UK grants and capital funding for commercial solar.
An honest map of what's actually available in 2026 — separating capital grants (rare, mostly public-sector) from tax incentives (broad, generous), revolving loan funds (regional, growing), and competitive innovation funding.
PSDS Phase 4
Salix decarbonisation
MEEF, GMCA, City Leap
Scottish, Welsh, NI schemes
The honest framing
There is more confusion in this category than any other in commercial solar. Search results lump together capital grants (free money), revolving loans (money you pay back), tax incentives (deductions you claim against profits), and regional funds (typically equity or loans). Each has a different cash impact, a different eligibility test, and a different route to access. The first job of structuring a project is to map your eligibility against each of these — many projects access two or three at once.
Capital grants (cash, public sector, very competitive)
PSDS Phase 4 (administered by Salix)
The largest UK capital grant for commercial-scale solar. Open to central government, NHS, schools, FE colleges, universities, local authorities, and emergency services. Phase 4 awards typically range 30–80% of qualifying spend depending on the cost-per-tonne CO₂ saved metric. Solar-only applications rarely score competitively — winning bids bundle solar with heat pumps, fabric efficiency, and LED relighting in a single decarbonisation package.
Detail on PSDS →Solar+storage and grid-services innovation
Open to private and public sector. Strongest fit for projects with research-grade demonstration value: novel inverter architectures, grid-services integration, agrivoltaic pilots, second-life battery integration. Typical grant intensity 50–70% of qualifying R&D and demonstration costs, capped at the project ceiling for the specific competition. Calls open quarterly through innovateuk.ukri.org.
Devolved nation public-sector capital
Scotland: Heat Network Fund, Scotland's Public Sector Heat Decarbonisation. Wales: Welsh Government Energy Service capital grants for public sector. Northern Ireland: limited dedicated capital, mostly project-by-project. All restricted to public sector or community ownership and require detailed cost-benefit modelling against carbon thresholds.
Revolving loans (debt, public + some private)
Public sector zero-interest decarbonisation loans
Salix runs revolving loan facilities for public sector decarbonisation that complement PSDS grants. Loans typically zero-interest with payback through demonstrated energy savings. Often used to fund the non-grant portion of a PSDS project so the recipient body can deliver larger packages without depleting capital reserves.
Greater London revolving green loan fund
£500m+ revolving fund providing finance to London public-sector and not-for-profit organisations for energy efficiency and renewable projects. Senior debt at competitive green-finance rates, typically 6–8% APR depending on risk profile. Solar PV is one of the eligible technologies.
GMCA, WMCA, WYCA, others
Greater Manchester Combined Authority, West Midlands Combined Authority, West Yorkshire Combined Authority, and other regional bodies operate green-finance facilities of various sizes — typically open to public sector and community projects within their footprint. Terms vary by authority. We track the open programmes and recommend where eligible.
Tax incentives (deductions, all profitable companies)
Time-limited deduction extended to 31 March 2026
The single most consequential incentive for profitable corporation-tax-paying companies. Deduct 50% of qualifying capital cost from year-one taxable profits, with the remaining 50% in the special-rate pool at 6% writing-down allowances. Worth typically 17–19% of capital cost as lifetime tax saving for businesses at the 25% main rate.
Detail on 50% FYA →100% deduction up to £1m per accounting period
Where AIA headroom remains for the period, full deduction of qualifying spend in year one. For projects under £1m where AIA is available, AIA generally produces stronger year-one cash than the FYA + special-rate pool route, though lifetime values converge for profitable businesses.
Detail on AIA →Export tariffs from licensed suppliers
Mandatory scheme requiring large electricity suppliers to pay generators for exported solar. Tariffs vary by supplier — 4–15p/kWh depending on tariff structure (fixed-price vs market-linked). Modest revenue contribution on commercial systems sized for self-consumption (typically <10% of annual generation exported).
Detail on SEG →Eligibility map by organisation type
| Organisation | PSDS | Salix loans | Regional funds | 50% FYA | AIA |
|---|---|---|---|---|---|
| Limited company (profitable) | No | No | Some regions | Yes | Yes |
| Limited company (loss-making) | No | No | Some regions | Carry-forward only | Carry-forward only |
| School / academy / MAT | Yes | Yes | Most regions | No | No |
| NHS Trust | Yes | Yes | Most regions | No | No |
| Local authority | Yes | Yes | Most regions | No | No |
| University | Limited | Yes | Most regions | Trading subsidiary only | Trading subsidiary only |
| Charity / faith group | If property-owning | If eligible | Some regions | No | No |
| Property REIT | No | No | No | Yes (via tenant or PPA) | Yes |
Per-vertical grants guides
Different organisation types have access to different funding routes. Detailed guides per sector with worked examples and eligibility maps:
Schools & Academies grants
PSDS, CIF, Salix, MAT-portfolio applications. Eligibility, worked example, application strategy.
