Grants and funding for solar panels for agriculture

Farm solar funding is different from the rest of commercial solar. There is no open capital grant for farm solar panels in England in 2026, and no Welsh, Scottish or Northern Irish scheme currently pays for them either, but there is still a strong stack of tax relief and export income. The trick is knowing which levers apply to your farm and how they fit together. Here is how the main routes work.

The Annual Investment Allowance: the one that applies to almost everyone

The 100% Annual Investment Allowance is the backbone of almost every farm solar business case. Solar PV is special-rate plant and machinery, and the AIA lets a farm business deduct the full cost, up to £1m a year, from its taxable profits in the year of installation. For a limited-company farm at current corporation tax rates that is an effective saving of up to a quarter of the system cost in year one, and sole-trader and partnership farms get comparable relief against income tax. Almost every farm rooftop install sits well within the £1m cap, so the whole system is usually relieved in full in year one under the AIA. Solar does not qualify for full expensing. There is no application and no competitive round: you claim it through your normal tax return, so the main thing is to make sure your accountant treats the install correctly. The full rules are on the government's capital allowances pages.

Smart Export Guarantee: income for what you do not use

The Smart Export Guarantee requires energy suppliers with 150,000 or more customers to offer a tariff for surplus exported from systems up to 5 MW; MCS certification is needed for systems up to 50 kW, while larger systems use Ofgem ROO-FIT accreditation. Business tariffs currently range from roughly 3p to 15p per kWh depending on the supplier and tariff structure, so it pays to shop around once your system is commissioned. SEG matters more for farms than for many other sectors because farm loads are often seasonal. An arable farm with a big autumn grain-drying peak but low demand the rest of the year will export a meaningful share of its summer generation, and that export income is what makes the year-round numbers work. A 24/7 dairy, by contrast, exports little because it consumes nearly everything, so for dairy the SEG is a smaller part of the picture.

The Sustainable Farming Incentive and agrivoltaics

The Sustainable Farming Incentive does not pay for solar panels; SFI reopened as SFI26 in 2026 but funds land-management actions only. Land under or around a ground-mount or agrivoltaic array can sometimes sit alongside separate environmental actions, subject to scheme rules, so check with the Rural Payments Agency before assuming any payment will continue. For a farm considering ground-mount on grassland, the interaction between lease or generation income and any existing agreement on that land is worth checking early, rather than treating solar and your environmental schemes as separate decisions.

The Farming Investment Fund: no open route for solar

The Farming Investment Fund was the umbrella for English capital grants such as FETF and FTF, and it is not an open route for solar. Improving Farm Productivity round 2, which offered 25% towards rooftop solar (£15k to £100k grants), closed to applications at the end of July 2025 with no round 3, and FETF 2026 closed on 12 May 2026 and did not fund solar panels. No farm solar capital grant is open in England in 2026, so build the business case on tax relief and savings, and watch Defra announcements in case a new round opens.

Devolved schemes: the Welsh and Scottish advantage

Farms in Wales, Scotland and Northern Ireland should check current devolved schemes, but at the time of writing none of them pays for solar panels on farms. Scotland's CARES funding is for community groups rather than farm businesses, and the Business Energy Scotland SME loan is closed to solar PV. The UK-wide capital allowances and SEG still apply in every nation, so for most devolved farms these are the levers that shape payback.

How the routes stack, and the pitfalls to avoid

For most farms the working combination is straightforward: claim the full AIA tax relief and take the SEG export income. If you hold an environmental agreement on land where ground-mount or agrivoltaic panels would sit, check the scheme rules with the RPA first. The most common pitfall is sequencing: where any grant does open, it may require you to apply and be approved before any work begins, so signing a contract or starting the install can disqualify you. Always confirm the order of events before committing. The second pitfall is overstating eligibility, particularly assuming solar qualifies for a fund that actually targets other equipment. Ask your installer and accountant to be clear about which routes are realistic for your farm rather than chase ones that are not.

What you will need to provide

Whatever combination applies, the paperwork is broadly the same: recent electricity bills and ideally half-hourly meter data, roof or land details, and your business structure and tax position. Having these ready lets the installer you are put in touch with size and quote the system, and lets your accountant plan the capital allowance claim in step with the technical design rather than after it.