Green funding is one of the most active areas of UK business support. Councils, national government, and Innovate UK run programmes that reward businesses for cutting carbon, using energy more efficiently, and developing clean technology. If your company plans to install heat pumps, buy energy-efficient equipment, or develop a green product, public money may cover part of the cost.
Yes, UK businesses can get green grants in 2026. SMEs can claim energy-efficiency grants for equipment upgrades, apply to Innovate UK competitions for clean-tech R&D, and use R&D tax relief for green innovation work. Rounds open and close through the year, so check gov.uk, Innovate UK, and your local authority for the current guidance before applying.
This guide covers the main green funding routes for UK businesses in 2026: net-zero grants, energy-efficiency schemes, Innovate UK clean-tech competitions, local support, and green R&D tax relief, plus how to apply and what assessors look for. This article is general information only, not financial advice: verify every deadline, amount, and eligibility rule against the official guidance before you act.
What Counts as a Green Business Grant?
A green business grant is non-repayable funding awarded to a business for an environmental outcome. The funder pays part of the cost of a project, and you do not pay the money back. The environmental outcome is what makes it “green”: reducing carbon emissions, cutting energy use, developing clean technology, or reducing waste.
Green funding is a family of schemes with different purposes. Some cover capital costs, such as installing solar panels or efficient machinery. Others fund innovation, such as developing a battery technology. A few are tax-based rather than grants, such as R&D tax relief and capital allowances, which reduce your tax bill rather than paying you cash upfront. This guide labels each route clearly: a grant is non-repayable, a loan must be repaid, and tax relief reduces your tax bill.
If your funding need is not green, our companion guide to small business grants in the UK for 2026 covers general grant mechanics and non-green programmes in detail.
National Net-Zero Grants for SMEs
Most national green grants for SMEs fall into three groups: grants for equipment and efficiency upgrades, grants for clean-tech innovation, and finance for later-stage development. These programmes reflect the position as of 2026 and change frequently: always check the current round on gov.uk or the relevant scheme website before applying.
Capital grants for energy-saving equipment
Many SMEs can get grants toward the upfront cost of energy-efficient equipment. These grants are usually match-funded: the scheme pays a share of the project cost, often around 50%, and the business pays the rest. Typical projects include LED lighting with controls, insulation, efficient compressors and refrigeration, and solar PV installations.
These schemes are often run through regional delivery partners rather than one national portal, so availability varies by area. Made Smarter, for example, has run energy-efficiency grants for manufacturers in several regions, including an East Midlands round of £15,000 to £50,000 with a 50% private match. Regional rounds have limited budgets, so search for your local Growth Hub and regional Made Smarter programme to see what is open.
Clean-tech innovation funding
Clean-tech startups and innovative SMEs can apply to national innovation competitions. These programmes fund research and development rather than equipment purchases, targeting technologies that help the UK reach net zero: clean heat and power, energy storage, low-carbon manufacturing, and sustainable materials. The largest source is Innovate UK, covered in detail below.
Later-stage finance for green businesses
Innovate UK Innovation Loans offer loans of £100,000 to £5 million to UK-registered SMEs for highly innovative, close-to-market R&D projects, and net zero is one of the key themes. These are loans, not grants: you repay them, and you must show a credible repayment plan.
Energy-Efficiency Schemes Worth Knowing
Energy-efficiency schemes are usually the fastest route to green funding because they cover specific, well-defined purchases. The main national schemes in 2026 are:
Boiler Upgrade Scheme
The Boiler Upgrade Scheme (BUS) provides grants of up to £7,500 per installation for air-source or ground-source heat pumps. As of 2026, the scheme has been extended to 2028 and is open to small businesses in England and Wales.
From April 2026, EPC requirements were relaxed, so properties no longer need to meet insulation recommendations before applying. The grant is deducted directly from the invoice by the installer at the point of sale. Applications are made through a registered installer.
Workplace Charging Scheme and EV Infrastructure Grant
The Workplace Charging Scheme (WCS) is a voucher-based programme that covers up to 75% of the purchase and installation costs of EV charge points at business premises. From 1 April 2026, the cap per socket rises to £500, and businesses can claim for up to 40 sockets across all sites. The scheme has been extended until at least March 2027.
For larger installations, the EV Infrastructure Grant provides £500 per parking bay for the wider electrical infrastructure. The infrastructure must cover at least five bays, with at least one active charger installed.
