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There are still grants and funding options available for commercial solar panels in the UK in 2026. But the landscape changed significantly on 1 April 2026 when the UK Shared Prosperity Fund closed to new applications.
This guide covers everything that's still open right now. From the Local Growth Fund and Salix Finance to AIA tax relief and 0% VAT, here's what your business can actually access today.
This guide covers what's actually available right now: what's still open, what's replaced the UKSPF, and what tax incentives remain in place.
What's available now
- Annual Investment Allowance: 100% tax deduction on full system cost in year one
- 0% VAT on solar equipment: confirmed until at least 31 March 2027
- Smart Export Guarantee: ongoing payments for surplus electricity exported to the grid
- Salix Finance: interest-free loans for public sector buildings, schools, councils, NHS
- Public Sector Decarbonisation Scheme: grants for public buildings via Salix (runs to 2027/28)
- Local Growth Fund: business grants in 11 Mayoral Authority areas in North and Midlands
- Rural Asset Prosperity Fund: capital grants for rural businesses in designated areas
- Scotland SME Loan Scheme: up to £100,000 interest-free for Scottish businesses
The UKSPF has closed — what that means for commercial solar grants
The UK Shared Prosperity Fund was the main route through which businesses accessed grants for solar panels on commercial buildings in 2024 and 2025. At its peak it funded up to 75% of installation costs for eligible SMEs. It closed to new applications on 31 March 2026.
Some local authorities may still have underspent UKSPF allocations they can grant for projects already in progress, with a final completion deadline of 30 September 2026. But if you haven't already applied and been approved, the UKSPF isn't an option.
The good news is that what replaced it and what was always available alongside it still offers substantial financial support for commercial solar.
What's replaced the UKSPF: the Local Growth Fund
From 1 April 2026, the UKSPF is partly replaced by the Local Growth Fund, a £1.5 billion, three-year programme administered through Combined Authorities.
The critical thing to know: it's not available everywhere. The Local Growth Fund is restricted to 11 Mayoral Strategic Authority areas mostly in the North of England and Midlands, chosen on the basis of having GDP per head below the UK average and significant 'productivity catch-up potential.'
| Mayoral Authority area: | Includes: |
|---|---|
| Greater Manchester | Manchester, Salford, Bolton, Oldham, Stockport and surrounding areas |
| West Midlands | Birmingham, Coventry, Wolverhampton, Solihull |
| West Yorkshire | Leeds, Bradford, Calderdale, Kirklees, Wakefield |
| South Yorkshire | Sheffield, Rotherham, Barnsley, Doncaster |
| Liverpool City Region | Liverpool, Wirral, Knowsley, St Helens, Sefton, Halton |
| Tees Valley | Middlesbrough, Stockton, Darlington, Hartlepool, Redcar |
| North East | Newcastle, Sunderland, Gateshead, South Tyneside and others |
| East Midlands | Derby, Nottingham, Leicester and surrounding counties |
| South East Midlands | Milton Keynes, Northampton, Luton, Bedford |
| West of England | Bristol, Bath, South Gloucestershire, North Somerset |
| Devolved: Scotland, Wales, Northern Ireland | Separate allocations — contact devolved administrations |
If your commercial building is in one of these areas, contact your Combined Authority or Growth Hub to find out what business support programmes are being set up. Specific solar-related schemes under the Local Growth Fund are still being confirmed at local level, the fund launched on 1 April 2026 and individual programmes are rolling out through spring and summer 2026.
If your business is outside these areas in Cornwall, Lancashire, most of the South East, rural England, or many parts of the Midlands and East, the Local Growth Fund does not apply to you. The Pride in Place Programme, which also launched in April 2026, is a neighbourhood regeneration fund, not a business grant scheme.
Not sure whether your area qualifies? OVO's solar team can check what funding is available in your location as part of your free commercial solar survey.
Public sector buildings: Salix Finance and the PSDS
If your commercial building is in the public sector, a school, NHS trust, local authority office, university, or housing association, Salix Finance is still the main route to funding solar panels with no upfront cost.
