IETF Phase 3 is closed — what UK manufacturers can use instead
The Industrial Energy Transformation Fund Phase 3 closed to new applications after the Spring 2024 round. No Phase 4 has been announced for English manufacturers. But the alternative stack — Full Expensing + 0% VAT — delivers better economics than IETF Phase 3 for most profitable industrial businesses.
Last round closed Spring 2024. Existing awards delivering through 2026–2028. No Phase 4 announced as of May 2026. Scottish IETF remains open for Scottish manufacturers.
What IETF Phase 3 was — and what replaced it
IETF Phase 3 provided capital grants of up to 30% for manufacturing and industrial businesses making energy efficiency or fuel-switching investments above £100k. It was competitive, application-heavy and UK-wide (England, Wales, Scotland). These six routes are the active 2026 alternatives.
Full Expensing
Permanent — no end date100% first-year capital allowance on solar plant, heat pumps, BESS and energy efficiency equipment. At 25% CT rate, saves £25,000 on every £100,000 of qualifying capex. No application, no competition round, no ceiling. Applies to all qualifying plant installed in the accounting period.
0% VAT on commercial solar
Open — no end dateCommercial solar installations now qualify for 0% VAT, extended from the domestic rate. Applied at invoice by your installer. On a £500k installation, saves approximately £85,000 versus the 20% standard rate. Can be combined with Full Expensing — they apply to different elements of cost.
Scottish Industrial Energy Transformation Fund (SIETF)
Open — rolling roundsDevolved equivalent of English IETF, administered by Scottish Government. Manufacturing, food processing, chemicals, data centres with high energy intensity in Scotland. Competitive rounds — applications assessed on energy intensity, carbon reduction and economic development criteria.
Local Growth Fund
Open — through 2028Replaces UKSPF (closed 31 March 2026) in 11 Mayoral Strategic Authority areas: GMCA, WYCA, LCRCA, NECA, NTCA, TfN, SYMCA, WMCA, CPCA, East Midlands, York & North Yorkshire. Each MA has its own Investment Plan with energy and industrial decarbonisation themes. SMEs in these areas can access capital grants through LA economic development teams.
Power Purchase Agreement (PPA)
Always availableThird-party funds the solar installation in exchange for a fixed-price electricity supply agreement at 6–9p/kWh below grid rates. No capital required, no grant application. Annual savings of £40k–£200k depending on site size. PPA terms typically 15–25 years. Exit provisions and buyout clauses negotiable. We arrange PPA procurement at no cost to client.
Salix BAU loans (public sector manufacturers)
Open — no end dateNHS catering, university research facilities, council waste processing and MOD manufacturing sites qualify as public sector bodies for Salix BAU interest-free loans. Repayments sized to match modelled energy savings. Separate from PSDS (which closed November 2024).
IETF Phase 3 vs the 2026 alternative stack — worked example
£800,000 industrial solar installation at an English manufacturer. Profitable company paying 25% corporation tax.
What you would have received
What you can access today
For sites in Mayoral Authority areas or Scottish manufacturers, add Local Growth Fund or Scottish IETF to reduce the net cost further. For zero-capex delivery, a PPA eliminates capital outright.
IETF Phase 3 FAQs
What happened to IETF Phase 3?
Is there an IETF replacement for English manufacturers?
Can I still get a grant for industrial solar in England?
What was IETF Phase 3 worth — and is Full Expensing comparable?
When is IETF Phase 4 expected?
Is Scottish IETF still open?
Find the best post-IETF funding stack for your industrial site
Free review — Full Expensing modelling, PPA options, Local Growth Fund and Scottish IETF eligibility checked. Response within one working day.
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