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For a company on the 25% main rate, a £200,000 installation effectively costs £150,000.", "image": "https://alliantenergy.co.uk/assets/commercial-solar-DydTBMj7.jpg", "author": { "@type": "Person", "name": "Alliant Energy Team", "url": "https://alliantenergy.co.uk/about" }, "reviewedBy": { "@type": "Person", "name": "MCS Registered Engineer", "jobTitle": "MCS Registered Engineer" }, "publisher": { "@type": "Organization", "name": "Alliant Energy", "url": "https://alliantenergy.co.uk", "logo": { "@type": "ImageObject", "url": "https://alliantenergy.co.uk/logo.png" } }, "datePublished": "2026-01-15", "dateModified": "2026-05-19" }, { "@context": "https://schema.org", "@type": "FAQPage", "mainEntity": [ { "@type": "Question", "name": "Does Full Expensing apply to battery storage as well as panels?", "acceptedAnswer": { "@type": "Answer", "text": "Yes. Battery storage installed as part of a commercial solar system qualifies as plant and machinery. Inverters and associated electrical equipment also qualify." } }, { "@type": "Question", "name": "We're a sole trader — can we claim Full Expensing?", "acceptedAnswer": { "@type": "Answer", "text": "No, but you can use the Annual Investment Allowance (AIA), which provides equivalent 100% relief on up to £1m of expenditure per year. For most sole-trader projects, AIA covers the full cost." } }, { "@type": "Question", "name": "Does Full Expensing affect VAT?", "acceptedAnswer": { "@type": "Answer", "text": "No — Full Expensing is a corporation tax relief. Commercial solar attracts 2 (domestic is 0%). VAT-registered businesses reclaim as input VAT in the normal way." } }, { "@type": "Question", "name": "What if we take finance to fund the install?", "acceptedAnswer": { "@type": "Answer", "text": "Under hire purchase or finance lease arrangements where the business has economic ownership, Full Expensing may still apply. Operating leases (where the funder retains ownership) do not. Your accountant should confirm the structure." } } ] } ] --- [![Alliant Energy — Renewable Energy Solutions](/__l5e/assets-v1/3bd22195-cc6e-43e6-b5ff-5a808ce292d3/alliantenergyltd-2.svg)](/) [Home](/)[About](/about-us) [Services](/services) [Guides](/guides)[Case Studies](/case-study)[![Levelise](/__l5e/assets-v1/59fd362e-361a-47d7-ad1f-65e9beeb5289/levelise-logo.webp)](/guides/levelise-hub-explained) [01282 501589](tel:01282501589)[Get a Quote →](/quote) Spoke guide · Commercial # Full Expensing and Solar: How UK Businesses Can Claim 100% Tax Relief Full Expensing allows UK companies to deduct the full cost of qualifying plant and machinery — including commercial solar and battery storage — from their profits in year one. For a company on the 25% main rate, a £200,000 installation effectively costs £150,000. By **Alliant Energy Team**· reviewed by MCS Registered Engineer Last updated 19 May 2026 [Get a Commercial Quote](/quote) [Download Brochure](/brochure) On this page - [What is Full Expensing?](#what) - [Does solar qualify?](#qualify) - [Full Expensing vs AIA](#vs-aia) - [Combined impact](#combined) - [Timing & claiming](#timing) - [FAQ](#faq) Ready to act? Free quote in one working day. [Get a Quote →](/quote) Introduced in April 2023 and made permanent in the 2023 Autumn Statement, Full Expensing is one of the most significant tax incentives for commercial solar in the UK's history — yet many businesses aren't using it. Here's exactly how it works. ## What is Full Expensing? Full Expensing is a 100% first-year capital allowance for qualifying plant and machinery. Instead of spreading the cost over many years, a business deducts the entire cost in year one, reducing taxable profit by the full purchase price. Installation cost Full Expensing relief (25% corp tax) Effective cost £50,000 £12,500 £37,500 £100,000 £25,000 £75,000 £200,000 £50,000 £150,000 £500,000 £125,000 £375,000 ## Does commercial solar qualify? Yes. Solar panels and battery storage installed on commercial premises qualify as plant and machinery under Full Expensing, provided: - The installing company is liable to UK corporation tax (not sole traders / partnerships — see below) - The asset is new and unused (not second-hand) - The asset is used wholly or partly for the company's trade - The company owns the asset — a PPA (where the funder owns the panels) does not qualify Sole traders and partnerships Full Expensing applies to limited companies paying corporation tax. Sole traders and partnerships use the Annual Investment Allowance (AIA), which provides equivalent 100% relief on up to £1m of qualifying expenditure per year. ## Full Expensing vs. Annual Investment Allowance The AIA already provides 100% relief on qualifying assets up to £1 million. Full Expensing removes the cap — a company spending £2 million