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.
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 PPA | Grant-funded (PSDS, Salix) | |
|---|---|---|
| Who can use it | Almost any business with a suitable roof and credit | PSDS: public-sector bodies in England and reserved public services only |
| Is it available now? | Yes, at any time | No PSDS window since Phase 4 closed to new applications in November 2024 |
| Ownership | The provider owns the system for the term | You own the system |
| Procurement | Provider-led | Formal 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 page | Value | Source | Verified |
|---|---|---|---|
| PSDS status and eligibility | Phase 4 closed to new applications in November 2024; public-sector bodies only; managed by Salix Finance | GOV.UK — Public Sector Decarbonisation Scheme | 28 Sep 2026 |
| Capital allowances for solar | Special-rate: no full expensing; AIA 100% up to £1m, then 50% FYA | GOV.UK — full expensing and 50% FYAs; GOV.UK — AIA | 28 Sep 2026 |
| IETF | Closed July 2025, no successor fund | GOV.UK — Industrial Energy Transformation Fund | 27 Sep 2026 |
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.
Open calculatorIf 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
PPA vs Grant-funded Solar — tell us about your site and we'll return an indicative p/kWh tariff for it. Reply by email within one working day.