Industrial Energy Transformation Fund
The Industrial Energy Transformation Fund (IETF) supports high-energy-use businesses with matching funds of up to £30 million for feasibility studies, efficiency measures, and decarbonisation deployment. Check the current phase and eligibility on gov.uk.
Business rates relief on green equipment
Businesses can get a business rates exemption on solar panels, heat pumps, and other renewable equipment on their premises. This is not a grant, but it lowers the ongoing cost. For wider tax treatment of equipment, see our guide to capital allowances explained, including the Annual Investment Allowance.
Innovate UK Clean-Tech Funding Competitions
Innovate UK, part of UK Research and Innovation (UKRI), is the main national source of grant funding for clean-tech innovation. Competition rounds open and close through the year, and deadlines are strict. As of 2026, the following programmes are relevant for green businesses.
Innovate UK Smart Grants
Smart is Innovate UK’s responsive grant programme for SMEs and their partners developing disruptive innovations with strong commercial potential. Applications can come from any area of technology, and net zero is explicitly in scope. Innovate UK invests up to £25 million in this programme.
To be eligible, your project must include at least one SME as the lead or a collaborative grant-claiming partner, carry out all project work in the UK, and intend to exploit the results from or within the UK. Check the Innovation Funding Service for the current round and closing date.
Investor Partnerships: Clean Energy and Climate Technologies
This Innovate UK competition pairs grant funding with private investment. The round focuses on technologies that deliver clean energy for the UK and accelerate the net-zero transition: solutions and enabling technologies that make a significant contribution to cutting climate emissions across heat, power, mobility, manufacturing, materials, agriculture, and food production.
You must be a UK-registered SME when the award is contracted, and complete an aligned investment led by an investor partner through new shares or convertible debt. A clear route to market and scalability are central to the assessment.
Battery Innovation Programme
Innovate UK’s Battery Innovation Programme supports research that moves battery technology toward commercial use in the UK. As of late 2026, a £5 million investor-partnership competition is open for UK SMEs working on battery materials, components, or manufacturing methods. Applications opened on 5 October 2026 and close at 11am on 25 November 2026. Each applicant must be invited by an approved investor partner, and the agreed private investment must be secured before an awarded project can begin.
Feasibility studies can cost between £50,000 and £300,000 and run for six to twelve months. Industrial research projects range from £100,000 to £1 million over six to 24 months. Experimental development covers projects between £250,000 and £2 million lasting twelve to 24 months. Verify these figures against the current competition brief before applying.
Sustainable Smart Factories
The Made Smarter Innovation programme, delivered by UKRI, has run competitions focused on sustainable smart factories, including a round offering a share of up to £20 million for collaborative projects that cut manufacturing carbon emissions through digital innovation. Projects can range from £1 million to £8 million and run for up to two years. Check the Innovation Funding Service for the current status.
Ofgem Strategic Innovation Fund
The Ofgem Strategic Innovation Fund targets net zero at the lowest cost to energy consumers, and it is delivered by Innovate UK in partnership with Ofgem. As of autumn 2026, a Discovery-phase competition is open: organisations can apply for a share of up to £30 million for collaborative projects that meet the Innovation Challenges. Each project must request no more than £200,000 excluding VAT and provide a minimum of 10% of total project costs as a compulsory contribution from private funds.
This competition opened on 21 September 2026 and closes at 11am on 21 October 2026. Discovery is the first of four phases (Discovery, Alpha, Beta, Deployment). Out-of-scope applications are not assessed and cannot be transferred, so read the challenge scope carefully.
How to track Innovate UK competitions
All Innovate UK competitions are published on the Innovation Funding Service at apply-for-innovation-funding.service.gov.uk. Create an account and set up alerts for keywords such as “net zero” and “clean energy”. Always verify deadlines against the current guidance.
| Route | Type | Best for | As of 2026 |
|---|---|---|---|
| Innovate UK Smart Grants | Grant | Disruptive clean-tech R&D by SMEs | Up to £25m invested per programme; UK-based work required |
| Investor Partnerships: Clean Energy | Grant plus equity | Clean-energy scale-ups with investor backing | Aligned private investment required |
| Battery Innovation Programme | Grant plus equity | Battery and storage R&D | £5m round; closes 25 Nov 2026 |
| Sustainable Smart Factories | Grant (collaborative) | Manufacturing decarbonisation | Up to £20m; £1m-£8m per project |
| Ofgem Strategic Innovation Fund | Grant (collaborative) | Energy-system innovation | £30m share; closes 21 Oct 2026 |
| Innovation Loans | Loan | Later-stage clean-tech R&D | £100k-£5m; net zero a key theme |
| Boiler Upgrade Scheme | Grant | Heat pumps on business premises | Up to £7,500; extended to 2028 |
Local and Regional Green Business Support
Some of the best-value green grants for ordinary SMEs come from local and regional programmes, not national competitions. These schemes are smaller, less competitive, and more practical: they fund insulation, lighting, heating upgrades, and small-scale renewables rather than breakthrough research.
