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Solar Grants: how business solar tax rebates work

Solar Panels bought via PPA displayed at an angle to reflect light

Whilst straightforward solar grants are thinner on the ground than they once were, solar tax rebates are still a useful incentive to invest in a solar PV system for your business.

Investment levels have historically been a barrier to entry for many businesses when it comes to Solar PV.  Grants and Feed in Tariffs (FiTs) used to be the primary incentives for businesses to take the leap.

However, 2023 saw the highest uptake of business solar PV in 12 years.  This was spurred on by  the cost of solar technology dropping and the rise of Power Purchase Agreements (PPAs).

An additional motivation for installing panels is the tax rebates that are available.  This short blog covers how your business can take advantage.

50% First Year Allowance (FYA)

As well as the significant reduction in electricity spend and increase in supply security, businesses can access renewable energy capital allowances by claiming back the cost of installing a system.

Solar PV panels are classed as “Special Rate Assets” which qualify for the “50% First Year Allowance” scheme.  This scheme was introduced post-pandemic and was extended until 31st March 2026.

The 50% FYA allows you to:

  • Deduct half the value of a new solar panel installation from your profit in its first year of installation, pre-tax
  • Reduce your corporation tax bill by this amount
  • Write down the remaining 50% of the installation cost at 6% in subsequent years

So that’s not quite a solar grant, but is still more money staying in your business’ cashflow at the end of the financial year.

All businesses who pay corporation tax are eligible for this scheme and it is payable on fixed, permanent systems which are attached to your property and generate electricity for your business.

How to claim

You can claim these rebates via your annual Company Tax Return.  You must claim it within the tax year the system was procured.  This is classified as either the date you signed the contract, where payment is due within four months; or the date payment is due if it is more than four months away from the date you signed the contract.

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Procure Smart offers businesses a free feasibility study, which will determine the cost and associated benefits that come with installing a renewable energy solution.  That includes what rebates and incentives you can access.

Complete a contact form below and we’ll be in touch to discuss renewable technologies for your business.

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