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Government grants for solar panels

Find out more about government grants for solar panels

In the UK, promoting the use of renewable energy sources has been high on the government’s agenda for many years.

This is reinforced by the EU’s Renewable Energy Directive, which set a target for all member countries to achieve a 20% renewables target before the year 2020. Also, the UK government has a climate change plan that aims to reduce greenhouse gas emissions to almost zero by 2050.

With this is mind, the government have put a number of solar panel schemes in place over the last decade that catered to the needs of domestic solar panels for homeowners, as well as business solar panels, which were installed in small to medium-sized businesses, based in office premises.

However, it’s important to note that, over recent years, a number of policies have been scrapped and incentives have been reduced. This is in response to a reduction in the cost of solar panel prices. For example, from 1 April 2019, the Feed-in Tariff (FiT) scheme was closed to new applications.

You may be wondering if it’s still possible to get a grant for solar panels, and alternative options too, including other green business energy choices. And what are the potential costs like?
So what options are still available for small business owners looking to use solar panels?

We’ll provide you with the information you need to know, including the upcoming Smart Export Guarantee (SEG) and other alternatives to solar panels.

In this article, we’ll cover:

Are there still government grants for solar panels in 2019?

There used to be the FiT (Feed-in Tariff) scheme, although this closed to new applications in March 2019 and so this is no longer an option for people looking for solar panel funding.

The solar Feed-in Tariff was designed to reward homeowners who install solar panels on their property, with the government paying for every kWh of energy the panels generated. It offered a form of solar panel grants in the UK through its quarterly payments for electricity generated by renewable energy installations.

While this scheme is no longer open to new applications, householders and small businesses may be eligible for the Smart Export Guarantee (SEG) instead.

The SEG puts the onus on suppliers to pay people who generate energy that can be exported back to the grid…

The Smart Export Guarantee (SEG)

The new offering is called the Smart Export Guarantee (SEG) and essentially it is a way of paying for energy that is exported to the national grid. SEG comes from the The Smart Export Guarantee Order legislation.

The SEG payments are for new, small-scale generators, such as homes or small businesses. If your business receives any other grants or loans, these won’t affect your eligibility for SEG (except if you’re already part of the FiT scheme).

To be eligible for SEG, you must have a smart meter, as the exports must be metered. The renewable energy systems technology must have been installed with Microgeneration Certification Scheme (MCS) equipment. Examples of systems include PV solar panels, wind turbines and hydroelectric power – you can read more about alternatives to solar panels below.

It came into effect in April 2019, once FiT closed to new applications. SEG isn’t a government scheme but instead a way of suppliers paying people for the electricity that they generate. By 1 January 2020, SEG will be in effect with all suppliers – there is currently no end date for SEG.

The price suppliers pay for energy exported back to the grid must be above zero, although it’s up to the suppliers to set the rates. Suppliers can offer payment at flexible or fixed rates per kilowatt hour (kWh), as a tariff that’s either set or depends on wholesale/market rates.

Payments will vary depending on the time of day, as well as between suppliers. Note that if the amount is negative, generators (so households or small businesses) that still export power to the grid won’t be charged to do so.

Some energy providers are already offering rates based on the SEG for homeowners (such as Bulb, E.on and Octopus) – watch this space to find out rates for small businesses…

Solar panels for small businesses: The pros and cons

If you’re undecided about whether using solar panels would suit your startup, here we round up some of the main pros and cons.

Pros Cons
  • Eco-friendly – using solar panels is a sustainable choice that can help strengthen your brand and appeal to certain target audiences e.g. ethical consumers, as well as show your commitment to protecting the planet
  • Cost-saving – as you’ll be generating your own power, this can help to reduce the amount your business spends on energy (such as gas or electricity), plus they often require minimal maintenance
  • Varied uses – many businesses are likely to use solar power to generate electricity and heat but the technology can also be used for water distillation and integrated into the buildings themselves e.g. as solar windows or tiles
  • Commitment – installing solar panels onto your building is a commitment to that location as it can be difficult and expensive to take them with you should you wish to move offices
  • Upfront charges – the initial costs to get set up with solar panels can be considerable. A basic solar panel system could cost in the region of £5,000-£9,000, although bigger systems with higher power capacity are likely to cost in the region of £10,000-£15,000, with prices increasing the more powerful the system

What alternatives to solar panels are there?