Council green enterprise grants
Many councils run capital grant schemes for local businesses to cut their carbon footprint. Mid Devon’s Green Enterprise Grants 2026-28, for example, offer £500 to £5,000 covering up to 50% of eligible project costs for measures such as low-carbon heating and insulation. Your own council may run something similar, often funded through the UK Shared Prosperity Fund. Search your local authority’s website for “business grants” and “net zero”.
Growth Hubs and devolved nations
Every English region has a Growth Hub that signposts local business support, including green grants and energy audits. In Scotland, Wales, and Northern Ireland, the devolved agencies run their own schemes; check Business Wales, Scottish Enterprise or Highlands and Islands Enterprise, and Invest Northern Ireland for current offers.
Universities and the Catapult network
Universities and the Catapult network can be a practical route into green funding and technical help. The Catapults, including the Energy Systems Catapult, work with businesses on energy innovation. University incubators sometimes bundle small grants with mentoring.
Why local funding matters for clean-tech startups
Even if your main ambition is a national Innovate UK competition, local support is worth pursuing first. A small local grant can fund the energy assessment or feasibility work that makes a later application credible.
R&D Tax Relief for Green Innovation
Not all green support is a grant. R&D tax relief lets companies recover part of the cost of solving genuine scientific or technological problems, and green innovation often qualifies. If you are developing a new battery chemistry, a low-carbon process, or software that optimises energy use, the work may meet HMRC’s definition of R&D.
For accounting periods beginning on or after 1 April 2024, most companies claim through a single merged R&D scheme worth 20% of qualifying spend. Loss-making, R&D-intensive small businesses can instead claim Enhanced R&D Intensive Support (ERIS), worth up to 27%. Failed projects still qualify.
R&D relief can be combined with green grant funding, but grants can affect how much relief you can claim, and the rules on subsidised expenditure matter. Speak to a qualified accountant first. Our full guide explains the merged scheme, qualifying costs, and how to claim: R&D tax credits for small businesses.
How to Apply: What Assessors Look For
Green funding is competitive, and assessors apply consistent criteria across most schemes. The following steps apply whether you are applying for a local capital grant or an Innovate UK competition.
Step 1: Define the environmental outcome in measurable terms
Every green application starts with a clear, measurable environmental benefit. Vague claims such as “we will be more sustainable” do not score. State the specific outcome: how much energy, carbon, or waste your project will save, and over what period.
Step 2: Check eligibility before you write anything
Read the eligibility criteria first, not last. Common reasons for rejection include applying to the wrong region, being the wrong company size, or including ineligible costs. Innovate UK applications that fail eligibility are not sent for assessment at all.
Step 3: Show the project is additional, not routine
Funders want to support work that would not happen without them. Explain why the grant is needed: a routine replacement you would do anyway is harder to fund than a project the grant makes possible.
Step 4: Demonstrate commercial and technical credibility
Assessors look for a team that can deliver, a realistic plan, and a clear route to market. Show the technical uncertainty, your plan to resolve it, the main risks, and the commercial opportunity that follows. For capital grants, show the project is well specified and the costs are evidenced by quotes. Our guide to creating a business budget can help you build the financial case.
Step 5: Budget honestly and keep records
Grants pay a share of eligible project costs, so your budget must be realistic and evidenced. Do not inflate costs: auditors check. Most schemes require you to keep records for several years, and some pay in arrears after you spend and evidence invoices. Plan your cash flow accordingly. If cash flow is a concern, read our comparison of business loans vs personal loans for your borrowing options.
Step 6: Submit early and follow the rules exactly
Online portals can be slow on deadline day, and late applications are rejected. Submit well before the closing time, answer every question, and stay within word and budget limits.
Common Mistakes That Lose Green Grants
- Applying for a scheme you are not eligible for because you skipped the criteria. Read them first.
- Stating environmental benefits without numbers. Assessors score measurable outcomes, not intentions.
