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UK Renewable Energy Grants 2026

UK renewable energy grants — 2026 reference

Comprehensive reference for UK renewable energy grants available to businesses, public sector, and not-for-profit organisations in 2026. Five programme categories mapped, eligibility by organisation type, and how to assess grant route vs tax allowance route.

Realistic expectations (checked 3 November 2026): for a business that wants rooftop solar there is no open UK-wide capital grant. The IETF's last window closed on 19 April 2024 and it never funded solar PV; PSDS closed to new applications in November 2024; Innovate UK competitions fund research and demonstration, not a standard array. Most businesses fund renewables with cash and the capital allowances, a green loan or hire purchase, a lease or a PPA.

Not sure which finance route fits your project? Answer six questions for an indicative shortlist of cash, hire purchase, loan, lease or PPA, ranked for your tax position, premises and budget.

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Five programme categories

1. Public Sector Decarbonisation Scheme (PSDS): closed

Was eligible: public bodies in England — schools, MATs, NHS trusts, councils, universities, FE colleges and emergency services. PSDS closed to new applications in November 2024.

Scale: Multi-billion-pound capital across Phase 1–4 since 2020.

Grant intensity: 30–80% of qualifying capital spend, depending on cost-per-tonne CO₂ saved.

Detail: PSDS detailed page + Phase 4 application strategy.

2. Innovate UK / UKRI Clean Energy

Eligible: Public + private sector for novel demonstration projects with R&D component.

Scale: Project-specific competitions, typical award £100k–£2m.

Grant intensity: set competition by competition for qualifying R&D and demonstration costs.

Best fit: Solar + storage demonstration, novel inverter architectures, agrivoltaic pilots, second-life battery integration.

3. Regional combined-authority programmes

Eligible: Public + private sector within specific combined-authority footprints (MEEF London, GMCA Greater Manchester, WMCA West Midlands, others).

Scale: Multi-million-pound facilities, often revolving (loan-then-recycle).

Terms: Mix of senior debt, capital grants, equity. Varies by programme.

Detail: Full UK regional fund table covering 30+ programmes.

4. Devolved-nation schemes

Scotland: the Business Energy Scotland SME Loan (not taking solar PV applications) and the CARES Community Buildings Fund for charities and non-profits.

Wales: the Development Bank of Wales Green Business Loan Scheme for businesses; the Welsh Government Energy Service advises public bodies and community groups.

Northern Ireland: Limited dedicated capital; most projects flow through standard UK-wide tax routes.

Note: UK-wide tax allowances apply identically in all four nations.

5. Charitable foundation grants

Big Lottery Climate Action Fund: £50k–£250k for community decarbonisation including faith-based organisations.

Patagonia Environmental Grant Programme: £10k–£40k for environmental projects, competitive.

Garfield Weston Foundation: Wider charitable infrastructure including renewable energy.

Other: Diocesan / denominational funds for faith-group property; sector-specific foundations (sports, education, arts).


Grants vs tax allowances — which delivers more value?

For most UK private-sector businesses, tax allowances deliver materially more value than grant funding for typical commercial solar:

RouteTypical valueApplication overheadEligibility
50% FYA + special-rate17–19% of capexNone — standard CT returnCompanies paying corporation tax, on special-rate spend above the AIA limit
AIAUp to 25% of capexNone — standard CT returnFirst £1m qualifying spend per period
Innovate UKSet per competition100–200 hoursNovel demonstration projects only
Regional CA grants£5k–£50k typical40–80 hoursSME within geography, programme-specific
Foundation grants£10k–£250k80–150 hoursCharity-sector typically

Frequently asked questions

What renewable energy grants are available in the UK in 2026?
Five UK programme categories: (1) the Public Sector Decarbonisation Scheme (PSDS), which closed to new applications in November 2024 and is listed for reference; (2) Innovate UK Clean Energy programmes for novel demonstration projects; (3) regional combined-authority programmes (MEEF, GMCA, WMCA, others); (4) devolved-nation schemes in Scotland, Wales, NI; (5) charitable foundation grants. Different programmes target different organisation types — eligibility maps to your sector.
Are renewable energy grants available for SMEs?
Limited but real. Innovate UK competitions for novel projects (rates set call by call; research and demonstration only). Regional combined-authority SME programmes (typically £5k–£50k match-funding). Business Energy Scotland advice for Scottish SMEs and Business Wales advice for Welsh SMEs (neither pays a solar grant). Most UK SMEs find better value in the standard tax allowance route (50% FYA, AIA) than chasing grant funding for typical commercial solar.
How did PSDS differ from other UK renewable grants?
PSDS (Public Sector Decarbonisation Scheme) was for public-sector bodies and was the largest UK decarbonisation grant by capital, but it closed to new applications in November 2024. Other UK grants are typically more narrow: Innovate UK targets innovation specifically, regional programmes target specific geographies, foundation grants target specific charity-sector projects.
Are there UK government grants for renewable energy businesses?
Limited direct grants. Most "grants for renewable energy businesses" in the UK refer to (a) the Renewable Heat Incentive (now closed, replaced by Boiler Upgrade Scheme for domestic), (b) Contracts for Difference for utility-scale generation (£100m+ projects), or (c) Innovate UK competitions for innovation-stage businesses. For typical commercial-solar-using businesses, the funding mechanism is the tax allowance system (50% FYA, AIA), not direct cash grants.
Can I get a UK grant for a solar + battery system?
Storage was historically excluded from many solar-specific grant schemes but is increasingly bundled into broader decarbonisation programmes. PSDS funded solar + battery inside heat-led bundles until it closed in November 2024. Innovate UK funds storage demonstration projects. Some regional programmes specifically support storage where it provides grid-services value. Eligibility is project-specific — check current programme rules at application.

