Discover Green Energy Grants in the UK! Explore loans and schemes to help you save money and switch to sustainable energy.

Green Energy Grants UK | Loans and Schemes to Consider

Volatile rises in energy bills, along with an increase in consumer demand for sustainability, are inspiring many businesses to lean toward greener energy solutions. However, while changing business energy suppliers to something more renewable can make a big difference, energy efficiency renovations and projects can often be expensive and time-consuming. Green energy grants for small businesses and medium-sized enterprises can make a huge difference.

 

A green energy grant is some sort of financial assistance or incentive, devised to encourage businesses to continue leaning towards greener initiatives. Being aware of these grants, what they can offer and their conditions can be a great help for smaller businesses looking to enhance their sustainability. This guide will offer insights into different private and government incentives for green energy projects, so you can feel more confident if it comes time to seek out some assistance. 

 

Green energy loans from banks

Major banks will generally offer specialised green energy loans and financing options, generally offering preferential rates and terms when compared to traditional business loans. These loans can be used to finance assets like solar panels, heat pumps or electric business vehicles to improve energy efficiency, and are generally offered to SMEs rather than larger businesses.

The Recovery Loan Scheme 

This scheme was introduced by the government during the COVID-19 pandemic to help businesses access loans for various industrial investments – with energy-efficiency projects considered a viable use of accessed funds. This isn’t strictly a grant, as the loans will have to be repaid in full, but participating lenders are cooperating to increase access for smaller enterprises.

 

Industrial Energy Transformation Fund 

This is one of the more direct government incentives for green energy transitioning, with £500 million in funding set aside over 8 years of rollouts. The IETF is structured as a competition, with winners generally being businesses with fairly high energy usage levels. The funding they receive is then used to help them deploy and even develop energy-efficient, decarbonising technologies and equipment.

 

High profile winners include: 

 

• Airbus Operations Ltd.
• Plasmor Ltd.
• KP Snacks Ltd.
• Nestle UK

 

While these may mostly seem like larger businesses, there have been a lot of winners since the project started, at varying levels of size and stature. 

 

Capital allowances and tax incentives

Taxes can often be the ultimate source of strife for business owners, with returns seeming to come around at the worst times. Thankfully, businesses can lean into capital allowances and tax incentives to make savings against their taxable profits, depending on the nature of the investments. 

 

Plant and machinery costs

There are capital allowances in place, such as the Annual Investment Allowance that allow businesses to write off costs for qualifying plant and machinery investments. This often applies to more sustainable or energy-efficient equipment. 

 

Structures and buildings allowances

This capital allowance is devised to support businesses that have recently enacted construction or renovation projects of non-residential structures. It’s important to note that the structure can’t be sold or demolished after construction or capital gains tax will likely be inflated. 

 

Business tax rate support for green technology investments

If plant machinery or equipment is used in the construction or operation of renewable energy generation or storage, such as solar panels, wind power and EV charging points, the equipment is considered exempt from business tax rates. This scheme is running until 2035 and is described in a government factsheet. 

 

Finding the right green energy grants

There are several ways that you can approach finding financial support for your green energy projects, with more appearing regularly. Make sure to keep an eye out for government and banking developments to avoiding missing new and exciting opportunities.