The rising cost of energy and growing pressure to reduce carbon emissions have made solar power an increasingly attractive option for UK business owners. In 2025, several UK government solar panel grants are helping businesses reduce installation costs, lower utility bills, and become more environmentally responsible. But here’s the catch — these grants won’t last forever.
If you’re a business owner in the UK, now is the time to explore solar panel grants and government-backed incentives. Whether you run a small startup or manage large facilities, transitioning to solar energy can unlock significant financial and operational benefits. This article breaks down all the current schemes, how to apply, and what you need to do to get started before funding dries up.
Also Check: Get Paid to Go Solar? Here’s What the US Government Is Offering in Solar Panel Incentives
Why the UK Is Pushing Solar for Businesses in 2025
The UK government is under growing pressure to meet net-zero emissions targets by 2050. To accelerate this transition, they’ve introduced financial incentives for businesses to adopt clean technologies — and solar power is at the forefront.
In 2024, commercial energy bills soared due to supply chain disruptions and inflation, leaving many SMEs struggling. The solution? Solar. By tapping into free, renewable sunlight, businesses can offset electricity bills while contributing to national decarbonisation goals.
Let’s look at the best grants available right now and how your business can benefit.
Top Solar Panel Grants for UK Businesses in 2025
1. Smart Export Guarantee (SEG)
The Smart Export Guarantee rewards businesses for sending unused solar-generated electricity back to the grid. Licensed energy suppliers pay you per kilowatt-hour (kWh) exported.
- Average Tariff: Around 5-15p per kWh
- Eligibility: Businesses with solar systems under 5MW
- Bonus: Earn ongoing income even after paying off the panels
2. Annual Investment Allowance (AIA)
If you’re worried about upfront costs, AIA can be a game-changer.
- What it does: Allows businesses to deduct 100% of the solar panel investment (up to £1 million) from their taxable profits in the year of purchase.
- Why it matters: It provides immediate tax relief, making the investment significantly more affordable.
3. UK Shared Prosperity Fund (UKSPF)
Administered by local councils, the UKSPF funds energy-saving projects, including solar panel installations.
- Grants up to: Varies by region, typically up to £15,000
- Eligibility: SMEs investing in sustainability
- Note: Applications go through your local authority’s economic development team
4. Regional Business Solar Grants
Different parts of the UK are rolling out region-specific support:
West Kent Green Business Grant
- Grant covers up to 40% of solar installation costs
- Amount: £5,000–£8,000
- Who can apply: Businesses in Sevenoaks District
West of England Rooftop Solar Scheme
- Fund Size: £500,000 in 2024; likely to expand in 2025
- Who benefits: SMEs looking to install rooftop panels
- Status: Ongoing — first come, first served
5. Public Sector Decarbonisation Scheme (PSDS)
Public institutions (schools, councils, universities) can apply for major solar and energy-saving project funding.
- Example: The Royal Northern College of Music received £6.4 million
- Best for: NHS trusts, universities, local authorities
6. Power Purchase Agreements (PPAs)
Don’t want to pay upfront? PPAs let you install solar at no initial cost.
- A third party installs and maintains the system
- You pay a fixed rate for the electricity (usually cheaper than the grid)
- No maintenance responsibilities
Also Check: Europe’s Solar Power Surge: Adding 70 GW Capacity in 2025
Extra Perks for Solar Panel Installation in 2025
0% VAT on Solar Installations
Until March 2027, solar panel installations on commercial properties are exempt from VAT. That’s a 20% discount upfront.
Energy Supplier Initiatives
Companies like E.ON, EDF, and Octopus Energy have partnered with government schemes to offer solar installation grants or loans to eligible businesses.
- E.ON: Offers business solar packages with flexible financing
- Octopus Energy: Provides solar and battery bundles for SMEs
Step-by-Step Guide to Apply for Solar Panel Grants
Step 1 – Evaluate Your Energy Usage
- Collect your electricity bills from the past 12 months
- Use online solar calculators to estimate system size
Step 2 – Check Eligibility
- Visit gov.uk or your local council site
- Review grant-specific rules (location, sector, energy use)
Step 3 – Get Quotes from Certified Installers
- Ensure they are MCS-certified
- Compare pricing, warranties, and ROI
Step 4 – Apply for Grants
- Prepare documents: business registration, energy data, quote
- Submit online forms or contact council directly
Step 5 – Install and Save
- Once approved, installation can be completed in 1–3 weeks
- Begin generating energy and enjoy reduced bills
(FAQs
Q1: Can small businesses apply for these grants?
Yes, most schemes are tailored for SMEs. Even sole traders can qualify under local council initiatives or SEG.
Q2: How long does it take to get grant approval?
Typically 2–8 weeks, depending on the scheme. Regional grants may be quicker than national ones.
Q3: Are solar panels effective in the UK’s cloudy climate?
Absolutely. Solar PV panels generate electricity from daylight, not just direct sunlight. Even in cloudy regions like Scotland, solar is viable.
Q4: Can I combine multiple incentives?
Yes! Many businesses use AIA for tax relief, apply for local grants, and earn SEG payments post-installation.
Also Check: Mandatory Solar Panels in New Homes: UK’s Step Towards Energy Efficiency
