Grants and funding for solar panels for industrial units

There is no single headline grant that pays for solar on an industrial unit, and you should be wary of anyone who tells you otherwise. What actually makes the numbers work is a combination of tax relief, finance structures, and, for some sites, capital allowance enhancements tied to where the building sits. Used together, these can sharply reduce the effective cost of a system. Below we walk through each route, how they fit with a typical industrial install, and the traps worth avoiding. The cards further down the page set out the official sources for each.

Capital allowances do most of the heavy lifting

For the great majority of industrial operators, the most valuable support is not a grant at all but capital allowances. Solar PV qualifies as plant and machinery, so a limited company can claim the 100% Annual Investment Allowance on qualifying spend up to £1 million, which covers most single-unit installs in full. In practice that means the cost of the system is offset against taxable profits in the year of installation, giving an effective saving of around a quarter of the install cost at current corporation tax rates. Above the £1 million threshold, a 50% First Year Allowance has applied to qualifying expenditure, subject to the legislation in force when you install. The point is simple: most industrial solar installs are fully or largely expensed in year one, which transforms the payback compared with a straight cash purchase.

Freeport and Investment Zone allowances

If your industrial unit sits inside one of the designated UK Freeports or Investment Zones, the picture gets even better. Buildings within these zones can qualify for Enhanced Capital Allowances, giving 100% first-year tax relief on qualifying new plant and machinery. Current Freeport areas include Freeport East at Felixstowe and Harwich, Liverpool City Region, Plymouth and South Devon, Teesside, Solent, Thames, Humber, and East Midlands. Several of the locations we serve fall within or near these zones, so it is always worth checking. We assess Freeport and Investment Zone eligibility for every applicable site, because the relief can materially shorten effective payback. You can review the current designations through the UK Freeport programme pages.

The Industrial Energy Transformation Fund

The Industrial Energy Transformation Fund, run by DESNZ, supports energy efficiency and decarbonisation projects at eligible industrial sites, with intervention rates of 30% to 50% and awards ranging from £100,000 into the tens of millions. Eligibility is tied to your business's SIC code. Cold-chain operations and certain food-warehouse businesses can qualify, but most pure logistics and 3PL activity does not. If your operation sits in an eligible category, the prize is significant and worth pursuing. The fund opens in competitive windows rather than running continuously, so timing matters, and a strong application needs energy audit data and a clear decarbonisation case prepared in advance.

The Smart Export Guarantee

The Smart Export Guarantee, or SEG, pays you for surplus electricity exported to the grid. Every MCS-certified install up to 5 MW is eligible, and tariffs in 2026 sit roughly between 4p and 15p per kWh depending on the supplier. For a round-the-clock industrial operation, such as a cold-chain warehouse or 24-hour fulfilment centre, export is usually small because you consume nearly everything you generate, so SEG is a minor contributor. For a unit that runs a standard daytime shift and has surplus at weekends, SEG income is more meaningful and worth optimising by choosing the right export tariff. It is a useful top-up rather than a primary driver, and you should size the system around your own consumption first.

Green leases for tenant-installed solar

Many industrial operators lease rather than own their unit, which raises the obvious question of how you install solar on a building you do not own. The answer is the green lease, now standard practice across UK industrial property. The lease typically requires landlord consent, and most institutional landlords have a standard green-lease addendum ready to go. The Building Better Partnership Green Lease Toolkit is the industry reference, and we provide the lease addendum template aligned with it. It is not a grant, but it is the thing that unlocks tenant ability to install at all, and it deals cleanly with the awkward question of what happens to the system at the end of the lease.

How these stack, and how to time them

The routes combine. A typical owner-occupier install uses the Annual Investment Allowance to expense the system in year one, takes SEG income on any export, and, if the building is in a Freeport, layers Enhanced Capital Allowances on top. A tenant install uses a green lease to gain consent, then either capital allowances on an owned system or a PPA where the third-party owner carries the asset. An eligible cold-chain operator might add an IETF application to the mix. The sequencing matters: capital allowances are claimed in the tax year of installation, IETF must be applied for before you commit spend, and the green lease consent needs to be in hand before work starts. For institutional landlords, allow four to eight weeks for consent; owner-occupied buildings can move much faster.

Common pitfalls

The mistakes we see most often are avoidable. Installing before securing IETF funding disqualifies the spend, because the fund will not retrofit support to a completed project. Using a non-MCS installer rules out SEG eligibility entirely. Sizing the system to fill the roof rather than to match your consumption leaves you exporting cheaply instead of saving at the full retail price. And starting a tenant install without written landlord consent can breach the lease and create dilapidations problems down the line. We map the right combination for your specific situation, ownership status, building location, and SIC code, before any commitment, and we will tell you honestly which routes you qualify for and which you do not.