AIA) with a strong PPA. Most £150k–£500k manufacturing solar projects don’t need a grant at all once you model the corporation tax benefit and a competitive energy supply contract.

Why there is no grant application to prepare

The IETF scored industrial efficiency and fuel-switching projects until its last window shut on 19 April 2024. It closed in July 2025 with no successor, takes no applications and never funded solar PV. What a manufacturer should prepare instead is the capital-allowance claim: a clean asset register separating solar plant from civils, the AIA position for the year, and a PPA or finance quote for comparison.

Battery storage at manufacturing sites

Batteries were never an eligible IETF technology, and the fund is closed, so battery storage at manufacturing sites is funded from capital, finance or a PPA. Batteries firm up self-consumption against weekend operation or shift solar output into evening peak charging windows. Pure energy-arbitrage batteries rarely pay back on their own.

Common manufacturing solar mistakes we see

The biggest single mistake is over-sizing. We see installer quotes that fill 100% of available roof area on the basis that “more solar = more savings”. For most manufacturers, self-consumption falls off a cliff at 110–130% of weekday daytime demand, and SEG export rates do not bridge the gap between 8p/kWh export and 22p/kWh grid avoidance. The right system is normally 75–95% of peak weekday daytime demand, not 100% of roof.

The second is building the business case around a grant. The IETF closed in July 2025 with no successor and never funded solar, so model the project on capital allowances alone.

The third is treating the Annual Investment Allowance (AIA) as an afterthought. We have seen manufacturer board papers where the headline payback figure is 7.5 years on a £450k system — when a properly modelled the Annual Investment Allowance (AIA) benefit drops it to 5.6 years, comfortably below the board hurdle. Models that don’t incorporate the corporation tax benefit are misleading and routinely kill projects that should proceed.

Typical manufacturing solar project profile

For a representative UK manufacturer with 2.4 GWh/year electricity demand, a 4,200 m² rooftop and £580k headline capex, the post-grant numbers we see most often:

  • Pre-grant payback: 6.8 years
  • the Annual Investment Allowance (AIA) tax relief: £113,000 (25% of net of grant)
  • Net cost to client: £339,000
  • Annual savings: £92,000
  • Post-grant payback: 3.7 years
  • 25-year NPV (8% discount): £1.18m

These numbers vary enormously with site profile. The point is that the Annual Investment Allowance (AIA) brings the tax relief into year one and shortens payback; the IETF closed in July 2025, never funded solar and cannot be stacked.

What we do for manufacturer clients

The work splits cleanly into three phases. Pre-application: half-hourly meter data analysis, energy audit, integrated technical design, financial model, board paper. Application: business-case narrative for tax relief or finance, supplier quotes, roadmap update and M&V plan (the IETF closed July 2025). Delivery: project management of the build, milestone draw-down management, post-commissioning M&V. Always check your installer is MCS-certified.

Most manufacturer engagements run 18 to 26 weeks from kickoff to commissioning. There is no grant application stage: the IETF closed in July 2025 with no successor and never funded solar PV. Build is typically 12 to 16 weeks for sub-1MW rooftops. Whether you have a quote in hand or are at the “would this even work for us?” stage, the free funding review takes four minutes and gives us enough to send you a credible eligibility shortlist.

Frequently asked questions — solar grants for manufacturing

What grants are available for solar panels on manufacturing premises in 2026?
The main funding routes for manufacturing in 2026 are: Annual Investment Allowance (AIA), Smart Export Guarantee (SEG), Power Purchase Agreements (PPA). The right combination depends on your ownership structure, location, project size and tax position. We prepare all application documentation and handle submissions — request a free funding review.
What is the typical solar system size and saving for manufacturing?
Most manufacturing solar projects we deliver are 300kWp – 2MWp in system size, using roof area of 1,500 – 11,000 m². Post-grant annual energy savings are typically £70k – £450k/year. Exact figures depend on roof type, grid connection and DNO requirements — a site survey is needed for an accurate figure.
How long does a commercial solar grant application take?
Timeline varies by grant route. The Annual Investment Allowance is applied at tax filing — no separate application required. Salix BAU loans take 6–10 weeks from a complete submission. Local Growth Fund rounds typically run 10–16 weeks. We manage end-to-end and run grant applications in parallel with DNO connection applications to minimise overall project timeline.
What is the payback period for commercial solar on manufacturing buildings?
Without grants, commercial solar payback for manufacturing sites is typically 6–10 years. With available grant funding applied, payback commonly falls to 4–7 years. Sites with high daytime electricity consumption and good south-facing roof space achieve the shortest paybacks. We model this precisely during our free funding review.
Free funding review

Run the funding stack for your manufacturing site

One conversation. Free funding shortlist by email. No obligation.

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.