Business Solar Grants: Your Definitive Guide in 2025
Unlocking Solar Power: The Ultimate Guide to UK Business Solar Grants in 2025
Looking to power your business with clean energy and slash your electricity bills?
Solar panels are a smart investment, and in 2025, there's a wealth of grants and incentives available to UK businesses to make the transition even more affordable. This comprehensive guide will walk you through everything you need to know to navigate the landscape of UK business solar grants and unlock the power of the sun for your company.
Why Invest in Solar Power for Your Business?
In today's world, businesses face mounting pressure to reduce their environmental impact and control operating costs. Solar power offers a compelling solution to both challenges.
Here's why investing in solar panels is a smart move for your business in 2025:
Lower Operating Costs: Reduce reliance on the national grid and protect your business from volatile energy prices. Generating your own electricity significantly cuts monthly energy bills, improving cash flow and long-term financial stability.
Stronger Return on Investment: Solar panels add tangible value to commercial properties while delivering long-term savings. With government grants, tax incentives, and reduced energy costs, businesses can often achieve payback within just a few years.
Increased Energy Independence: Shield your business from rising utility costs and potential energy supply disruptions. With solar power, you gain greater control over your energy production and expenditure.
Enhanced Sustainability and Corporate Image: Demonstrate a commitment to environmental responsibility and sustainability. A green energy strategy not only helps meet regulatory requirements but also strengthens your brand reputation, appealing to eco-conscious customers, investors, and partners.
Example of a commercial solar panel installation
The UK government and various regional bodies offer a range of grants and incentives to support businesses in adopting solar power. This guide breaks down the key programs available in 2025, helping you identify the best options for your business.
National UK Solar Grants and Incentives
1. Industrial Energy Transformation Fund (IETF)
Important Note: The IETF is NOT designed for typical businesses seeking to install standard solar panels.
The IETF focuses on supporting energy-intensive industries in England, Wales, and Northern Ireland to implement complex decarbonization projects. This fund targets businesses with high-energy consumption that are looking to make significant strides in reducing their carbon emissions.
IETF Eligibility:
Energy-intensive sectors (e.g., manufacturing, heavy processing, data centers)
High-energy consumption
Projects that deliver substantial energy and carbon savings
Types of Projects Funded by the IETF:
Process efficiency improvements
Waste heat recovery systems
Heat pumps
Feasibility studies for deep decarbonization
IETF Funding:
Match-funding (up to 50% for large companies, higher percentages for SMEs)
Grants can be substantial, reaching up to £6 million in previous rounds
IETF Application Process:
Competitive application process requiring detailed proposals
Applications submitted through Innovate UK
Is the IETF Right for Your Business?
Do you operate a large industrial facility with very high-energy usage?
Is your project focused on deep decarbonization of industrial processes, going beyond a simple solar panel installation?
If you answered yes to both questions, the IETF might be a suitable funding avenue. Contact us for detailed guidance and application support
2. UK Shared Prosperity Fund (UKSPF) - Local Solar Grants
The UKSPF empowers local authorities across the UK to distribute funding to businesses seeking to invest in energy efficiency and renewable energy projects, including solar panel installations.
Key Features of UKSPF Grants:
Localised Approach: Each local council or growth hub manages its own UKSPF grant schemes, tailoring them to the specific needs and priorities of their region.
Varying Availability: Grant amounts, eligibility criteria, and application processes will differ depending on your business location.
Typical Funding: Grants often cover 30-50% of eligible project costs, up to a predetermined cap (e.g., £5,000-£10,000).
How to Find UKSPF Solar Grants in Your Area:
Visit your local council's website: Search for "business grants," "sustainability grants," or "renewable energy grants." or contact us at Fusion Solar for more information.
Contact your regional Growth Hub: Growth Hubs provide support and guidance to businesses, including information on available funding opportunities.
Use the UK Government's business support finder tool: This online tool allows you to search for grants and support programs based on your business location and needs.
