Investing in renewable energy isn’t just good for the planet – it’s good business sense, too. For companies considering Solar PV installations, the Annual Investment Allowance (AIA) offers a substantial financial incentive, helping you cut costs while enhancing your environmental credentials.
At Arc Renewables, we’re passionate about helping businesses transition to cleaner energy while maximising every opportunity for savings and return on investment.
Tip: Solar PV simply refers to solar panels that generate electricity, not to be confused with solar thermal systems that heat water.
What Is the Annual Investment Allowance (AIA)?
The AIA allows UK businesses to deduct the full value of qualifying capital expenditure – including Solar PV systems – from their taxable profits. Currently, you can claim up to £1 million per year, dramatically reducing the true cost of your solar investment.
Solar PV systems are classified as “special rate assets,” which means you can claim 100% of the system’s cost against your taxable profits in the first year. This dramatically shortens the expected payback period and boosts the overall return on investment.
How Does It Work?
Let’s break it down with a simple example:
| Item | Value |
|---|---|
| Original cost of Solar PV system | £60,000 |
| 100% Capital Allowance | £60,000 |
| Tax Saving (at 25% corporation tax) | £15,000 |
| Effective cost after tax relief | £45,000 |
By claiming the AIA, your business could see immediate financial benefits, making Solar PV even more cost-effective.
How to Qualify for the AIA Scheme
Most businesses, regardless of size, can benefit from the AIA.
Here’s what you’ll need to ensure eligibility:
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Purchase qualifying assets such as solar PV systems (fixed plant and machinery).
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Ensure installation is complete and the system is operational within the same tax year you intend to claim.
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Keep detailed invoices and proof of expenditure to support your tax claim.
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Work with a qualified energy consultancy, like Arc Renewables, to ensure your installation aligns with AIA criteria.
It’s worth noting that while AIA covers Solar PV equipment, items like leased equipment or certain energy-saving measures may fall under different relief schemes.
Why Invest in Solar PV?
✔️ Cost Savings: Slash your energy bills by generating your own clean electricity. Solar PV also offers protection against rising wholesale energy prices.
✔️ Sustainability: Reduce your carbon footprint and meet growing stakeholder expectations for environmental responsibility.
✔️ Energy Independence: With your own solar generation, you reduce reliance on the grid and gain more control over your long-term energy strategy.
✔️ Enhanced Reputation: Today’s consumers and partners are drawn to organisations demonstrating a genuine commitment to sustainability.
✔️ Support Net Zero Targets: Investing in solar moves your business closer to Net Zero compliance, a growing requirement across sectors.
✔️ Asset Value: Renewable installations can enhance the overall valuation of your commercial properties.
How Arc Renewables Supports You
At Arc Renewables, we do more than just install solar panels – we work with you to create a full energy strategy tailored to your business goals. From initial consultancy through to project delivery and long-term O&M servicing, we ensure you achieve maximum value at every stage.
By partnering with us, you gain:
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Expert guidance on capital allowances and tax incentives like AIA.
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Tailored Renewable Energy Consultancy to align with your operational and financial goals.
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Access to Asset Management and Project Delivery services, keeping your systems optimised and future-proofed.
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Support for broader Net Zero ambitions, helping you make sustainability a competitive advantage.
Ready to Take the Next Step?
There’s never been a better time to invest in renewable energy solutions. Solar PV, combined with the power of the Annual Investment Allowance, offers a unique opportunity to reduce costs, enhance sustainability, and future-proof your business.
Contact Arc Renewables today to explore how we can help you unlock the benefits of Solar PV and support your journey towards a greener, more profitable future.