If you’re looking to invest in commercial solar power, government solar incentives could help you to kick-start the process
Going solar can offer your business a huge range of benefits. From gaining a zero-emission source of electricity to fine control of your budget with predictable energy prices, you could make significant cost and carbon savings over the 25-year lifetime of your system.
Despite these advantages, investing upfront capital in new energy solutions can still be difficult – especially amid ongoing economic pressure. This is where funding from outside your business can help.
You could invest via Power Purchase Agreement (Solar PPA), giving you stability with agreed electricity rates over the 15–20-year length of your contract. Or, you could explore options such as government solar incentives, offering support for businesses interested in transforming their energy strategy. Read on to find out more about the funding you could utilise.
Depending on the specifics of your installation, you could benefit from a range of government solar incentives.
If you’re installing new equipment, and you intend to fully own the asset, you could apply for a capital allowance. Capital allowances mean that you can deduct the full cost of your solar plant from your profits before tax, through an annual investment allowance (AIA). With AIA, you could claim up to £1 million for plants and machinery. This can help you to keep your budget stable when investing in large-scale commercial solar power.
Additionally, large-scale solar projects may be able to take advantage of the Smart Export Guarantee. This is a government-backed “competitive market-based system”1, enabling owners of solar installations of up to 5MW in Great Britain to export clean energy back to the grid. By utilising this, you’ll be able to receive payments for any excess electricity that you export. You’ll need to apply to an SEG licensee – a supplier who offers an SEG tariff – to make the most of this opportunity, although the licensee doesn’t need to be your current energy supplier.
Many area-specific schemes are also available to support local businesses in going solar. For example, organisations in both the private sector and Public Sector could benefit from Welsh Government Circular Economy Funding if they’re based in Wales. To be eligible, organisations must be able to prove that their project can reduce CO2 emissions (or one of several circular economy targets). With a typical project value of £200,000 per year for two years, this could make a significant difference to funding your solar project.
Similarly, some businesses in the East Midlands could benefit from up to £250,000 of funding for plant and machinery, equipment, product development or refurbishment investments through the University of Derby Invest to Grow scheme. Whilst not a government scheme itself, this provides significant opportunity for progress on decarbonisation. Eligible businesses must provide 80% of the project costs, and their project must create or safeguard jobs in the region for a minimum of three years. B2C, retail, farming agriculture or professional service businesses aren’t eligible, but many others could benefit from this investment when choosing to go solar.
Other smaller regional schemes may also be relevant for smaller-scale solar installations, such as the West Lothian Low Carbon / Energy Efficiency Grant or the Renfrewshire Council Net Zero Grant (each offering up to £10,000, depending on the project). When considering government solar incentives for your project, it’s important to ensure that you explore all relevant options for your organisation.
To find out more about national, regional and UK-wide government solar incentives, visit the UK Business Climate Hub, which lists funding and support for private sector businesses of all sizes.
Public Sector organisations may be able to apply for sector-specific funding opportunities. For example, the Public Sector Decarbonisation Scheme (PSDS) can provide funding for solar PV installations as part of its “measures that save indirect carbon” category. With some projects such as the Royal Northern College of Music receiving around £6.4m to cover energy efficiency measures including solar, this scheme could help your Public Sector organisation to transform its strategy for the future.
Other Public Sector organisations in Wales may be able to benefit from government solar incentives. The Wales Funding Programme (supported by the Welsh Government) is able to provide up to 100% of project costs, depending on your forecast cost to save per tonne of carbon. One such example is Bridgend County Borough Council, which benefitted from a £1.3m funding package to install solar and other energy efficiency solutions at schools and other Public Sector buildings.
Many other Public Sector decarbonisation schemes could also help you to transition towards Net Zero, such as the Green Public Sector Estate Decarbonisation Scheme in Scotland. We can help you to identify the right scheme for your business, and support you in accessing funding for your solar installation through these programmes.
If you’re not eligible for government solar incentives, you can still invest in solar power without the need for upfront capital investment.
With a Power Purchase Agreement (Solar PPA), you could invest in behind-the-meter solar with zero upfront CAPEX needed. We’ll design, install, own, fund and operate the asset – and all you’ll need to do is pay a fixed p/kWh rate for your electricity over the 15-20-year length of your contract. By investing via this route, you can still go solar even if you’re unable to find a suitable government scheme for your project.
If you choose to partner with us for commercial solar power, we can help you to access government solar incentives.
Our team of solar experts will work with you throughout the development of your solution to identify the best financing opportunities for your business. We can help you to establish which funds you may be eligible for, and help you to apply for relevant subsidies, grants or loans.
With our 20+ years of solar expertise, we can support you in deploying an onsite solution that fits your unique needs. Complete our simple form to start a conversation with our team today.
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