- Claiming work that is routine business-as-usual rather than additional. Explain the funding gap.
- Starting the project before the grant agreement is signed. Many schemes disqualify retrospective spending.
- Combining grants and R&D tax relief without advice. Subsidised expenditure rules can reduce your claim.
- Ignoring match funding requirements. If a scheme covers 50%, you must show where your 50% comes from.
- Missing the deadline by minutes. Portal traffic spikes on closing day; submit early.
Conclusion
Green business grants in the UK in 2026 reward businesses that can show measurable environmental results. For equipment and efficiency upgrades, energy-efficiency schemes and local council grants are the fastest route. For developing new technology, Innovate UK clean-tech competitions offer the largest awards. For day-to-day innovation spending, R&D tax relief and capital allowances quietly reduce the cost of going green.
The green funding landscape changes every year, so treat this guide as a starting map, not the final word. Check the current rounds on gov.uk, the Innovation Funding Service, and your local authority before you apply, and get professional advice on tax interactions. If your funding need is not green, our companion guide to small business grants in the UK for 2026 covers the general grant landscape. If you are still costing out the green project itself, our guide to the cost of starting a business in the UK will help you budget the full picture.
This article is general information only and not financial advice. Grant amounts, deadlines, and eligibility rules change; always verify the current guidance before applying.
Frequently Asked Questions
Are there green business grants for SMEs in the UK in 2026?
Yes. UK SMEs can access green grants in 2026 through national schemes such as the Boiler Upgrade Scheme, regional and council capital grants for energy-efficiency upgrades, Innovate UK competitions for clean-tech R&D, and local Growth Hub programmes.
What is the Boiler Upgrade Scheme and how much does it pay?
The Boiler Upgrade Scheme provides grants of up to £7,500 per installation for air-source or ground-source heat pumps. As of 2026, it is open to small businesses in England and Wales and has been extended to 2028.
Can small businesses get grants for solar panels?
There is no single national solar grant for businesses, but many regional and council green grant schemes cover solar PV. Check your local authority and Growth Hub for current rounds.
What does Innovate UK fund for clean tech?
Innovate UK funds clean-tech R&D through Smart Grants (disruptive innovation including net zero), the Investor Partnerships: Clean Energy and Climate Technologies competition (grants plus equity), the Battery Innovation Programme, and the Sustainable Smart Factories competition.
What is the difference between a green grant and a green loan?
A green grant is non-repayable funding for an environmental project. A green loan must be repaid, usually with interest. For example, Innovate UK Innovation Loans of £100,000 to £5 million are loans, not grants. Always check whether the money must be repaid before applying.
Do I need to match-fund a green grant?
Often, yes. Many green grant schemes are match-funded, meaning they pay a share of project costs, typically around 50%, and you must fund the rest. Check each scheme’s terms before you commit to a project.
Can I claim R&D tax relief on green innovation work?
Yes, if the work meets HMRC’s definition of R&D. For accounting periods beginning on or after 1 April 2024, most companies claim through the merged R&D scheme at 20%, with Enhanced R&D Intensive Support (ERIS) of up to 27% for loss-making, R&D-intensive SMEs. Grants can affect relief, so take advice.
What do grant assessors look for in a green application?
Assessors look for measurable environmental outcomes, eligibility, additionality (work that would not happen without the grant), a credible team and plan, realistic budgets with evidence, and a clear route to market for innovation projects. Vague sustainability claims without numbers score poorly.
Can I get a grant for EV charging points at my business?
Yes. The Workplace Charging Scheme covers up to 75% of purchase and installation costs, with a cap of £500 per socket from 1 April 2026. It has been extended until at least March 2027. The EV Infrastructure Grant provides £500 per parking bay for larger installations.
How do I find green grants from my local council?
Search your council’s website for “business grants” and “net zero”, and check your regional Growth Hub. Many councils run capital grant schemes for energy-efficiency upgrades funded through the UK Shared Prosperity Fund. Sign up for local business support newsletters to hear about new rounds.
Can I combine a green grant with R&D tax relief?
Sometimes, but the interaction is complex. Grants can count as subsidised expenditure, which affects how much R&D relief you can claim. Get advice from a qualified accountant before combining them.
Are there green grants for clean-tech startups before revenue?
Early-stage clean-tech startups can apply to Innovate UK competitions such as Smart Grants and the Investor Partnerships programmes, which fund pre-revenue R&D. These are highly competitive. Local incubator and university programmes may also offer smaller grants.
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