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.
Five programme categories
1. Public Sector Decarbonisation Scheme (PSDS)
Eligible: Public-sector and not-for-profit organisations — schools, MATs, NHS Trusts, councils, universities, FE colleges, emergency services, charities (property-owning).
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: 50–70% of 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: Resource Efficient Scotland, Scottish Enterprise Decarbonisation Fund, Scotland Heat Network. Public-sector and SME support.
Wales: Welsh Government Energy Service, Local Energy in Wales, Cardiff Capital Region City Deal.
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:
| Route | Typical value | Application overhead | Eligibility |
|---|---|---|---|
| 50% FYA + special-rate | 17–19% of capex | None — standard CT return | Profitable trading companies, year-end before 31 Mar 2026 |
| AIA | Up to 25% of capex | None — standard CT return | First £1m qualifying spend per period |
| PSDS Phase 4 | 30–80% of capex | 200–300 hours | Public-sector + not-for-profit only |
| Innovate UK | 50–70% of R&D | 100–200 hours | Novel demonstration projects only |
| Regional CA grants | £5k–£50k typical | 40–80 hours | SME within geography, programme-specific |
| Foundation grants | £10k–£250k | 80–150 hours | Charity-sector typically |
Frequently asked questions
What renewable energy grants are available in the UK in 2026?
Are renewable energy grants available for SMEs?
What's the difference between PSDS and other UK renewable grants?
Are there UK government grants for renewable energy businesses?
Can I get a UK grant for a solar + battery system?
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 (substantial grant access via PSDS), and the agricultural sector (FETF grant). Understanding which programmes are available to your organisation type prevents wasted application effort.
Private sector businesses: primarily tax incentives, not capital grants
Most capital grant programmes for renewable energy in the UK are restricted to public sector organisations or charities. Private sector businesses should focus on tax-based incentives:
50% First Year Allowance — worth up to 12.5% of system cost
50% FYA on qualifying energy-saving 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.
UKIB green lending (concessionary rate, not grant)
The UK Infrastructure Bank offers concessionary green loans to private sector businesses for qualifying green infrastructure projects. The UKIB 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: PSDS is the primary capital grant
PSDS Phase 4 — up to 67% capital grant
The Public Sector Decarbonisation Scheme provides capital grants of up to 67% for qualifying decarbonisation works at NHS Trusts, local authorities, schools, FE colleges, police, fire, and other eligible public bodies. PSDS is competitive — applications are scored on carbon cost-effectiveness and subject to available funding. Oversubscription is common; the scheme is periodically open for applications. Check current status at the DESNZ grant management portal.
Salix Finance 0% interest loans — all public sector
Salix Finance provides 0% interest revolving loans to all public sector organisations (including schools, local authorities, NHS, police, universities) for energy efficiency and renewable energy projects. Repayment is from verified energy cost savings over 3–10 years. Salix is always open — no competitive bidding, no application window. The effective cost of a Salix loan is zero interest vs 6–9% commercial market rate.
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: FETF and SALIX for cooperative sectors
Farming Equipment and Technology Fund (FETF) — up to 40% capital grant
The FETF is a competitive capital grant for agricultural businesses purchasing approved energy-saving and productivity equipment. Solar PV for on-farm energy use (not for export sale) is an eligible FETF item. Grant rates of 25–40% on approved equipment costs. Applications via the Rural Payments Agency when the scheme is open (periodically announced by DEFRA).
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.
Map grants and tax allowances against your project
Send organisation type, postcode, accounting position, and project size. We map your eligibility across grants and tax allowances, then recommend optimal funding mix in five working days.
Request a finance review