Maximise UK Business Savings with a Solar Rebate

Everything you need to know about a Solar Rebate

Solar panels offer UK businesses many benefits: greater control over electricity supply, a reduced carbon footprint, and significantly lower electricity costs. However, the initial investment can be substantial, with small to medium-sized enterprises (SMEs) typically spending £50,000 to £100,000 to install commercial solar panels.

This is where the solar rebate becomes crucial. The UK government offers several incentives, including solar rebates, to help British businesses invest in renewable energy. These incentives provide substantial financial support, making it easier for companies to reduce the cost of installing solar photovoltaic (PV) panels on their commercial properties.

How the UK Solar Rebate Works

The UK Government encourages businesses to adopt renewable energy by offering various incentives, including the solar rebate and capital allowances. These measures not only lower your electricity costs but also reduce your tax liability by letting you claim back a portion of the cost of installing solar panel systems.

50% First Year Allowance and Solar Rebates

As part of the Government’s economic recovery efforts, the “130% Super-Deduction and 50% First Year Allowance” schemes launched from 1st April 2021 to 31st March 2023. While only the 50% First Year Allowance directly applies to solar panels, it provides significant benefits for businesses. Solar panels qualify as “Special Rate Assets,” allowing your company to deduct 50% of the value of new solar panel installations from your profits in the first year, effectively reducing your Corporation Tax bill.

You can then write down the remaining 50% of the installation cost at a 6% rate in subsequent years. Previously, solar panels only qualified for the 6% special rate writing down allowance. With this solar rebate incentive, you can achieve a quicker return on your investment.

The 2023 Spring Budget extended this allowance for three more years, until 31st March 2026, giving businesses more time to benefit from these solar rebates.

Additional Solar Rebate Incentives

In April 2022, the government reduced the VAT rate to 0% for certain energy-saving products, including solar panels and their installation. This reduced VAT rate remains in place for five years, making it an ideal time to take advantage of this additional solar rebate and lower your overall installation costs.

Can Your Business Claim a Solar Rebate?

If your business pays Corporation Tax, whether you run a farm, factory, or another commercial enterprise, you can take advantage of the solar rebate and related tax incentives. To qualify, your solar panel system must be fixed to your property and generate electricity for your business operations. Portable or temporary solar panel systems do not qualify for these tax benefits.

In some cases, you might need planning permission before installing solar panels, especially if your building is listed. Checking with your local council ensures you can fully benefit from the solar rebate.

The UK Government’s Commitment to Solar Rebates

The UK Government aims to power 20 million homes with solar energy by 2035, requiring a fivefold increase in solar power generation. To support this goal, the government introduced generous capital allowances and solar rebate programs to stimulate investment in solar energy.

The Chancellor of the Exchequer extended these incentives for three additional years in the 2023 Spring Budget, giving British businesses more time to install commercial solar panels and benefit from these solar rebates.

How to Claim Your Solar Rebate and Tax Relief

You can claim your solar rebate and tax relief through your annual Company Tax Return. Ensure you submit the claim for the accounting period in which you purchased the solar equipment. According to HMRC guidelines, the purchase date is either:

• The date you signed the contract, if payment is due within four months; or
• The date the payment is due, if it’s more than four months after you signed the contract.

Explore GB NRG’s Commercial Solar Panels

Solar panels typically last 25 years or more, so securing a strong return on investment (ROI) is essential. At GB NRG, we specialise in installing solar power systems across various industries, including agriculture, manufacturing, and commercial sectors. Contact our expert team today for advice on maximising your savings with the solar rebate and selecting the best commercial solar panels for your business.