Salix provides interest-free loans for energy efficiency and renewable energy projects. The loan is repaid from the energy savings the project generates, meaning it's typically cash-flow neutral from the first year. You install the solar panels and repay Salix with the money you save on your electricity bills.
| Feature: | Details: |
|---|---|
| Who it's for | Schools, NHS trusts, councils, universities, housing associations |
| How it works | Interest-free loan covering the full project cost |
| Repayment | From energy savings — typically 5–8 year repayment terms |
| Upfront cost | None — Salix covers the full installation cost |
| Status | Still open — apply at salix.co.uk |
The Public Sector Decarbonisation Scheme (PSDS) goes further, it provides direct grants, not loans, to public sector organisations for decarbonising their buildings. Solar panels qualify as part of a PSDS project, particularly when combined with other measures like heat pumps or insulation. The current PSDS phase has approximately £940 million in funding running through 2027/28.
Rural businesses: the Rural Asset Prosperity Fund
If your commercial building is in a rural area, the Rural Asset Prosperity Fund is worth looking into. It provides capital grants for rural businesses and communities, and solar panels on commercial buildings are a qualifying project.
| Feature: | Details: |
|---|---|
| Who can apply | Businesses and community organisations in designated rural areas |
| Grant amount | Typically 25–50% of project costs, individual awards of £5,000–£50,000 |
| Eligible buildings | Commercial farm buildings, rural offices, rural community facilities |
| How to apply | Through your local authority — check rural area designation first |
| Status | Still open — check current availability with your local council |
Agricultural businesses should also check the Farming Investment Fund, which can include grants for renewable energy measures on farm buildings.
Scottish businesses: interest-free loans up to £100,000
Scottish SMEs have access to one of the best commercial solar funding routes in the UK through the Home Energy Scotland Business Loan Scheme. Unlike most grant programmes, this is available across Scotland rather than being restricted to specific local authority areas.
| Feature: | Details: |
|---|---|
| Who can apply | SMEs based in Scotland (fewer than 250 employees) |
| Loan amount | Up to £100,000 interest-free for energy upgrades including solar PV |
| Repayment | Interest-free — repaid from energy savings |
| Eligible measures | Heat pumps, insulation, other low-carbon upgrades |
| How to apply | Via Home Energy Scotland — homeenergyscotland.org |
| Status | Still open |
Further information available at: https://businessenergyscotland.org/sme-loan-scheme-faqs/
Annual Investment Allowance: the biggest financial benefit for most businesses
If your commercial building doesn't fall into one of the grant-eligible categories above, the Annual Investment Allowance (AIA) is still substantial, and it's available to every UK business regardless of location, size, or sector.
The AIA lets you deduct the full cost of qualifying plant and machinery, including solar panels and associated equipment from your taxable profits in the year of installation. At the current corporation tax rate of 25%, that turns a £50,000 solar system into a £12,500 tax saving in year one.
| System cost: | AIA tax saving (25% CT): | Effective net cost after relief |
|---|---|---|
| £15,000 | £3,750 | £11,250 |
| £30,000 | £7,500 | £22,500 |
| £50,000 | £12,500 | £37,500 |
| £100,000 | £25,000 | £75,000 |
The AIA annual limit is currently £1 million, more than enough for the vast majority of commercial solar projects. There's no application and no eligibility criteria beyond being a UK business installing qualifying assets. You claim it through your corporation tax return.
Tax treatment depends on your business structure. Confirm the specific position with your accountant before finalising your investment decision.
0% VAT on solar panels for commercial buildings
Solar panels and associated installation work qualify for 0% VAT in most commercial building scenarios. This is confirmed until at least 31 March 2027, saving 20% on your hardware costs, typically £3,000–£15,000 on a standard commercial system.
For standard commercial buildings, offices, warehouses, factories, retail units, 0% VAT applies as standard. Buildings with mixed residential and commercial use may have a more complex position. Your OVO installer will confirm the correct VAT treatment as part of your quote.
Smart Export Guarantee: ongoing income from your commercial building's solar panels
Once your panels are installed, the Smart Export Guarantee (SEG) pays you for any surplus electricity your commercial building exports to the grid. It's not a grant, it's an ongoing revenue stream, but it forms part of the complete financial picture.
