Finance
There are lots of finance options available when it comes to getting solar installed.
Whether it’s capital expenditure, Annual Investment Allowance (AIA) or a Solar Power Purchase Agreement (PPA), we can help you arrange the best finance for your business or farm.
Tax Benefits of Commercial Solar
Investing in solar PV can reduce more than just your electricity costs. UK businesses purchasing a commercial solar installation may also be able to benefit from valuable capital allowances, helping to reduce the effective cost of their investment.
Annual Investment Allowance
Solar PV installations can qualify as plant and machinery for capital allowance purposes. Under the Annual Investment Allowance (AIA), businesses can currently claim up to £1 million of qualifying capital expenditure each year, allowing eligible expenditure to be deducted from taxable profits in the year the investment is made.
For companies paying Corporation Tax at the main rate, this can significantly reduce the effective cost of a solar installation and improve the overall return on investment.
For example, where a business has sufficient taxable profits and available AIA, a qualifying £500,000 solar investment could potentially generate a £500,000 deduction from taxable profits.
Additional Capital Allowances
HMRC classifies expenditure on solar panels as special-rate plant and machinery. Where the Annual Investment Allowance is not available or has already been allocated elsewhere, qualifying companies may be able to claim the 50% first-year allowance on new and unused special-rate assets, with further capital allowances potentially available on the remaining expenditure.
Business Rates Benefits
There can also be additional benefits for businesses installing renewable energy technology. In England and Wales, eligible plant and machinery used for renewable energy generation, including solar PV, is currently excluded from business rates valuation until 1 April 2035, subject to the relevant qualifying conditions.
Making Solar Even More Cost-Effective
Capital allowances can sit alongside the electricity cost savings generated by solar, helping businesses achieve a stronger overall financial return while reducing their exposure to future energy price increases and lowering carbon emissions.
PVGEN can include indicative solar generation, energy savings, payback and return-on-investment calculations as part of your solar proposal.
Tax treatment depends on individual circumstances and may change. Businesses should obtain advice from their accountant or tax adviser before making investment decisions.
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can do for you
Unlock the power of solar. Download our brochure to learn more about our company and about how we can help you reach your sustainability goals and save money on your energy bills.
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Frequently Asked Questions
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See what PVGEN UK
can do for you
Unlock the power of solar. Talk to one of our solar consultants about how we can help you reach your sustainability goals and save money on your energy bills.