NHS Trusts grants
PSDS Phase 4, Net Zero NHS, Salix loans. Multi-site bundled-application strategy that wins 75-100% grants.
Local Authorities grants
PSDS, MEEF, GMCA, WMCA, WYCA, SYMCA — combined-authority programmes for council estate.
Charities & Faith Groups grants
Foundation grants, charity-specific lenders, trading-subsidiary structures around capital allowance constraints.
Manufacturing Businesses grants
FYA, AIA, Industrial Cluster Decarbonisation, supply-chain ESG financing — what works for profitable trading manufacturers.
Grants and funding FAQs
Are there any UK grants for private-sector commercial solar in 2026?
Who is eligible for PSDS funding?
How does Salix interact with PSDS?
Is there equivalent funding in Scotland and Wales?
Can charities access dedicated solar funding?
UK commercial solar grants and funding 2026: the complete guide
UK commercial solar grants are not a single programme — they are a patchwork of national, devolved, and regional funding streams that operate on different cycles, have different eligibility criteria, and are administered by different bodies. The most valuable grant programmes for commercial solar are PSDS (for public sector bodies) and the combined authority and mayoral funds (for SMEs and social enterprises). Getting the right grant for your organisation requires knowing which programme you qualify for and when the next application window opens.
National grant programmes for commercial solar UK 2026
| Programme | Administrator | Grant rate | Max grant | Eligible organisations | 2026 status |
|---|---|---|---|---|---|
| Public Sector Decarbonisation Scheme (PSDS) | Salix Finance / DESNZ | 60–100% of qualifying cost | No ceiling (project-based) | NHS trusts, local authorities, schools, colleges, universities, fire/police, central government NDPBs | Phase 3 closed; Phase 4 expected 2025–28 subject to spending review |
| Salix 0% Interest Loan | Salix Finance | 100% of project cost | £5m+ (programme-level) | Same as PSDS eligibility; also housing associations in some rounds | Ongoing — open applications year-round; no competitive round required |
| Warm Homes: Local Grant (WH:LG) | Local authorities (via MHCLG) | Up to 100% | Household-level; not commercial | Low-income households in social/private rental; NOT commercial | Active 2025–2027; not relevant for commercial solar |
| UK Shared Prosperity Fund (UKSPF) — local allocations | Local authorities / LEPs | Variable; 20–80% | Typically £25k–£250k | SMEs, community organisations; varies by local authority allocation | 2022–2025 programme; 2026+ allocation subject to spending review |
| Business Energy Efficiency Programme (BEEP) | Business Energy Scotland | Grant + interest-free loan | Up to £100k grant | Scottish SMEs | Active 2025–26 under current Scottish Government allocation |
Regional and combined authority commercial solar funding 2026
| Region | Fund name | Type | Rate / amount | Eligibility | Administrator |
|---|---|---|---|---|---|
| Greater Manchester | Clean Business Grant / Business Growth Hub green loans | Grant + loan hybrid | Grant: up to £15k; Loan: up to £150k at 3.5–6.0% | GMB-registered SMEs; energy audit required | Business Growth Hub (BGH) Manchester |
| West Yorkshire | West Yorkshire Investment Fund — Clean Energy Loans | Loan | Up to £200k at 4.0–6.5% | SMEs under 250 employees in WY CA area | West Yorkshire Combined Authority |
| South Yorkshire | South Yorkshire Mayoral Fund — Green Business Finance | Loan + grant | Grant: up to £10k; Loan: up to £100k | Businesses in Sheffield City Region | Sheffield City Region Business Investment |
| West Midlands | West Midlands Net Zero Fund | Loan | Up to £250k at 5.0–7.5% | West Midlands businesses; energy audit | West Midlands Combined Authority |
| Greater London | LOOP Fund / London Business Hub | Loan | Up to £100k at 3.0–5.5% | London-based SMEs employing 1–250 | London Business Hub / GLA |
| Midlands | Midlands Engine Investment Fund II (MEIF II) | Loan | Up to £250k | East and West Midlands SMEs via partner banks | NPIF partner banks |
| South West | South West Investment Group — Clean Business Loans | Loan | Up to £150k at 4.5–7.0% | SW England SMEs | South West Investment Group |
| North East | North East Fund — Business Finance | Loan | Up to £150k | North East LEP area businesses | North East Fund Ltd |
| Cornwall | Cornwall and Isles of Scilly Investment Fund | Loan + grant | Grant: up to £25k; Loan: up to £150k | Cornwall-registered businesses | British Business Bank / CIoS Growth Programme |
| Scotland (all) | Business Energy Scotland (BES) — SEEP loans | Loan + audit grant | 0% loan up to £100k; free energy audit | Scottish businesses (SMEs and non-SMEs) | Business Energy Scotland (Energy Saving Trust) |
| Wales (all) | Wales Net Zero Fund / Flexible Investment Fund | Loan | Up to £250k | Welsh-registered businesses | Development Bank of Wales |
| Northern Ireland | InterTradeIreland / Invest NI | Grant + loan | Varies by round | NI-registered businesses | Invest Northern Ireland |
How to check if a combined authority fund is currently open
Combined authority green loan and grant programmes open and close on rolling bases — a fund that was active in Q1 2026 may be oversubscribed and closed by Q3. The fastest way to check: (1) Search the fund name plus “apply now” or “current round”; (2) Contact your local Growth Hub — the national network of Growth Hubs (businesssupport.gov.uk) maintains live information on all regional business finance programmes; (3) Check the British Business Bank's “Finance Hub” at british-business-bank.co.uk/finance-hub which aggregates regional fund availability. Do not rely on grant directories — they are often out of date.