3. Smart Export Guarantee (SEG)
The SEG is a government-mandated tariff that requires energy suppliers to pay businesses for the renewable electricity they export to the grid. This applies to solar PV systems as well as other renewable energy installations.
Commercial solar energy and wind farm for renewable energy
Key Aspects of the SEG:
National Coverage: The SEG is available to businesses across England, Scotland, and Wales.
Varying Tariffs: The rates paid for exported electricity are set by individual energy suppliers and can range from 5p to 15p per kWh or higher.
Eligibility Requirements: To qualify for the SEG, your solar PV system must be MCS-certified (installed by an accredited installer link to https://fusion-solar.co.uk/commercial-solar-panels/ ) and you must have a smart meter to accurately measure your electricity export.
Maximizing Your SEG Earnings:
Compare tariffs: Don't settle for the first offer you receive. Compare SEG tariffs from different energy suppliers to find the best rate for your business.
Choose an MCS-certified installer: Ensure your solar PV system is installed by an accredited installer to meet SEG eligibility requirements. At Fusion Solar, we are fully certified solar panel installers, see our accreditations.
Capital Allowances and Tax Relief
The UK government offers attractive tax incentives to businesses investing in plant and machinery, including solar PV systems. These allowances can significantly reduce your tax burden and improve the financial viability of your solar project.
Full Expensing: This generous tax relief scheme allows businesses to deduct 100% of the cost of qualifying plant and machinery, including solar panels, from their profits in the year of purchase. There is no cap on the amount that can be deducted under Full Expensing, making it particularly beneficial for larger investments. This scheme is currently in effect until March 2026.
Annual Investment Allowance (AIA): The AIA allows businesses to deduct 100% of the cost of qualifying plant and machinery up to a limit of £1 million per year. This allowance is permanently available, providing a reliable tax benefit for businesses investing in solar PV and other equipment.
Key Considerations for Capital Allowances:
Claiming the Relief: You can claim these tax benefits through your company's tax return. No separate grant application is required.
Seek Professional Advice: Consult with a qualified tax advisor to ensure you are maximising the available tax relief for your solar investment.
Regional Solar Grants for UK Businesses
(Please note that grant programs and their details can change. Always check with the relevant organisations for the most up-to-date information before making any decisions.)
West Midlands
Net Zero Grant Programme (NZGP): Provides capital funding to businesses in Birmingham and Solihull for solar PV systems and energy efficiency improvements. (Status: First phase closed; new funding expected after April 2025. Contact Birmingham City Council for the latest updates.)
West of England
Rooftop Solar PV Grant: Offered grants to businesses in Bristol and Bath with large roof spaces suitable for solar panel installations. (Status: Closed as of September 2024. Contact the West of England Growth Hub for information on alternative funding programs.)
Kent
West Kent Green Business Grant: Supported businesses in Sevenoaks District and Tonbridge & Malling Borough with grants for solar PV and energy efficiency upgrades. (Status: First round closed March 2024. Check with the respective local councils for any future funding rounds.)
Norfolk & Suffolk
Business Transition to Net Zero Grant: Provides funding to eligible businesses in Norfolk and Suffolk for larger-scale clean energy projects. (Important Note: Standard solar panel installations may not be eligible for this grant. Contact New Anglia Growth Hub for detailed eligibility criteria and application guidance.)
Scotland
Scottish SME Loan Scheme: Offers Scottish SMEs access to interest-free loans (up to £100,000) and cashback grants (up to £30,000) for energy efficiency and renewable heat projects. (Important Note: Cashback grants are not currently available for solar PV installations. Visit Business Energy Scotland for the latest program details.)
Wales
Future Proofing Fund: This new grant program provides financial support to Welsh SMEs in the retail, hospitality, and leisure sectors. Grants of £5,000-£10,000 are available for investments in renewable energy technologies, including solar PV, and energy efficiency measures. (Contact the Welsh Government for eligibility criteria and application information.)
