Glossary · 69 terms · Updated 12 May 2026

UK commercial solar glossary

Plain-English definitions of the 69 most important UK commercial solar terms covering grants, tax reliefs, finance routes, engineering specifications and compliance frameworks. Linked to source guides for deeper reading.

Tax reliefs & capital allowances

AIA — Annual Investment Allowance

A UK corporation tax and income tax relief letting businesses deduct 100% of the cost of qualifying plant and machinery (including solar PV systems, panels, inverters and battery storage) from taxable profits in the year of purchase, capped at £1m per accounting period. Available to limited companies, sole traders, partnerships and LLPs. Full guide.

CT — Corporation Tax

UK tax on the profits of limited companies. Main rate 25% (2026), small profits rate 19% for companies with profits under £50,000. Solar capital allowances reduce CT bills directly — every £1 of FYA saves 25p of CT at the main rate.

ECA — Enhanced Capital Allowance

A 100% first-year allowance for specific energy-saving equipment listed on the Energy Technology List (ETL). Maintained by the Carbon Trust on behalf of government. Less commonly used than AIA / Full Expensing for solar but applies to specific ETL-listed inverters and storage products.

Full Expensing — Full Expensing (100% First Year Allowance)

A UK corporation tax relief available to limited companies that allows 100% deduction of qualifying main-pool plant and machinery — including solar PV — from taxable profits in year one with no upper cap. Effective tax saving at 25% main CT rate: 25p per £1 spent. Made permanent in Spring Budget 2024. Full guide.

FYA — First Year Allowance

A type of capital allowance that lets a business write off 100% (or sometimes 50%) of qualifying capital expenditure in the year the asset is purchased, rather than spreading it over the asset's useful life. Both AIA and Full Expensing are FYA-style reliefs.

HMRC — His Majesty's Revenue and Customs

The UK government department responsible for collecting tax. Administers AIA, Full Expensing and ECA reliefs. Solar capital allowances are self-assessed via the CT600 corporation tax return or SA self assessment.

WDA — Writing Down Allowance

The 18% annual allowance (main pool) or 6% (special rate pool) that lets businesses gradually write down the value of plant and machinery for tax purposes. AIA and Full Expensing override WDA — you deduct 100% in year one instead of spreading over multiple years.

Export income & tariffs

FIT — Feed-in Tariff

The previous UK government-funded tariff for small-scale renewable electricity, closed to new systems on 31 March 2019. Existing FIT-registered systems continue receiving payments under their original 20-25 year contracts. Replaced by SEG for new installations.

REGO — Renewable Energy Guarantee of Origin

An Ofgem-issued certificate confirming that 1 MWh of electricity was generated from renewable sources. REGOs trade separately from the electricity itself, enabling renewable claims to be 'unbundled' from physical generation. Current market price approximately £8-£20 per certificate (0.8p-2p/kWh equivalent). Full guide.

SEG — Smart Export Guarantee

The UK regulatory framework requiring Ofgem-licensed energy suppliers with 150,000+ domestic customers to offer at least one per-kWh tariff for solar PV export. Replaced the Feed-in Tariff for new systems commissioned after 1 April 2019. Best 2026 fixed rates around 15p/kWh; regulatory floor around 3p/kWh. Full guide.

Grant programmes

BEIS — Department for Business, Energy & Industrial Strategy

Former UK government department (2016-2023) covering business, energy and industrial policy. Split in February 2023 — energy/climate functions transferred to DESNZ. Historical references to BEIS grant schemes typically refer to the DESNZ successor programmes.

DESNZ — Department for Energy Security & Net Zero

UK government department responsible for energy and climate policy, including IETF, PSDS, Heat Networks Investment Project, and SEG regulation. Created in February 2023 when BEIS split into DESNZ, Department for Business and Trade, and Department for Science, Innovation and Technology.

FETF — Farming Equipment and Technology Fund

DEFRA-administered grant programme providing match-funded support for English farmers investing in productive equipment, including solar PV combined with grain drying, refrigeration, or slurry handling. Part of the wider Farming Investment Fund. Typical awards £2,500-£25,000 per item.

IETF — Industrial Energy Transformation Fund

DESNZ-administered capital grant programme for energy-intensive UK industry — manufacturers, food processors, chemicals, paper, metals, ceramics. Match-funded 30-50% of project capex. Total programme value £500m over 2021-2028. England, Wales, Northern Ireland (Scotland has parallel scheme). Full guide.

PSDS — Public Sector Decarbonisation Scheme

DESNZ capital grant programme administered by Salix Finance providing 100% grant funding to public sector bodies in England for decarbonisation projects — heat pumps, insulation, LED, solar PV, BMS upgrades. Phases run periodically; oversubscribed within hours of opening. Total programme value £3+ billion. Full guide.

Salix — Salix Finance

Independent, government-funded company delivering interest-free loans and grant programmes for the UK public sector — Salix Recycling Fund (0% loans), PSDS administration (grants), and Salix Wales/Scotland/NI equivalents. Based on the principle that energy efficiency investments are repaid from energy savings. Full guide.

Technical & engineering

AC — Alternating Current

The form of electrical current supplied to UK commercial premises by the grid (50Hz, typically 415V three-phase or 230V single-phase). Solar inverters convert DC panel output to grid-synchronised AC.