Devolved nation grant programmes for commercial solar
| Nation | Key programme | Grant/loan type | Notes |
|---|---|---|---|
| Scotland | Non-Domestic Energy Efficiency Fund (NDEEF) — Public Sector | Grant (60–80%) | Equivalent to PSDS for Scottish public sector bodies; administered by Scottish Government / Zero Waste Scotland |
| Scotland | Business Energy Scotland (BES) — SEEP | 0% loan + audit | Open to all Scottish businesses; interest-free loans for energy efficiency including solar |
| Wales | Warm Wales (public sector) | Grant | Welsh Government equivalent to PSDS for Welsh public bodies; administered via Local Energy Wales |
| Wales | Development Bank of Wales — Flexible Investment Fund | Loan | 3–7.5% loans for Welsh businesses including SMEs funding solar |
| Northern Ireland | Strategic Investment Board / DfE grants | Grant (varies) | NI public sector solar via NIEA and SIB; private sector via Invest NI SMART grants |
| Northern Ireland | Reconnect Renewables Grant Scheme | Grant (up to £10k for SMEs) | NI-specific renewable energy grants; check NIBusinessInfo.co.uk for current round status |
Combining grants with private sector finance: the stacking rules
Most grant programmes allow stacking — receiving both a grant and a commercial loan or lease for the same project — as long as the combined public sector contribution (grants + subsidised loans) does not exceed the Subsidy Control thresholds under the UK's post-Brexit subsidy control framework. For commercial solar, the practical limit is: (1) UKSPF and combined authority grants: maximum £500k in Minimal Financial Assistance (MFA) over any 3-year period; (2) PSDS and Salix: no MFA limit (public sector is not subject to subsidy control); (3) Stacking a combined authority grant (e.g. £25k) with a commercial green loan for the balance is permitted in all regions as long as the grant does not exceed MFA thresholds. Always declare any prior grants received in the last 3 years when applying for a new programme.
Is commercial solar "capital free"? The three routes to zero upfront cost
"Capital free commercial solar" means deploying a solar system with no upfront capital payment from the business. In the UK commercial solar market, three distinct structures achieve this — each with different ownership and financial consequences.
| Route | Capital outlay | Who owns the panels | Capital allowances | Ongoing payment |
|---|---|---|---|---|
| Power Purchase Agreement (PPA) | Zero | Developer/funder owns the system | Developer claims AIA/FYA | Pay per kWh consumed at discounted rate (typically 10–30% below grid tariff) |
| Operating lease | Zero (nil to first rental) | Lessor (leasing company) owns | Lessor claims AIA/FYA | Fixed monthly lease rental; off-balance-sheet under older UK GAAP |
| PSDS grant + Salix 0% loan | Zero or minimal | Public sector body owns | Public body claims | Salix loan repaid from energy savings (interest-free); often fully self-financing |
Which capital-free route is right for your business?
PPA suits large consumption sites (above 200kWp) that want simplicity — one monthly bill per kWh, no capital, no maintenance responsibility. Operating lease suits businesses that want off-balance-sheet treatment (improving return on assets) but with fixed monthly payments not linked to generation. PSDS + Salix is only available to public sector bodies — but for NHS trusts, councils, and universities it is the most financially beneficial route by far, combining grant capital with zero-interest loan repayable from energy savings.
