Solar panel grants and funding for charities
Every route a UK charity or community building can use to fund solar in 2026, and how to combine them. Updated for 2026.
For most charities the barrier to solar is not the economics. It is capital, and knowing which pot to apply to. The good news is that the third sector can reach funding no commercial buyer can, and several of these routes stack. Get the combination right and a project that looked unaffordable becomes something a board can comfortably approve.
Start here: 0% VAT (the saving you don't apply for)
Since 1 February 2024 (until 31 March 2027, after which the reduced 5% rate is due to apply), installing solar has been zero-rated for VAT where the building is used for a relevant charitable (non-business) purpose. A qualifying charity pays 0% VAT, which means no 20% VAT is added to the cost before you even look at grants. There is no application and no competition for funds. It simply applies when the conditions are met, so always claim it. The relief has an end date: see VAT on solar panels for charities for the dates and what to confirm.
The charity gives the installer a short VAT declaration confirming the qualifying use. Where a building has mixed charitable and business use (a charity with a trading arm, say, or a hall hired out commercially), the relief is apportioned. One trap to watch: a building used wholly for a business activity, such as a standalone charity shop, may not qualify on its own. The installer confirms your position with your finance team before quoting, and never just assumes it.
Most charities combine two or three routes
A realistic project rarely relies on one source. The 0% VAT relief removes the 20% VAT charge. A grant covers a chunk of the balance. Export income and reserves do the rest. Where capital is tight, a PPA or community share offer removes the upfront cost entirely.
The skill is matching the right combination to your cause, your nation and your building. That is the part this guide is for.
- 0% VAT + a single grant + reserves (the most common pattern)
- 0% VAT + Smart Export Guarantee income (no grant needed)
- A no-upfront PPA or community share offer where reserves are restricted
Grant funding routes for 2026
Few charities use all of these. The skill is matching one or two to your cause, your nation and your building.
| Funding route | Best for | Typical value | Where | Upfront cost |
|---|---|---|---|---|
| 0% VAT (zero-rate) | Every qualifying charity | Avoids 20% VAT | UK | No application |
| National Lottery Community Fund | Community & voluntary orgs | £300-£20,000+ | UK-wide | Grant |
| Great British Energy Community Fund (formerly Community Energy Fund) | Community-owned energy projects | Check the current round | UK | Grant |
| Local Energy Scotland (CARES) | Scottish community groups | Grants + loans | Scotland | Grant / loan |
| Rural community funding (ACRE) | Village & rural halls | Varies by scheme | Rural England | Grant |
| Charitable trusts & foundations | Capital appeals | £1k-£100k+ | UK | Grant |
| Sport funding (Football Foundation, Sport England) | Clubs & pavilions | Project-dependent | UK | Grant |
| Smart Export Guarantee (SEG) | Buildings that export power | 5-15p per kWh | UK | Income |
| Power Purchase Agreement (PPA) | Tight or restricted reserves | Day-one bill savings | UK | £0 upfront |
| Community share offer | Flagship projects | Community-raised | UK | £0 upfront |
Most charities combine two or three of these. The 0% VAT saving is automatic; the rest depend on your cause, nation and building.
The routes in detail
0% VAT for charities (zero-rate on energy-saving materials)
Since 1 February 2024 (until 31 March 2027, after which the reduced 5% rate is due to apply), installation of solar panels is zero-rated for VAT where the building is used for a relevant charitable purpose (non-business use) or as relevant residential accommodation. Removes 20% from the qualifying cost before any grant.
- Typical value
- Avoids the 20% VAT charge
The charity gives the installer a VAT certificate confirming qualifying use. Mixed business and charitable use is apportioned. This is a tax relief rather than a grant, and it applies automatically when the conditions are met, so always claim it.
The National Lottery Community Fund
UK-wide funder for community and voluntary organisations. Smaller awards (e.g. Awards for All / National Lottery Awards) and larger strategic programmes can fund energy-saving capital works including solar where it supports the charity's wider aims.
- Typical value
- £300 to £20,000 (small grants); larger programme funding above this
Frame solar as something that enables your mission, freeing money for services and building community resilience, rather than just an energy project. It is a strong fit for village halls, community centres and youth groups.
