Renewable Energy Grants and Tax Relief for UK Businesses in 2026

Renewable energy grants for business: what actually applies in 2026

Most businesses looking into renewable energy grants for business funding expect a straightforward pot of money to apply for. The honest picture is more useful than that: the bulk of UK support now flows through the tax system rather than direct cash grants, and it is more generous than most owner-directors realise. A profitable company can recover roughly a quarter of the cost of an owned solar, battery, heat pump or EV charging project through capital allowances alone, before any grant is counted.

This guide sets out the real schemes, the figures behind them, and which applies to which technology, so you can build a defensible funding case rather than chase support that was never available to commercial buildings in the first place. One warning up front: the domestic Boiler Upgrade Scheme does not apply to commercial or non-domestic buildings, whatever a cold-caller tells you. The commercial routes are different, and they are covered below.

Tax relief is the main lever, not grants

The single biggest source of funding for owned renewable kit is the Annual Investment Allowance and Full Expensing. Solar PV, battery storage, EV charge points and heat pumps all qualify as plant and machinery, which means a company paying corporation tax can deduct the full capital cost from its taxable profit.

Under 100% Annual Investment Allowance, up to the £1m annual cap, the whole cost comes off taxable profit in year one. Companies investing above that cap use Full Expensing on qualifying plant. In practice a profitable business recovers roughly 25% of the project cost through the tax saving, and if it is VAT-registered the VAT is separately reclaimable on top.

This matters because it changes how you should read a headline price. A £100,000 solar array is not a £100,000 decision for a profit-making company: after capital allowances the effective net cost is closer to £75,000, and lower again once export income and bill savings are counted. We work these numbers through in detail on the cost page, because the tax position is often the difference between a project that clears the board and one that stalls.

The grants that do exist, by technology

Beyond tax relief, a handful of genuine schemes apply to specific technologies. The table below summarises the main ones and what they are worth.

Scheme	Applies to	Typical value
100% AIA / Full Expensing	Solar, battery, heat pumps, EV chargers	Full capex off taxable profit (~25% recovered)
Workplace Charging Scheme (WCS)	Workplace and fleet EV chargepoints	£350 per socket, up to 40 sockets
EV infrastructure grant	Wiring and groundworks for SME chargepoints	Up to £15,000
Smart Export Guarantee (SEG)	Exported solar and other generation	Typically 4-15p per kWh exported
IETF	Energy-intensive manufacturing and industry	Grants from £100,000 upward
PSDS / Salix	Public sector, schools, NHS, colleges, councils	Grant funding and interest-free loans

The Workplace Charging Scheme is the most accessible grant for most commercial sites. It pays £350 per socket, up to 40 sockets, and stacks across multiple sites. The chargepoints and the installer must both be OZEV-approved, so it pays to check that before committing. For SMEs, the EV infrastructure grant adds up to £15,000 toward the wiring and groundworks that often make up the hidden cost of a charging project. Both are covered in more depth on our EV charging pillar, and pairing chargers with on-site solar lets you charge on self-generated power at a few pence per kWh.

The Smart Export Guarantee is not a grant but it is real income. Any MCS-certified generation up to 5 MW can be paid for the surplus it exports, typically between 4 and 15p per kWh depending on the tariff and supplier. It is most valuable for sites that generate more than they use at weekends or overnight, such as offices, retail and schools. A competitive SEG tariff improves the commercial solar business case without requiring any application beyond registering the system.

Sector-specific funding: manufacturing and public bodies

Two larger schemes suit specific organisations. The Industrial Energy Transformation Fund offers grants from £100,000 upward for feasibility and deployment of efficiency and decarbonisation measures at energy-intensive manufacturing and industrial sites in England, Wales and Northern Ireland. It runs in competitive phased rounds, so the current open window matters, and it suits larger factory heat, process and generation projects rather than a modest rooftop array.

The Public Sector Decarbonisation Scheme, delivered through Salix, is the main route for public buildings: schools, the NHS, colleges and councils. It provides grant funding and interest-free loans covering heat pumps, solar and wider decarbonisation, and it is the principal funding line for commercial-scale heat pumps in the public sector. This is worth stressing, because heat pumps are where the Boiler Upgrade Scheme confusion does the most damage. For non-domestic buildings the funding routes are capital allowances, PSDS and the IETF, never the domestic scheme.

It is also worth checking regional support before you commit. Combined authorities such as GMCA, WMCA, WYCA and LCRCA, along with local Growth Hubs, periodically run SME decarbonisation grant rounds worth anywhere from £1,000 to £50,000, sometimes with a free energy audit attached. These schemes open and close, so a quick check of your combined authority is worth doing early.

Funding without capital: PPAs and asset finance

Not every route requires a grant or your own capital at all. A Power Purchase Agreement lets a funder install and own on-site generation while you simply buy the power at a fixed rate below grid price, with zero capex. Corporate and sleeved PPAs go further, contracting clean power from an off-site wind or solar farm at a fixed long-term price. This removes the balance-sheet barrier entirely and is often the fastest way to get a board to yes. We explain the structures on our PPA and procurement pillar.

Asset finance is the middle path: it spreads the cost over five to seven years and is usually cash-flow positive from month one, because the energy savings exceed the repayment. The point of an independent adviser is to model cash purchase, asset finance and PPA side by side, with the internal rate of return and the carbon outcome of each, so the decision is made on merit rather than on which single option a salesperson happens to offer.

Sequence the funding, not just the technology

Grants and tax relief are only half the picture. The other half is spending in the right order so each pound earns its return. The cheapest kWh is the one you never use, so an energy audit and efficiency measures come first, typically removing 8-25% of consumption at a one to four year payback. Generation, usually solar, follows and is sized to the reduced demand. Battery storage and EV charging come next, then heat pumps to remove Scope 1 gas.

A representative example shows why order matters. A modelled South West office paying £34,000 for electricity and £9,000 for gas cut demand 19% through efficiency first, which meant the solar and heat pump that followed were sized smaller and cheaper. 100% AIA recovered a quarter of the capital, and the gas boiler came out entirely, taking Scope 1 emissions to near zero. Funding a smaller, right-sized system is almost always better value than grant-funding an oversized one.

How to claim what applies to you

The practical steps are straightforward. Confirm your corporation tax position so you know the value of capital allowances. Check whether any EV charging qualifies for the WCS and infrastructure grant, and that your hardware and installer are OZEV-approved. Register any solar for a competitive SEG tariff. If you are a manufacturer or public body, check the current IETF or PSDS window. And look at your combined authority for regional SME grants before you commit.

Above all, size the system to a reduced, well-managed demand first, because that decision affects every funding figure that follows. Our grants and funding page keeps the current scheme details and thresholds up to date, and if you want the numbers run for your own site, a free assessment and costed roadmap will model the tax relief, grants and finance options against your actual meter data. You can also read the common questions on our FAQs page. The support is real and often larger than expected, but only if it is matched to the right measures in the right order.