The UK government does not offer a direct grant for residential solar panel installation in 2026. The Feed-in Tariff closed in 2019 and has not been replaced with an equivalent scheme. However, several indirect incentives significantly reduce the cost — and for certain households, fully funded installations remain available.
For businesses, the picture is even better: capital allowances effectively provide 25% off commercial solar costs. This guide covers every scheme available.
For Homeowners
0% VAT on Solar Panels
The most valuable current incentive. Solar panel and battery installations on residential properties are zero-rated for VAT until April 2027. On a £7,000 installation, this saves £1,400. This applies to panels, batteries, inverters, and installation labour.
Smart Export Guarantee (SEG)
All energy suppliers with 150,000+ customers must offer a tariff paying you for surplus electricity exported to the grid. Rates range from 1p/kWh to 30p/kWh depending on supplier and tariff type. Octopus Energy consistently offers the highest rates.
ECO4 Scheme
The Energy Company Obligation scheme can fund solar panel installation for households on qualifying benefits or low incomes. ECO4 runs until 31 March 2026 — if you qualify, apply immediately as the scheme closes in days. Eligible households can receive fully funded solar panels, insulation, and heating upgrades at no cost. Check your eligibility at eco4application.co.uk.
Boiler Upgrade Scheme (BUS)
While primarily for heat pumps, the BUS provides £7,500 towards air source heat pump installation. If you are replacing a gas or oil boiler and adding solar at the same time, the combined system cost becomes much more attractive. See heatpumpinstallationgrants.co.uk for full details.
Home Energy Scotland
Scottish residents can access interest-free loans of up to £7,500 for solar panel installation through Home Energy Scotland. Cashback grants of up to £1,750 may also be available for qualifying households.
Nest Scheme Wales
Welsh households on qualifying benefits can receive fully funded energy efficiency improvements including solar panels through the Nest scheme. Visit welshheatpumpgrants.co.uk for Welsh-specific grants.
For Businesses
Capital Allowances (100% First-Year Relief)
The most valuable business incentive. Solar PV qualifies for 100% Annual Investment Allowance, allowing businesses to deduct the full cost from taxable profits in the year of purchase. For a company paying 25% corporation tax, a £100,000 commercial solar installation effectively costs £75,000 after tax relief.
Business-Specific Solar Grants
Various local and regional grants exist for business solar installations. The availability changes frequently — visit solarpanelgrantsforbusinesses.co.uk for the latest information on grants available in your area.
Business Rates Exemption
Rooftop solar installations under 50 kWp are exempt from business rates in England. Above 50 kWp, the system is assessed separately but the rates payable are typically a small fraction of the energy savings.
Sector-Specific Funding
Schools can access the Salix Finance scheme providing interest-free loans for energy efficiency measures including solar. Social housing and private rented properties may qualify for fully funded installations through ECO4 or local authority schemes. Rural and off-grid properties often qualify for enhanced funding due to higher energy costs.
How to Maximise Your Incentives
- Install before April 2027 to benefit from 0% VAT
- Choose an MCS-certified installer (required for SEG eligibility)
- Compare SEG tariffs — the difference between worst and best can be £400+/year
- If on benefits or low income, check ECO4 eligibility before paying for installation
- For businesses, consult your accountant about capital allowance timing