While there are many benefits to using solar panels, there are other options to consider when deciding to use alternative energy sources. Here, we highlight some of the other ways of generating energy.

Wind turbines

Generating electricity by using a wind turbine is possible. While often disregarded in a domestic setting due to the visual and noise pollution they can cause, if your small business is on an industrial estate or other purely commercial premises, this could be a possibility.

Wind energy is another renewable energy source, which offers more stability and suitability than solar energy, depending on your business’ location e.g. if you’re located in a place with more wind than sun. It can also help you reduce costs spent on energy, and is ideal if you’re looking for an energy source with minimal waste.

The cost of a wind turbine can vary greatly, and depends on the amount of kilowatt it can power – naturally, the greater the power, the higher the price.

You could expect to pay anywhere between £2,000 to £30,000 for a turbine, with building-mounted devices at the lower end of the scale and pole-mounted at the higher end, and depending on their power levels. For example, a 6kW system could be in the region of £20,000-£30,000.

Other forms of solar

When you think of solar energy, panels are most likely to come to mind. However, if you want to use solar power in your small business, you could consider other forms, such as shingles and ovens, as alternatives to panels.
If you don’t want to, or can’t, affix solar panels to your roof or building, shingles and ovens offer a more flexible alternative form of solar power. A solar oven could be an ideal source of heating food or boiling water in case of a power outage or to make your staff kitchen more eco-friendly, for example.

Solar shingles, or tiles, replace a traditional roof with a mixture of conventional tiles and solar tiles to generate solar power. Although often more expensive than solar panels, if you’re concerned about how your building looks and want solar power, tiles could be more suitable.

Basic solar ovens are available for around £100, although some may cost more or less than this. A solar oven that could replace a traditional domestic oven costs around £500.

Solar shingles/tiles could cost in the region of £5,000-£16,000 for a small, low power system – the amount of power needed and the roof size covered are two factors which determine the price.

Next steps

From reading this article, you’ve learned more about government grants for solar panels and what the impact could be for your small business.

We’ve covered the SEG scheme, along with other alternatives to FiT, as well as the pros and cons of solar panels for small businesses. Plus, we’ve offered information on other options instead of solar panels.

Next, read our commercial solar panels article. Or, for more business energy information, visit our dedicated business electricity and business gas pages.

Alternatively, to compare quotes for business energy, simply fill in the form at the top of the page.

Government grants for solar panels: The FAQs

Whether you’re looking to save money, save the environment or secure future energy generation for your business, solar panels can be a great option. In this section, we profile some key questions you may have about government grants for solar panels.

1. Which types of businesses can use solar panels?

Solar panels can be used across a whole host of sectors, including:

  • Catering, hospitality, and leisure – where energy comes at a huge cost and businesses often have large, unused roof spaces
  • Construction and engineering – businesses within this sector are under increasing pressure to meet minimum renewable energy requirements
  • Farming and agriculture – a great source of extra income and a boost for green credentials
  • Shops and retail – cut energy bills and help to bring down overheads
  • Government and public sector
  • Schools, colleges, and universities
  • Hospitals and healthcare
  • Offices
  • Warehouses and manufacturing

2. What are the potential benefits for your business?

The use of solar panels can provide a huge range of benefits for businesses, including:

  • Significant reduction in energy bills, saving you money and reducing your regular outgoings
  • Maintenance free systems
  • Add value to your commercial building
  • Protect your business against any potential energy shortages in the future
  • Protect your business from rising energy costs
  • Reduce your carbon footprint
  • Tax advantages
  • New marketing and PR opportunities

3. Free solar panels UK: What do you need to know?

When searching online about solar panels, you’re likely to come across the term ‘free solar panels’. This is likely to refer to solar panel schemes (like FiT, which doesn’t accept new applications anymore) that offered financial incentives for homeowners and businesses to use solar panels.



Scarlett Cook attends and reports on many industry events for Startups.co.uk, particularly those relating to communication, equality and diversity in entrepreneurship.

Since joining the team in 2018, she has developed our telephone systems and business mobiles topics as well as ‘how to’ guides, with her work having been referenced by brands such as Hiscox. Previously, she has written for audiences across the UK, Australia and New Zealand.