Are there grants for commercial solar panels in the UK?

There are no national capital grants for UK commercial solar in 2026. The Feed-in Tariff (FIT) closed to new applicants in March 2019, and successive governments have chosen tax-led support over direct grants. What’s actually available: 100% Annual Investment Allowance (effectively a 25% tax discount on the install), the Smart Export Guarantee (between 4p/kWh and 15p/kWh for exported electricity), and rotating regional grant schemes run by mayoral combined authorities — typically worth £5,000-£50,000 per SME. The British Business Bank also operates the Growth Guarantee scheme, useful for solar capex loans where commercial banks are reluctant.

The four main support routes

1. 100% Annual Investment Allowance (AIA)

The biggest financial support by far. AIA lets a profitable UK business deduct up to £1m of qualifying plant and machinery capex from taxable profits in the year of purchase. Solar PV qualifies. For a limited company at 25% corporation tax, an £80,000 install becomes £60,000 net of tax — a 25% effective discount funded by HMRC.

For sole traders and partnerships using cash basis, similar reliefs apply (full expensing in the year of purchase). Speak to your accountant — the legal route differs slightly but the saving is similar.

2. Smart Export Guarantee (SEG)

Run by Ofgem since 2020, SEG requires every licensed electricity supplier to offer a tariff for excess solar exported to the grid. Rates vary by supplier:

• Octopus Outgoing: up to 15p/kWh (currently the market leader)
• E.ON Next Export: 16.5p/kWh fixed (with restrictions)
• British Gas Export: 6.4p/kWh
• EDF Export+: 5.6p/kWh
• OVO Smart Export: 4p/kWh

A typical SME exports 25-45% of generation. On a 100 kW system generating 90,000 kWh/year, that’s 22,500-40,500 kWh exported. At a mid-rate 8p blended SEG, that’s £1,800-£3,240/year in export income.

3. Mayoral Combined Authority grants

Several UK mayoral regions run rotating SME decarbonisation grants. Active in 2026:

• Greater Manchester Combined Authority (GMCA) Net Zero Toolkit
• West Midlands Combined Authority (WMCA) Better Business Greener Future
• West Yorkshire Combined Authority (WYCA) Green SME Fund
• Liverpool City Region (LCRCA) Net Zero Accelerator
• South Yorkshire Mayoral Combined Authority Green Skills

Typical grant: £5,000-£50,000 per SME, sometimes match-funded against capex. Schemes open and close rapidly — applications often close 2-4 weeks after launch.

4. British Business Bank Growth Guarantee Scheme

Government-backed loan guarantee covering 70% of the lender’s risk on loans to SMEs for capex including renewables. £25,000-£2 million per business. Useful where your primary bank is reluctant to lend for solar.

What’s NOT available (despite what cowboys claim)

• A “government solar grant” of £5,000 per business (this is a domestic ECO4 scheme, not commercial)
• Zero-rated VAT (only domestic; commercial PV is standard 20% VAT)
• Renewable Heat Incentive (closed in 2022)
• Climate Change Levy exemption for self-generated power (only applies to grid-supplied electricity)

If a salesperson cites a “£10,000 government grant just for filling in a form”, treat the entire conversation as a red flag.

Common misconceptions about commercial solar grants

“There used to be FIT, surely there’s a replacement” — there isn’t. The replacement is AIA + SEG, neither of which is a capital grant. They reduce ongoing cost; they don’t shrink the upfront cheque.

“My local council will pay for it” — almost never. Local authorities install solar on their own buildings (schools, leisure centres) but don’t fund private SME installs. Mayoral combined authority grants are different and may apply.

“Charities get grants” — sometimes. Registered charities and CICs can access specific schemes (e.g. Big Lottery Climate Action Fund, Postcode Climate Challenge). Charity solar funding is its own niche worth a separate conversation.

Next steps

For a current grant scan against your postcode, business size, and project size, contact us via /quote/. See our full grants and funding page and cost guide. Related FAQs: tax relief detail, VAT on commercial solar, finance options.