Great British Energy Community Fund (formerly the Community Energy Fund)
The Great British Energy Community Fund (2026, GBP 20 million) builds on the former Community Energy Fund, which ran in England from 2023 to 2025. It is aimed at community organisations developing community-owned energy projects, so it is a poor fit for an ordinary roof installation on a hall or club. Check eligibility and current dates on gov.uk/community-energy before spending time on an application.
- Typical value
- Stages and amounts change by round; see gov.uk/community-energy
Aimed at community-led generation projects rather than a single small roof, but valuable where a charity is leading a larger or shared community solar scheme. Apply via your regional Net Zero Hub.
Local Energy Scotland (CARES)
The Community and Renewable Energy Scheme provides advice, development funding and loans to Scottish community organisations developing renewable energy, including solar on community buildings.
- Typical value
- Development grants and low-interest loans (project-dependent)
Scotland-specific. The free advisory support is excellent even before any funding is agreed, so it is worth contacting them early in any Scottish charity project.
Rural community building funding (ACRE network)
Village halls and rural community buildings can access support through the ACRE network of Rural Community Councils, plus periodic capital grant schemes for rural community facilities.
- Typical value
- Varies by scheme and region
Your county Rural Community Council is the best first call for village-hall solar. They know the live local pots and can help with applications and trustee governance.
Charitable trusts & foundations (capital grants)
Independent grant-making trusts such as the Garfield Weston Foundation, the Bernard Sunley Foundation and many regional and community foundations make capital grants to charities for building improvements, which can include solar.
- Typical value
- £1,000 to £100,000+ depending on the trust
Use a foundation directory (or your community foundation) to match funders to your cause and region. Capital appeals that bundle solar with wider building improvements often land best.
Sport-specific funding (Football Foundation, Sport England)
Sports clubs and facilities can access governing-body and sport-development funding, some of which now explicitly supports energy efficiency and renewables to keep facilities affordable.
- Typical value
- Project-dependent; energy components increasingly eligible
For clubhouses and sports pavilions, combine a facilities-improvement bid with the solar element. Football Foundation and county FA routes are the usual starting points for grassroots football.
Smart Export Guarantee (SEG)
Licensed electricity suppliers pay for surplus solar electricity exported to the grid. It is not a grant, but it is a real ongoing income stream that improves payback, especially for buildings with intermittent occupancy.
- Typical value
- Typically 5-15p per kWh exported
Village halls, scout huts and sports clubs export a high share of their generation because the building is often empty during the day, which makes SEG income disproportionately valuable. Choose the best SEG tariff at install.
Power Purchase Agreement (PPA), zero upfront
A funder installs and owns the solar system at no cost to the charity, which then buys the electricity generated at a fixed rate below the grid price. No capital outlay and no maintenance liability.
- Typical value
- £0 upfront; immediate bill savings from day one
Ideal where a charity has good roof space but limited reserves or restricted funds. Returns are lower than owning outright, but the cash-flow benefit starts immediately. Needs a sufficiently long, secure lease/occupancy.
Community share offers & community energy co-ops
A community benefit society raises capital from local members to fund the installation; the host charity benefits from cheaper electricity and the community owns the asset. A long-established route for community solar.
- Typical value
- £0 upfront to the charity; community raises the capital
Best for larger or flagship projects with community appetite to invest. Local community-energy groups and Community Energy England can help structure the offer.
What funders want to see
Grant applications for solar succeed when they are framed around your mission, not the panels. Funders want to know the money saved on electricity will go back into frontline services, that the project is well governed, and that it is technically sound. A strong bid usually includes:
- A clear statement of how the saving advances your charitable aims
- An installer's proposal with system size, generation forecast, cost and payback
- Confirmation of roof suitability and any planning position
- Evidence the trustees have approved the project and weighed the risks
- Your accounts and a sense of the reserves position
The installer provides the technical half of this (the proposal, the modelling, the roof and planning confirmation) in a form designed to drop straight into a funding bid. Your local Council for Voluntary Service or community foundation can help with the rest.
Common pitfalls to avoid
- Assuming you'll get free solar. Consumer "free solar" ads target homeowners. The real free routes for charities are a PPA or a fully grant-funded scheme. Both are real, but neither is automatic.
- Restricted funds. Trustees must be careful using restricted funds for a building project. The installer flags this early so your board can take advice.
