Grant / Funding Route
IETF Phase 3 grant funding for office solar
Industrial Energy Transformation Fund (IETF): Up to 30% capex (max £6m). Eligible for industrial sites in england.
At a glance
- Funding type
- Industrial Energy Transformation Fund (IETF)
- Value
- Up to 30% capex (max £6m)
- Eligibility
- Industrial sites in England
The Industrial Energy Transformation Fund is administered by the UK Department for Energy Security and Net Zero (DESNZ). Phase 3, running 2024-2028, provides £185m of funding for industrial decarbonisation projects in England.
Grant funding covers up to 30% of project capex with a maximum award of £6m per project. Funding is competitive and weighted toward projects delivering the highest absolute carbon reduction per pound of grant.
Office-based businesses can qualify where the office is part of an industrial site — typically R&D HQs, manufacturing administrative buildings, or factory office blocks adjoining production facilities. Pure-office sites without industrial process load are usually not eligible.
The IETF application process requires:
Application windows open periodically — typically twice per year. The next anticipated window in 2026 opens in Q3.
For office solar combined with site-wide industrial decarbonisation (heat recovery, heat pumps, process electrification), IETF provides one of the most material grant routes available. We work with specialist grant consultants on larger IETF applications and have supported successful applications totalling £18m+ across our client base.
IETF eligibility: which office buildings qualify?
IETF is primarily an industrial decarbonisation fund — its scope is broader than the fund name suggests, but it is not a universal grant for all commercial buildings. The key eligibility criteria are:
- Industrial classification: The site must be classified as industrial under the UK Standard Industrial Classification (SIC) or must have a demonstrable industrial energy demand. Administrative offices for manufacturers, R&D facilities, data processing centres, and large logistics HQs typically qualify. Pure-office professional services do not.
- UK location: Projects must be in England. Separate programmes apply in Scotland (Scottish Industrial Energy Transformation Fund) and Wales (Wales Industrial Energy Efficiency Fund).
- Minimum project value: Phase 3 requires a minimum project capex of £100k. Maximum award £6m. Most IETF office solar applications sit in the £200k-£2m project value range.
- Energy intensity: Higher-energy-intensity sites (manufacturing, data centres, distribution) score better. Pure administrative offices with low absolute energy consumption are harder to justify as IETF-eligible.
IETF application: what's required
The IETF application is substantially more complex than Salix PSDS. DESNZ expects:
- Energy Audit Report: A qualified energy auditor's report establishing the site's current energy baseline, identifying the measures proposed, and quantifying the projected CO₂ savings. The audit must follow DECC/DESNZ audit methodology guidelines.
- Financial Model: Detailed project cost breakdown (OJEU-standard contractor quotes for awards over £250k), financial case for grant (demonstrating additionality), and sensitivity analysis.
- Carbon Reduction Plan: The site's overall carbon trajectory with and without the proposed intervention. IETF awards are partly scored on the degree to which the project forms part of a credible longer-term decarbonisation roadmap.
- Technical Specification: Detailed equipment specification and design basis, including PVSyst yield report for solar components.
- State Aid / Subsidy Control Compliance: Post-Brexit, UK Subsidy Control Act (2022) applies. Applications must include a subsidy assessment confirming compliance with the UK Common Approach for subsidy control.
Preparation time for a complete IETF application is typically 8-16 weeks for a standalone solar application, longer where the solar element is part of a broader decarbonisation programme involving multiple technologies.
IETF and Salix PSDS: can you stack grants?
Public sector bodies that are also IETF-eligible (NHS research facilities, university technical departments, government laboratories) can in principle pursue both IETF and PSDS funding on different components of a decarbonisation programme. However, IETF and PSDS cannot fund the same expenditure item — no double-dipping on a single piece of equipment. Co-funding on a project must be clearly delineated in both applications.
For private industrial operators, the most common combination is IETF (30% of capex) plus AIA/Full Expensing (25% year-one tax relief), effectively funding 55% of capex through grant and tax in year one. The SEG export tariff and reduced energy bills then drive the remaining payback over 5-8 years.
Scottish and Welsh equivalents
If your office or industrial facility is in Scotland or Wales, equivalent programmes cover similar ground:
- Scotland: Scottish Industrial Energy Transformation Fund (SIETF), administered by Zero Waste Scotland. Similar structure to IETF; Phase 2 running 2023-2026. Up to 30% of eligible capex.
- Wales: Business Wales Decarbonisation Grant (via Welsh Government), less formal than IETF but provides up to 50% capital grant for energy decarbonisation on SME industrial sites.
We have experience with SIETF applications and can support Welsh enquiries through specialist grant consultants. If your site is in Scotland or Wales, note this when requesting your feasibility study and we will map the appropriate regional programme.