There is no single national grant for business solar panels in England. The real help comes from tax relief, mainly capital allowances that let you deduct up to £1 million of spending from your profits, plus export payments, a few local grants and cheap loans. If you’re searching for solar panels for business grants in the UK, here is what actually exists as of October 2026.

Is there a commercial solar subsidy?

Not in the old sense. The Feed-in Tariff, which paid for every unit generated, closed to new systems in 2019. Today the support is:

  • No national grant for business solar in England.
  • Capital allowances are the biggest help for most businesses.
  • VAT: businesses pay 20%, but most can reclaim it.
  • Export payments (the Smart Export Guarantee) pay you for spare power.
  • Local grants are small and come and go. One is open in Mid Devon now.
  • No cash at all? A solar PPA can put panels on your roof with no upfront cost.

Solar panels for business: tax credits and allowances

The UK doesn’t have “tax credits” for solar in the American sense. Instead, you claim capital allowances. They reduce your taxable profit, so you pay less tax.

  • Annual Investment Allowance (AIA). Deduct up to £1 million a year of spending on plant and machinery, including solar, in the year you buy it. Companies, sole traders and partnerships can all claim.
  • 50% first-year allowance. Solar panels count as “special rate” assets. Companies can claim 50% of the cost in year one, then 6% a year on the rest. This is useful for spending above the £1 million AIA.
  • Full expensing doesn’t apply. HMRC’s 2026 guidance is clear that the 100% full expensing relief is for main rate assets, not solar panels.
  • The new 40% allowance from January 2026 is also for main rate assets, so it won’t usually help with solar.

A rough idea of the saving: a company paying the 25% main rate of corporation tax that claims the AIA on a £90,000 system could save around £22,500 in tax in that year. Your own figure depends on your profits and tax rate.

This is general information, not tax advice. Speak to your accountant before you commit.

Do businesses pay VAT on solar panels?

Yes, usually at 20%. The 0% VAT rate on solar and batteries is only for homes and some charity buildings, and it runs until 31 March 2027. Commercial premises pay the standard rate.

The good news: if your business is VAT-registered, you can normally reclaim the VAT on the system, so it costs you nothing in the end. If you are not VAT-registered, or you are partly exempt, ask your accountant.

Business rates

In England, rooftop solar and other on-site renewables are exempt from business rates until 31 March 2035. So adding panels shouldn’t raise your rates bill. See commercial solar payback for how this and the tax points affect your returns.

Getting paid for spare power

The Smart Export Guarantee (SEG) means larger energy suppliers must pay you for power you send to the grid, for systems up to 5MW.

  • Rates range from about 1p to 15p per kWh. Business rates are often at the lower end.
  • Power you use yourself is worth far more, as businesses pay well over 20p per kWh for grid power.

So SEG is a bonus, not the main reason to go solar. How export payments work.

Local and regional grants in the South West

Local grants are usually small and short-lived. Many were paid for by the UK Shared Prosperity Fund, which has now wound down. Here is what we found:

  • Mid Devon: open. Mid Devon District Council’s Green Enterprise Grants 2026 to 2028 pay £500 to £5,000, up to 50% of the cost of low carbon projects. Renewable energy installations are listed. It is for SMEs that have traded for at least two years, and runs until March 2028 or until the money runs out. Check with the council that your solar project qualifies.
  • Somerset, North Somerset and South Hams: earlier business decarbonisation grants have closed or are fully allocated, and we found no new round.
  • Cornwall and the rest of Devon: we found no open business solar grant in October 2026.

Our advice: check your district council’s business pages and your local Growth Hub, but don’t wait for a grant. A £5,000 grant is welcome, but the tax relief and energy savings are usually far bigger.

Farms

Defra’s Improving Farm Productivity grant (round 2) paid 25% towards rooftop solar and batteries on farm buildings, with grants from £15,000 to £100,000. It is now closed. Watch for future rounds. Ground-mounted panels were not covered.

Scotland and Wales

  • Scotland: the Scottish Government’s SME Loan Scheme, run through Business Energy Scotland, offers interest-free loans of up to £100,000 for energy efficiency and renewables, while funds last.
  • Wales: the Development Bank of Wales’ Green Business Loan Scheme lists solar PV as eligible, with discounted fixed rates and repayment holidays. The Welsh Government says funding is available until 2028.

Green business loans and finance

If you’d rather spread the cost:

  • Green loans and asset finance. Many banks and lenders offer finance for solar. Often the energy savings cover the repayments.
  • Leasing. You pay a monthly fee to use the system.

Check the tax treatment with your accountant, as it changes how allowances work.

The no-upfront-cost route: a solar PPA

With a solar power purchase agreement (PPA), a funder pays for, owns and maintains the panels on your roof or land. You buy the power at a fixed price, usually lower than your grid price. No grant needed, and no capital tied up.

PPAs suit businesses with high daytime use, a long-term site and good credit. What is a solar PPA?

At a glance

Support What you get Who can use it
Annual Investment Allowance Deduct up to £1m from profits in year one Most UK businesses
50% first-year allowance Deduct 50% of solar cost in year one Companies
VAT reclaim Get back the 20% VAT VAT-registered businesses
Business rates exemption No rates on on-site solar until 2035 Businesses in England
Smart Export Guarantee About 1p to 15p per kWh exported Systems up to 5MW in Great Britain
Mid Devon Green Enterprise Grant £500 to £5,000, up to 50% of costs SMEs in Mid Devon
Solar PPA Solar with no upfront cost Businesses with good credit and a long-term site

What we do

We look at your bills or half-hourly data, design a system that fits how you use power, and show you the payback with the tax allowances included. Installs are delivered with certified partner installers, or we can set out a PPA through our funding partners.

Get a free quote for your business →

Sources

Facts last checked 25 October 2026. Grants open and close often. This is general information, not tax or financial advice.