Related

Renewable energy grants for UK businesses — comprehensive guide 2026

UK businesses have access to a range of grants, loans, and incentive programmes for commercial renewable energy and solar PV. Grant availability differs significantly between private sector businesses (limited grant access), public sector organisations (no national grant since PSDS closed in November 2024), and the agricultural sector (Improving Farm Productivity grant at 25%). Understanding which programmes are available to your organisation type prevents wasted application effort.

Private sector businesses: primarily tax incentives, not capital grants

There is no national capital grant for private-sector solar, and the main public-sector grant (PSDS) closed in November 2024. Private sector businesses should focus on tax-based incentives:

50% First Year Allowance — worth up to 12.5% of system cost

50% FYA on new special-rate plant and machinery (including solar PV) creates a year-1 CT saving of 12.5% of the installation cost at the 25% CT rate. On a £500,000 installation, this equals £62,500 in year-1 tax relief — the practical equivalent of a 12.5% grant. Unlike capital grants, FYA is available to any CT-paying business with no competitive application process and no deadlines.

Annual Investment Allowance — 100% first-year relief up to £1m

AIA provides 100% first-year tax relief on up to £1m of qualifying capital expenditure per year. For most SMEs installing solar below £1m, AIA is the most impactful incentive — equivalent to a 25% grant on the full system cost in year 1 (at the 25% CT rate). No application, no competition, no reporting requirements beyond the standard CT return.

NWF green lending (concessionary rate, not grant)

The National Wealth Fund (formerly the UK Infrastructure Bank) offers concessionary green loans to private sector businesses for qualifying green infrastructure projects. The NWF rate (typically 5.5–7.5% for qualifying projects) is below the market rate from commercial lenders. This is not a grant — the loan must be repaid — but the interest saving over a 10-year term can represent £40,000–80,000 on a £500,000 facility vs market rate.

Public sector: after PSDS

PSDS Phase 4 — closed to new applications

The Public Sector Decarbonisation Scheme paid capital grants for decarbonisation works at NHS trusts, local authorities, schools, FE colleges, police, fire and other public bodies from 2020. PSDS closed to new applications in November 2024, and in June 2025 the government said it would fund no projects beyond those already awarded. Public bodies now fund solar from capital budgets or borrowing, operating leases or power purchase agreements.

Salix loans: status in England

We could not confirm an open Salix solar loan for English public bodies. Salix loan schemes for public bodies run in Scotland and Wales; check current terms with Salix before planning around one.

Community Ownership Fund (community-run facilities)

The Community Ownership Fund provides grants of up to £1m to community groups taking ownership of at-risk community assets, including community-run sports clubs, village halls, and pubs. Solar PV as part of a wider facility renovation is fundable. COF is periodically opened by DCMS.

Agriculture: IFP grants

Improving Farm Productivity (IFP) — the England farm solar grant

The IFP round of DEFRA's Farming Investment Fund is the competitive capital grant that has funded on-farm solar in England, at 25% of eligible cost (solar for on-farm use, not export sale). The separate FETF covers listed equipment items and has not been a general solar-PV route. Applications go through the Rural Payments Agency when a window is open — verify the current round before ordering equipment.

Farming Transformation Fund (FTF) — Slurry and Water Management

The FTF provides capital grants for farm infrastructure improvements. Solar powering slurry pumping, irrigation, or other FTF-qualifying equipment may be bundled into an FTF application. Coordination with an agricultural grant specialist is recommended before application.

Smart Export Guarantee — ongoing tariff for exported electricity

The Smart Export Guarantee (SEG) is not a capital grant but an ongoing income stream for businesses exporting surplus solar electricity to the grid. Licensed SEG providers (energy companies with 150,000+ domestic customers) must offer an export tariff to eligible commercial systems. Current SEG rates range from £0.04/kWh (minimum, Octopus's Outgoing Fixed) to £0.12/kWh+ on variable/agile tariffs. For a 500kWp system exporting 25% of generation, SEG income is approximately £11,250/year at £0.10/kWh — a modest but real contribution to project economics.

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