With energy bills still high and Net Zero targets looming, solar power is more relevant than ever. But while demand grows, so does confusion around costs. The good news? The UK government continues to offer strong financial support to make solar more accessible – whether you’re powering a home or a business.
In this guide, we break down the current solar panel grants and incentives available in 2026. Whether you’re a homeowner looking to save or a business aiming to cut carbon and costs, knowing what support is available could save you thousands.
What UK Solar Grants and Incentives Are Available in 2026?
Getting familiar with the 2026 UK solar funding landscape is key if you want to install solar without overspending. Over 1.6 million UK homes already benefit from solar panels – many thanks to these initiatives.
ECO4 Scheme (Residential)
ECO4 (Energy Company Obligation) is still the main grant for domestic solar in 2026. It’s designed to help low-income households with poor energy efficiency (EPC rating D or lower). If your household income is under £31,000 – or you’re on Universal Credit or Pension Credit – you may qualify.
As of early 2025, over 38,000 installations had been funded through ECO4. The scheme covers solar PV as part of a wider retrofit, and the savings can be significant – potentially covering full system costs of £7,000 to £20,000.
LA Flex (Residential)
LA Flex expands ECO4 eligibility by letting local councils support households who don’t receive benefits but still face fuel poverty. This local-level flexibility helps thousands more access solar grants that would otherwise be out of reach.
Smart Export Guarantee (Residential + Commercial)
The Smart Export Guarantee (SEG) pays you for the surplus electricity your solar system exports to the grid. It applies to both homes and businesses. Export rates vary (from 4p to 15p per kWh depending on your supplier), but they offer a steady income on top of your energy bill savings.
0% VAT on Solar (Residential)
The current 0% VAT rate on solar panel installations runs until March 2027. That’s a 20% saving on total costs – around £1,200 to £1,600 on a standard system.
Commercial Solar: Business Incentives That Deliver
Businesses installing solar panels in 2026 can benefit from a mix of tax relief and ongoing savings that improve ROI quickly.
SEG Payments for Businesses
Commercial properties are eligible for SEG payments, letting you earn from unused electricity. For larger systems, this can create a valuable secondary income stream – especially when paired with battery storage to manage peak loads.
Capital Allowances: Full Expensing + AIA
The Full Expensing scheme, available until March 2026, lets UK companies write off 100% of solar system costs against their taxable profits in the first year. There’s no upper limit. Alternatively, the Annual Investment Allowance (AIA) provides tax relief up to £1 million annually for qualifying assets, including solar.
These incentives make solar pay for itself within 7 to 10 years, on average – sometimes faster, depending on usage and system size.
Net Zero & Brand Value
Commercial solar isn’t just about cutting energy bills – it’s about future-proofing your brand. Consumers and investors now expect businesses to show real climate action. Installing solar supports your Net Zero commitments and enhances your environmental credentials. Get a commercial solar quote.
How Much Does Solar Really Cost in 2026?
The average UK homeowner pays between £5,000 and £8,000 for a 4kW solar system. Commercial systems vary more based on site and size.
Here’s how current incentives lower the cost:
- ECO4: Can cover entire system costs (£7,000–£20,000)
- 0% VAT: Saves £1,200–£1,600 instantly
- SEG payments: Earn £80–£170 per year from exports
- Energy savings: Cut bills by £400–£600 annually
Most homeowners see a full return on investment in 9 to 14 years, and satisfaction is high – 89% report a positive experience after installing solar. Compare solar quotes now.
Why 2026 Is the Time to Go Solar
There’s never been more financial support for going solar. Between tax breaks, SEG earnings, VAT relief and government-backed grants, solar is more affordable now than ever before.
But these incentives won’t last forever:
- ECO4 ends in March 2026
- Full Expensing ends in March 2026
- 0% VAT ends in March 2027
Delaying means missing out on thousands in savings and another year of rising energy bills. If you’re planning to invest in solar, now’s the time to act. Find out if you qualify.
Get Free Quotes from Trusted UK Installers
Looking for trusted solar panel installers near you? Our quote tool connects you with fully vetted, MCS-accredited professionals who understand how to maximise grants and savings.
- Free, no-obligation quotes
- See if you qualify for ECO4 or LA Flex
- Compare prices, warranties, and projected savings
It takes just minutes to get started. Get your solar quotes now.