on solar can still claim 100% relief in year one. For most SME projects under £1 million, AIA covers the same ground; for larger projects, Full Expensing is more valuable. ## The combined impact: tax relief plus energy savings Year 1 Year 3 Year 10 Gross installation cost £200,000 — — Full Expensing relief (25%) −£50,000 — — Effective cost after tax £150,000 — — Annual energy saving ~£20,000 ~£20,000 ~£20,000 Cumulative savings £20,000 £60,000 £200,000 Net position −£130,000 −£90,000 £0 Shepherd Distribution 38.7% ROI and 2.9-year payback without Full Expensing. With Full Expensing applied to a company on 25% corp tax, the after-tax payback shortens to under 2 years. ### Model the tax impact for your business Free commercial assessment with full financial projection. [Get a Commercial Quote](/quote) [Speak to an Engineer](/request-callback) ## Timing & how to claim Full Expensing has been made permanent — no artificial deadline. Relief is claimed in the company's accounting period in which the expenditure is incurred. For a company nearing year-end, installing before year-end may allow earlier relief. Work with your accountant to time investment for maximum efficiency. It's claimed on the corporation tax return (CT600) as a first-year allowance. You need a purchase invoice, evidence the asset qualifies, and confirmation the asset is new and owned by the company. ## Frequently asked questions ### Does Full Expensing apply to battery storage as well as panels? Yes. Battery storage installed as part of a commercial solar system qualifies as plant and machinery. Inverters and associated electrical equipment also qualify. ### We're a sole trader — can we claim Full Expensing? No, but you can use the Annual Investment Allowance (AIA), which provides equivalent 100% relief on up to £1m of expenditure per year. For most sole-trader projects, AIA covers the full cost. ### Does Full Expensing affect VAT? No — Full Expensing is a corporation tax relief. Commercial solar attracts 2 (domestic is 0%). VAT-registered businesses reclaim as input VAT in the normal way. ### What if we take finance to fund the install? Under hire purchase or finance lease arrangements where the business has economic ownership, Full Expensing may still apply. Operating leases (where the funder retains ownership) do not. Your accountant should confirm the structure. Three ways to get started ## Ready to find out what solar saves you? Get a tailored quote in one working day. No obligation. No hard sell. Speak to a renewable energy engineer — not a salesperson — at a time that suits you. [Get a Quote → ](/quote) [Request a Callback →](/request-callback) [Download Brochure →](/brochure) Accreditations ## Certified, registered, and insured. Every time. MCS certification isn't a box-ticking exercise — it qualifies your system for Smart Export Guarantee payments and government grants. Our installers are also NICEIC-approved and TrustMark-registered, and every install is fully insured. ![Citation ISO Certification: ISO 9001 quality management, ISO 14001 environmental management and ISO 45001 occupational health and safety](/__l5e/assets-v1/180183cd-e6fd-4b0a-984c-83e6a41390d7/accreditations-iso.jpg) ![Alliant Energy — Renewable Energy Solutions](/assets/logo-IFrgP5Dc.png) Renewable energy & energy-saving specialists. MCS-registered solar PV, battery storage, heat pumps and EV charging across the UK. #### Quick Links - [Home](/) - [About Us](/about-us) - [Services](/services) - [Case Studies](/case-study) - [Areas We Cover](/solar-panel-quotes-north-west) - [Contact](/contact) - [Privacy Policy](/privacy) - [Terms & Conditions](/terms) #### Services - [Solar for Homes](/services/solar) - [Commercial Solar](/services/commercial-solar) - [Battery Storage](/services/battery-storage) - [Air Source Heat Pumps](/services/heat-pumps) - [EV Charging](/services/ev-charging) - [Energy Saving Advice](/services/energy-saving-advice) #### Contact - [01282 501589](tel:01282501589) - [info@alliantenergy.co.uk](mailto:info@alliantenergy.co.uk) - Unit 214 Northlight Industries, Pendle Road, Brierfield, Nelson BB9 5FL [Get a Quote](/quote)[Brochure](/brochure) Alliant Energy Ltd is an Introducer Appointed Representative (Financial Services Register No. 1020779) of Phoenix Financial Consultants Limited (Phoenix). Phoenix is a credit broker, not a lender. Phoenix is authorised and regulated by the Financial Conduct Authority (FRN: 539195), and offers finance from its panel of lenders. All finance subject to status and credit checks. © 2026 Alliant Energy Ltd. All rights reserved. [Privacy Policy](/privacy)[Terms & Conditions](/terms) MCS Registered · TrustMark · NICEIC [Chat with AI](/chat) [Call back](/request-callback) [Get a Quote](/quote) [Get a Brochure](/brochure) [Get a Quote](/quote) [Chat with AI](/chat)