- Short leases. Grant funders and PPA providers need confidence the building will be there for the system's life. Check your lease before you start.
- Leaving 0% VAT unclaimed. It is missed more often than you'd think. Always confirm your VAT position before signing anything.
Which funding routes are worth checking for your charity?
Answer six quick questions. You get the routes worth checking for your building, with the source for each. It is a checklist, not a decision: every funder sets its own rules and dates.
Need help finding the right funding route?
Tell us about your building and we reply by email with the funding routes that fit, including your 0% VAT position. Free, no obligation.
- 0% VAT for qualifying charities until 31 March 2027
- Grant routes explained on our funding page
- Typical costs on our cost page, answers on the FAQs
- No-upfront PPA where reserves are tight
Funding questions
Can charities get solar panels for free?
Genuinely "free" solar usually means one of two things. The first is a Power Purchase Agreement (PPA), where a funder pays for and owns the system and you simply buy the electricity it generates at a fixed price below the grid rate. There is no upfront cost, and the savings start from day one. The second is a fully grant-funded installation, where bodies such as the National Lottery Community Fund, the Great British Energy Community Fund (aimed at community-owned energy projects) or a charitable trust cover the capital cost.
Be wary of consumer-style "free solar" adverts aimed at homeowners, because they rarely fit charities. For most charities the realistic position is a heavily discounted system: 0% VAT removes the 20% VAT charge, and grants or a PPA can cover much or all of the rest.
Do charities pay VAT on solar panels?
In most cases, no. Since 1 February 2024 (until 31 March 2027, after which the reduced 5% rate is due to apply) the installation of solar panels is zero-rated for VAT in Great Britain where the building is used for a relevant charitable purpose (non-business use) or as relevant residential accommodation. That means qualifying charity installations attract 0% VAT, so the 20% VAT charge is not added to the price before any grant is even considered.
The charity provides the installer with a simple VAT declaration confirming the qualifying use. Where a building has mixed charitable and business use, the relief is apportioned. An installer should help you confirm eligibility and complete the paperwork correctly.
What grants are available for solar panels for charities?
The main routes are: the National Lottery Community Fund (community and voluntary organisations); the Great British Energy Community Fund (which builds on the former Community Energy Fund) for community-owned energy projects; Local Energy Scotland's CARES scheme in Scotland; rural community building funding via the ACRE network for village halls; and capital grants from charitable trusts and foundations such as the Garfield Weston and Bernard Sunley foundations. Sports clubs can also access Football Foundation and Sport England funding.
These can often be stacked with the automatic 0% VAT saving and Smart Export Guarantee income. The right combination depends on your cause, location and building. Mapping it correctly is the single biggest factor in getting a charity solar project funded.
We're trustees: what do we need to consider before approving a solar project?
Trustees should be satisfied on four points: that the project is in the charity's interests and consistent with its objects; that it is properly funded (and that any restricted funds are used appropriately); that the building and any lease permit the works for the system's full life; and that the risks of roof condition, planning and maintenance have all been assessed.
A good proposal has exactly this in mind: a clear payback case, a note on funding routes including 0% VAT, confirmation of roof suitability, and a plain-English summary your board can minute. Charity Commission guidance on managing charity property and reserves is the relevant backdrop.
Can we fund solar without using our charity's reserves?
Yes. A Power Purchase Agreement (PPA) lets a third party fund, own and maintain the system while you simply buy the cheaper electricity, with no capital and no reserves required. Community share offers, where a community benefit society raises the money locally, are another well-established no-upfront route, particularly for flagship projects.
Grant funding can also cover most or all of the capital. Many charities combine routes, for example a grant for part of the cost alongside reserves or a community share offer for the balance. Ask the installer to model each option so trustees can compare them on a like-for-like basis.
Does our charity shop or sports club qualify for 0% VAT?
It depends on how the building is used. The zero rate applies to buildings used for a relevant charitable purpose, meaning non-business charitable use. A charity shop is generally a business activity, so a shop building may not qualify for the relief on its own, whereas a community sports facility run by a registered charity for community benefit may do. A CASC is not a charity, so its position needs checking with HMRC or an adviser.
This is genuinely case-specific, so confirm the VAT treatment with your finance team or accountant before accepting a quote. Never assume it.