UK commercial solar grants 2026: all major schemes compared
| Grant scheme | Who it's for | Typical grant amount | Applies to solar? | Application route |
|---|---|---|---|---|
| Public Sector Decarbonisation Scheme (PSDS) | NHS, councils, universities, ALBs (England only) | 60–80% of eligible project cost | Yes — primary eligible measure | Via Salix Finance (Delivery Partner); competitive rounds |
| Salix Energy Efficiency Loans (SEEL) | Eligible public sector bodies | 0% interest loan (not a grant) | Yes — solar + battery | Via Salix Finance; no competitive round — applications ongoing |
| UK Shared Prosperity Fund (UKSPF) | Businesses in UKSPF priority areas (via Local Authority) | 15–40% of eligible capital cost (varies by LA) | Yes | Via your Local Authority's business support team; rounds set by each LA |
| Combined Authority Clean Growth Funds | Businesses in CA areas (WMCA, West of England, Greater Manchester, Tees Valley, South Yorkshire etc.) | 25–50% of eligible capital cost, typically capped at £75,000–£150,000 | Yes | Via Combined Authority business portal; competitive rounds |
| Rural England Prosperity Fund (REPF) | Rural businesses in England (via Rural LA) | Up to 40%, typically capped at £75,000 | Yes — farm, rural business, rural accommodation | Via your District/Borough Council rural support team |
| NDEEF (Scotland) | Public bodies in Scotland | Capital grant; rate varies by round | Yes | Via Business Energy Scotland or Scottish Government |
| SEEP 0% loans (Scotland) | Scottish SMEs | 0% loan up to £100,000 | Yes | Via Business Energy Scotland |
| Nest/Warm Homes (Wales) | Welsh public bodies and social landlords | Capital grant; rate varies | Limited — check scheme conditions | Via Natural Resources Wales / Welsh Government |
| SSE Industrial Energy Efficiency (NIIS — NI) | NI businesses via Invest NI | Up to 30% | Yes | Via Invest Northern Ireland |
| Net Zero Innovation Portfolio (NZIP) | UK businesses via Innovate UK innovation grant | Up to 70% for early-stage; less for demonstration | Yes — where solar is part of innovation project (not standard deployment) | Via Innovate UK IFS (Funding Service); competitive rounds |
How to identify your eligible grants: a 5-question checklist
Step 1: Are you a public sector body?
If yes: PSDS (England) or NDEEF (Scotland) or Welsh Government scheme — go direct to Salix Finance (England) or Business Energy Scotland (Scotland). These are your largest opportunities — up to 80% capital grant. If no: skip to step 2.
Step 2: Are you in an English Combined Authority area?
WMCA, West of England, Greater Manchester, South Yorkshire, Tees Valley, North of Tyne, and others run their own clean growth capital grant programmes. Check your Combined Authority business support portal. If yes: apply alongside other funding for combined coverage. If no: check step 3.
Step 3: Are you in a UKSPF priority area?
UKSPF is managed by Local Authorities. Most LAs with significant deprivation funding allocations have run UKSPF business capital grant rounds. Check your LA's economic development or business support team. UKSPF rounds are often time-limited and underadvertised.
Step 4: Are you in a rural area?
Rural England Prosperity Fund (REPF) provides up to 40% grant for rural businesses including farms, rural accommodation, and rural food/drink producers. Check with your District Council rural support officer. Farm solar specifically may also qualify for Farming in Protected Landscapes (FIPL) grants if in a National Park or AONB.
Step 5: Is your solar project innovative in any way?
Innovate UK's Net Zero Innovation Portfolio funds ground-breaking approaches — bifacial arrays on unusual structures, agrivoltaic installations, floating solar, novel storage integration. If your project has a genuine innovation component (not just a standard commercial rooftop), an Innovate UK grant application may be viable.
Can I combine multiple grants on the same solar project?
Grant stacking (combining multiple grants) is possible but requires careful management. Each grant programme has rules on maximum aid intensity (the maximum percentage of total project cost that can come from public funds). UK public grants are subject to Subsidy Control Act 2022 rules: most grants are under the Small Amounts of Financial Assistance (SAFA) exemption (cumulative cap of £315,000 over 3 years) or the de minimis state aid equivalent. Before stacking grants, check with each funder whether they allow combination with other public grants — PSDS explicitly allows combination with Salix SEEL; UKSPF often does not allow stacking with PSDS for the same eligible cost.
What is the REAP grant (Rural England)? Does it cover solar?
The Rural England Prosperity Fund (REPF) replaced the Rural Development Programme for England (RDPE) in 2023. REPF provides capital grants for rural businesses and rural tourism. Solar PV on rural commercial buildings (farms, food processors, rural pubs and accommodation) is an eligible measure. Applications go through your Local Authority; check for current round openings with your LA economic development team.
Can a limited company access any capital grants for commercial solar?
Most UK commercial solar capital grants are targeted at public sector bodies (PSDS, Salix) or SMEs in specific regions (UKSPF, CA grants). Standard for-profit limited companies operating at full commercial scale (not SMEs) have very limited access to direct capital grants. The primary financial support for commercial-scale solar for profitable limited companies is the tax incentive route: Annual Investment Allowance (100% year one CT deduction) and 50% First Year Allowance. Combined, these cut the effective cost of solar by 25% (at standard CT rate) in year one — the equivalent of a 25% capital grant.
Related: incentives and public sector finance
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