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, 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 — 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) 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. ...Mayoral-area businesses add the Local Growth Fund; Scottish businesses add the Business Energy Scotland SME loan (SIETF closed in March 2025). 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 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: VAT recovery (cash-flow, ~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 public-sector body uses Salix interest-free loans. Scotland’s SIETF closed in March 2025 and is not part of the stack. 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?"