Grant / Funding Route
Annual Investment Allowance for office solar
Annual Investment Allowance (AIA): 100% first-year deduction up to £1m. Eligible for all uk businesses (limited companies, partnerships, sole traders).
At a glance
- Funding type
- Annual Investment Allowance (AIA)
- Value
- 100% first-year deduction up to £1m
- Eligibility
- All UK businesses (limited companies, partnerships, sole traders)
The Annual Investment Allowance is the most material capital allowance for UK office solar projects in 2026. Permanently set at £1m per business per year from April 2023, AIA provides a 100% first-year tax deduction on qualifying plant and machinery — including solar PV systems.
For a limited company at the current 25% corporation tax rate, every £1 of AIA-eligible capex returns £0.25 of tax relief in year one. On a typical £288,000 office solar install, that's £72,000 of tax saving in the first year — reducing the effective capex from £288k to £216k.
AIA stacks with most other reliefs. You can claim AIA on solar PV and still apply for Salix PSDS, SEG export tariffs, Workplace Charging Scheme grants, or any other applicable funding route. The only limitation is the £1m annual cap across all qualifying capex — for businesses making multiple major capex purchases in the same year, this can be the binding constraint.
For partnerships and LLP structures, AIA is particularly valuable because partners typically have higher marginal income tax rates (40% / 45%) than the 25% company rate — making AIA relief on partnership solar installations effectively worth £400k-£450k of tax saving on a £1m install.
Claiming AIA on solar PV requires the system to be operational and connected before the company year end. We schedule install dates to fit AIA claim windows where the customer's year end falls within the install programme.