Most daytime businesses self-consume 80–90% of what their panels generate, so SEG is a secondary income stream rather than the main financial case. But for buildings with low weekend consumption, offices, for example, it adds up meaningfully over a year.
How to get the most from what's available right now
Even without the UKSPF, a business in the right location and category can still significantly reduce the effective cost of installing solar panels on a commercial building by stacking available incentives:
| Incentive: | Available to: | Typical benefit: | Status: |
|---|---|---|---|
| Annual Investment Allowance | All UK businesses | 25% of system cost back via tax in year one | Open — no expiry |
| 0% VAT on equipment | Most commercial buildings | 20% saving on hardware | Open until 31 March 2027 |
| Smart Export Guarantee | All MCS-certified systems | 4–20p per kWh exported | Open — ongoing |
| Local Growth Fund | Businesses in 11 Mayoral Authority areas | Varies — schemes still being set up | Open from April 2026 |
| Salix Finance / PSDS | Public sector only | Interest-free loan or direct grant | Open — runs to 2027/28 |
| Rural Asset Prosperity Fund | Rural businesses in designated areas | 25–50% of project cost as a grant | Open — check locally |
| Scotland SME Loan | Scottish SMEs | Up to £100,000 interest-free | Open |
| OVO 0% finance | Businesses buying solar through OVO | Spread cost with no interest | Open |
| UKSPF Low Carbon Project | SMEs in eligible areas | Previously up to 75% of costs | CLOSED 31 March 2026 |
Grant availability and amounts change. Always verify current status with your local authority or the GOV.UK business finance support finder before including any grant in your budget.
Speak to commercial solar expert today.
Frequently asked questions
Are there grants for solar panels on commercial buildings in 2026?
Yes, but the landscape changed significantly on 1 April 2026. The UKSPF, previously the main source of commercial solar grants, closed on 31 March 2026. What's available now depends on your location and building type: the Local Growth Fund for businesses in Mayoral Authority areas, Salix for public sector buildings, the Rural Asset Prosperity Fund for rural businesses, and the AIA tax deduction for all businesses.
Has the UKSPF really closed?
Yes. The UK Shared Prosperity Fund closed to new applications on 31 March 2026. Some councils may have underspent allocations for projects already approved before that date, with a completion deadline of 30 September 2026. But new commercial solar projects can no longer access UKSPF funding.
What's replaced the UKSPF for commercial solar grants?
The Local Growth Fund launched on 1 April 2026, but it only covers 11 Mayoral Strategic Authority areas in the North and Midlands. Businesses outside those areas don't have a direct UKSPF equivalent for commercial solar grants. The AIA tax deduction and 0% VAT remain available to all businesses, regardless of location.
Can I still get a grant for solar panels on a commercial building?
It depends where your building is and what sector you're in. Public sector buildings (schools, councils, NHS) can access Salix Finance and the PSDS. Rural businesses can apply to the Rural Asset Prosperity Fund. Businesses in the 11 Mayoral Authority areas may qualify for the Local Growth Fund once local schemes are set up. For everyone else, AIA and 0% VAT remain substantial incentives even without a direct grant.
Is the Annual Investment Allowance as good as a grant?
In some ways, yes. A 25% AIA saving on a £40,000 system is £10,000, which is comparable to many grant amounts. The difference is timing: a grant reduces your upfront outlay, while AIA reduces your tax bill at year end. Combined with OVO's 0% finance, the AIA can make a commercial solar installation cash flow neutral from day one.
How do I find out if my business qualifies for the Local Growth Fund?
Contact your Combined Authority or Growth Hub directly. The Local Growth Fund launched on 1 April 2026 and individual local programmes are still being confirmed. If you're in one of the 11 Mayoral Authority areas, this is the most likely route to grants for solar panels on your commercial building in 2026.
Book OVO's free commercial solar survey. We'll tell you which incentives apply to your building and location, handle all compliance paperwork, and give you a fixed price — with no commitment required.