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 — AIA — 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: no open call found since its last call closed in March 2025.
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.
Annual Investment Allowance
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.
Scottish Industrial Energy Transformation Fund (SIETF): CLOSED. All calls are closed (the last in March 2025) and no new call has been announced.
Open — rolling roundsStatus: Closed — last call March 2025, no new call announced. It was the Scottish Government’s separate scheme for industrial decarbonisation in Scotland. It never funded solar PV.
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).
The 2026 stack for £800,000 of industrial solar — worked example
£800,000 industrial solar installation at an English manufacturer. Profitable company paying 25% corporation tax.
No grant route to compare
The IETF closed in July 2025 with no successor and never funded solar PV, so there is no grant to net off an £800,000 solar installation. The comparison on the right is the only one that applies.
What you can access today
For sites in Mayoral Authority areas, check whether a Local Growth Fund scheme is open; the Scottish IETF closed in March 2025 and never funded solar PV. For zero-capex delivery, a PPA eliminates capital outright.
IETF Phase 3 FAQs
What happened to IETF (now closed) Phase 3?
Is there an IETF (now closed) replacement for English manufacturers?
Can I still get a grant for industrial solar in England?
What was IETF (closed July 2025) Phase 3 worth — and is the Annual Investment Allowance comparable?
When is IETF (closed July 2025) Phase 4 expected?
Is Scottish IETF (last call closed March 2025) still open?
Find the best post-IETF funding stack for your industrial site
Free review — the Annual Investment Allowance modelling, PPA options, Local Growth Fund and the status of the Scottish IETF (last call closed March 2025) checked. Response by email.
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.
- what a commercial heat pump actually costs in 2026
Special-rate integral feature: AIA up to £1m, then the 50% special-rate first-year allowance for companies; full expensing does not apply.
- what commercial battery storage costs per kWh
Probably main-rate plant (HMRC has no specific guidance, so confirm with your adviser). Stacks with solar for self-consumption.
- the real cost of a commercial solar install
Capex bands per kWp before any relief.
- industrial rooftop solar economics
Large roofs, high daytime load — the strongest case.
- claiming the Annual Investment Allowance on solar
Solar is special-rate, so AIA is the 100% year-one route.
Find out which 2026 schemes your site actually qualifies for
- 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.
- · 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.
Commercial solar grants & funding
Every active 2026 route to fund commercial solar — grants, tax allowances and loans — with the eligibility and application detail behind each.
Pillar guideCommercial solar grants & incentivesThe master guide to what is open and closed in 2026.- Commercial solar panel grantsGrant routes for rooftop and ground-mount PV.
- Solar grants for businessesFunding by business type and size.
- UK government solar grantsCentral and devolved government schemes.
- Annual Investment Allowance on solar25% effective tax saving, no application; full expensing does not apply.
- Annual Investment AllowanceAIA on solar capital expenditure.
- Solar tax reliefEvery capital allowance that applies to PV.
- Salix funding (public sector)Interest-free loans for schools and the NHS.
- Salix Finance loansHow the Salix loan mechanism works.
- Local Growth FundMayoral and combined-authority funding.
- Rural England Prosperity FundCapital grants for rural enterprises.
- How to apply for a solar grantThe step-by-step application process.
- Grant eligibility checkerFind the schemes your site qualifies for.