Development Bank of Wales - Green Business Loan Scheme: Offers Welsh businesses access to green loans with competitive interest rates and flexible terms. This scheme also includes potential grant support for energy audits to help businesses plan their decarbonization strategies.
Northern Ireland
Northern Ireland Sustainable Energy Programme (NISEP): The NISEP provides grants and discounts to businesses and households in Northern Ireland for a range of energy efficiency measures. Contact the NI Business Info portal for current grant opportunities and eligibility requirements.
Make the change from fossil fuels, and relying on the national grid with Fusion Solar
Other Notable Regional Grant Programs
In addition to the programs highlighted above, numerous other local and regional grant schemes are available to UK businesses. Explore these resources to uncover potential funding opportunities in your area:
North Somerset Net Zero Business Grants: (Contact North Somerset Council)
Lancashire "Chamber Low Carbon" Program: (Contact Lancashire County Council)
Peak District & D2N2 Area Grants: (Contact relevant local authorities in Derbyshire and Nottinghamshire)
Greater Manchester "Net Zero Accelerator": (Contact Greater Manchester Combined Authority)
If your business does not qualify for a grant or requires additional funding to support its solar project, Fusion Solar offers tailored financing solutions with zero upfront costs and flexible payment options. These financing models ensure that energy savings often exceed monthly instalments, making solar a cash-flow-positive investment from day one.
1. Commercial Solar Finance by Fusion Solar
Fusion Solar provides businesses with a range of financing options designed to make solar energy both affordable and accessible.
Key Benefits of Solar Finance:
No Upfront Costs – Start your solar journey without any initial investment.
Predictable Energy Costs – Lock in stable, lower energy rates and reduce reliance on fluctuating electricity prices.
Improved Cash Flow – Monthly energy savings often outweigh finance repayments, ensuring immediate financial benefits.
Hassle-Free Installation & Maintenance – If your system fails within the plan term and cannot be repaired, Fusion Solar will replace it at no extra cost.
Finance Options Available:
Payment Plan (Rental or Hire Purchase Agreements)
No upfront costs – spread payments through fixed monthly instalments.
Quick approval for applications up to £150,000.
Suitable for all types of energy-efficient equipment.
Fusion Solar pays the supplier directly, so businesses can focus on energy savings.
Power Purchase Agreement (PPA)
£0 upfront cost – Fusion Solar installs, owns, and maintains the solar system.
Businesses purchase electricity at a fixed, lower rate per kWh, reducing long-term energy expenses.
No maintenance or upgrade costs – the system is fully managed by the PPA provider.
Many UK banks now offer green business loans with preferential interest rates for renewable energy projects. If you prefer traditional financing, consider loan options from:
Lloyds Bank
Barclays
HSBC
NatWest
Co-operative Bank
RBS
Development Bank of Wales
3. Solar Grant Assistance
Fusion Solar also provides dedicated grant assistance for businesses in the Peak District and Derbyshire. Their expert team has successfully helped organisations like Victoria Hall, Hoe Grange Holidays, and Muse Escapes secure funding for solar energy projects.
If you're interested in exploring available grants or need assistance with applications, Fusion Solar can guide you through the process.
The information provided in this guide is based on the latest available data as of February 2025. However, grant programs and regulations can change, so it's crucial to stay updated. Always consult official sources and seek professional advice to ensure you have the most current information.
Take the Next Step Towards Solar Power
Investing in solar power is a strategic decision that can benefit your business both financially and environmentally. With the support of available grants, tax incentives, and financing options, there's never been a better time to embrace clean energy and unlock the power of the sun for your business with Fusion Solar.
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Muse Homes T/A Fusion Solar UK is an Introducer Appointed Representative (Financial Services Register No. 1015379) of Phoenix Financial Consultants Limited (Phoenix). Phoenix is a credit broker, not a lender. Phoenix is authorised and regulated by the Financial Conduct Authority (FRN: 539195), and offers finance from its panel of lenders. All finance subject to status and credit checks.
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