Comparison

PPA vs Grant-funded Solar

Solar PPA vs grant-funded solar: which routes exclude each other, which stack, and whether any grant window is actually open in 2026.

Last reviewed 28 September 2026 6 min read By Compare

Quick answer: Solar PPA or Grant-funded (PSDS, Salix)?

Solar PPA vs Grant-funded (PSDS, Salix): For most private businesses there is no capital grant for solar to compare in 2026: the Public Sector Decarbonisation Scheme has had no open window since November 2024 and is for public bodies only, and the Industrial Energy Transformation Fund closed in July 2025. The real comparison is a PPA against buying outright with capital allowances.

Side-by-side comparison

Solar PPAGrant-funded (PSDS, Salix)
Who can use itAlmost any business with a suitable roof and creditPSDS: public-sector bodies in England and reserved public services only
Is it available now?Yes, at any timeNo PSDS window since Phase 4 closed to new applications in November 2024
OwnershipThe provider owns the system for the termYou own the system
ProcurementProvider-ledFormal public procurement rules apply
Combines with a PPA?—Ownership grants rarely combine with a PPA
The private-sector alternative—Buy outright and claim the Annual Investment Allowance, 100% up to £1m, or the 50% first-year allowance above it

Our verdict

For most private businesses there is no capital grant for solar to compare in 2026: the Public Sector Decarbonisation Scheme has had no open window since November 2024 and is for public bodies only, and the Industrial Energy Transformation Fund closed in July 2025. The real comparison is a PPA against buying outright with capital allowances.

First, is there a grant to compare?

The grant most buyers ask about is the Public Sector Decarbonisation Scheme. It is managed by Salix Finance, it is open only to public-sector bodies in England and areas of reserved public services, and Phase 4 closed to new applications in November 2024. No application window has opened since. The Industrial Energy Transformation Fund, once the route for energy-intensive industry, closed in July 2025 with no successor fund. For a private business the honest answer is that there is usually no capital grant for commercial solar to compare against a PPA.

What private businesses can use instead

The support that does exist for businesses buying solar outright runs through the tax system. Solar panels are special-rate plant, so they cannot use full expensing, but they qualify for the Annual Investment Allowance, which gives 100% relief in year one up to £1 million a year, and above that companies can claim the 50% first-year allowance. That makes the real choice for most businesses a PPA against buying with cash and claiming the allowance.

What actually stacks

  • Grants that fund ownership, such as PSDS, have assumed you own the asset, so they rarely combine with a PPA.
  • Capital allowances need ownership too, so they belong to the provider under a PPA, not to you.
  • A public body can split an estate: grant-funded ownership on one site, if a window opens, and a PPA on another.

Choosing your route

Public-sector organisations that are ready to own should check that a grant window is actually open before planning around it. Private businesses should compare a PPA with an outright purchase, and anyone who needs solar this year without capital is usually better served by a PPA.

Figure on this pageValueSourceVerified
PSDS status and eligibilityPhase 4 closed to new applications in November 2024; public-sector bodies only; managed by Salix FinanceGOV.UK — Public Sector Decarbonisation Scheme28 Sep 2026
Capital allowances for solarSpecial-rate: no full expensing; AIA 100% up to £1m, then 50% FYAGOV.UK — full expensing and 50% FYAs; GOV.UK — AIA28 Sep 2026
IETFClosed July 2025, no successor fundGOV.UK — Industrial Energy Transformation Fund27 Sep 2026
Donovan Fawcett · Director, SEO Dons Ltd Twelve years in UK commercial solar SEO and PPA advisory. Editorial policy & independence.
FAQs

Comparison FAQs

Is there a government grant for business solar panels in 2026?

Not for most private businesses. The Public Sector Decarbonisation Scheme is for public-sector bodies and has had no open window since November 2024, and the Industrial Energy Transformation Fund closed in July 2025. Businesses buying solar outright can claim the Annual Investment Allowance instead.

Can I combine a grant with a PPA?

Rarely. Grants such as PSDS have funded ownership of the asset, while under a PPA the provider owns the system, so the two usually exclude each other on the same installation.

Is PSDS open in 2026?

No. Phase 4 closed to new applications in November 2024 and no window has opened since. Check the GOV.UK scheme page before planning around any future round.

What tax relief is there for business solar panels?

Solar panels are special-rate plant. They cannot use full expensing, but they qualify for the Annual Investment Allowance, 100% in year one up to £1 million, and companies can claim the 50% first-year allowance above that.

Want to model your specific site?

Our calculator runs both scenarios with your actual kWh, tariff and site assumptions.

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If the grant route turns out to be closed for your sector, how a corporate PPA is structured covers the bilateral off-take route that is available now, without a funding window to wait for.

The narrower question of can a PPA and a grant combine — rather than which one wins outright — is worth reading before ruling either route out.

Check what your roof could earn under a PPA

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