Behind-the-meter — Behind-the-meter (BtM) generation

Solar electricity consumed directly on-site by the same business that owns the system — does not pass through the public grid. Avoids transmission/distribution charges and CCL. Maximum value when self-consumption rates are high (typically 60-90% for office, hotel, industrial loads).

CT clamp — Current transformer clamp

A non-invasive sensor that measures electrical current by clamping around a live cable. Used in solar generation monitoring and energy audits without disconnecting supply. Common in commercial submetering.

DC — Direct Current

The electrical current produced by solar panels — flows in one direction. DC must be converted to AC by an inverter before use in commercial premises or export to the grid.

DNO — Distribution Network Operator

Companies that own and operate the local electricity distribution network. UK has 6 main DNOs: UK Power Networks, Northern Powergrid, SP Energy Networks, Western Power Distribution, Electricity North West, SSEN. Plus several Independent DNOs (IDNOs) on large industrial sites. G99 applications submitted to your local DNO.

G99 — Engineering Recommendation G99

UK technical specification published by the Energy Networks Association governing the connection of generating plant (including solar PV) to the public electricity distribution network. Required for systems above 16A per phase. DNO approval typically takes 5-11 weeks; export limits are commonly imposed by DNO capacity studies.

Half-hourly settlement — Half-hourly settlement (HHS)

The Ofgem-regulated process whereby electricity consumption and export is measured and settled in 48 half-hour blocks per day. Required for SEG, time-of-use tariffs, and large commercial supplies. Smart meters enable HHS for sites previously on monthly settlement.

Inverter — Solar inverter

The device that converts DC electricity from solar panels to AC electricity matching the grid. Modern commercial inverters include MPPT (Maximum Power Point Tracking) optimisation, monitoring, and grid-tie functionality. Major manufacturers: SolarEdge, Huawei, SMA, Sungrow, Fronius.

kWh — Kilowatt-hour

The standard unit of electrical energy. 1 kWh = the energy a 1 kW appliance uses in 1 hour. UK commercial electricity rates in 2026 typically £0.22-£0.30 per kWh imported; SEG export tariffs 3-15p per kWh.

kWp — Kilowatt-peak

The standard unit of solar PV system capacity, measuring the system's peak DC power output under Standard Test Conditions (1,000 W/m² irradiance, 25°C panel temperature). 1 kWp typically generates 850-1,100 kWh per year in UK conditions.

LFP — Lithium Iron Phosphate

Common chemistry for commercial battery storage — higher cycle life, better safety, slightly lower energy density than NMC (Nickel Manganese Cobalt). Dominant chemistry for stationary energy storage in 2026 due to safety and cost.

MCS — Microgeneration Certification Scheme

UK consumer protection scheme for small-scale renewable energy systems up to 50kWp. MCS certification covers both products and installers; required for SEG eligibility up to 50kWp. Above 50kWp, engineering sign-off is accepted by Ofgem. Operated by the MCS Service Company on behalf of government.

MPAN — Metering Point Administration Number

The unique 21-digit number identifying an electricity supply point in the UK. Required for SEG applications, energy supplier switching, and DNO connection. Found on your electricity bill.

MPPT — Maximum Power Point Tracking

An inverter algorithm that continuously adjusts operating voltage/current to extract the maximum possible power from solar panels under varying light, temperature and shading conditions. Modern commercial inverters include 2-4 MPPT inputs allowing different roof orientations to operate independently.

MWp — Megawatt-peak

1,000 kWp. Threshold above which UK commercial solar systems exit SEG and enter the wholesale electricity market via PPA arrangements. Large warehouse rooftop systems and solar farms typically operate in this range.

Net export limit — DNO net export limit

The maximum power the DNO will accept from your site under your G99 connection agreement. Often constrains larger systems — a 200kWp system with a 50kW export limit will see the inverter curtail generation when self-consumption is low.

Self-consumption — Self-consumption rate

The proportion of solar generation used directly on-site versus exported to the grid. Typical UK commercial sites: 50-90% depending on load profile, system size and battery integration. Self-consumed kWh save the import rate (~28p); exported kWh earn the SEG rate (3-15p).

SMETS2 — Smart Metering Equipment Technical Specification 2

The current UK smart meter specification (as of 2026). SMETS2 meters communicate via the Data Communications Company (DCC) network — enabling SEG, half-hourly settlement, and supplier switching without meter replacement. Older SMETS1 meters were largely upgraded by 2024.

Solar farm — Solar farm (utility-scale solar)

A ground-mounted solar PV installation typically 1MWp+, generating electricity for sale to the grid via PPA or wholesale market. Above 5MWp typically requires planning consent under the Town and Country Planning Act.

Spill — Solar spill / export

Solar electricity generated in excess of immediate on-site demand, exported to the grid under SEG or PPA arrangements. Spill rates vary inversely with self-consumption — for a warehouse with low daytime load, spill can be 75% of generation.

Finance & accounting

Capex — Capital expenditure

Money spent acquiring or upgrading long-term assets — including solar PV systems. Capital expenditure receives different tax treatment from revenue (operating) expenditure: capital allowances (AIA, Full Expensing) apply to capex but not opex.

IFRS 16 — International Financial Reporting Standard 16

Accounting standard requiring most leases to be capitalised on the balance sheet from 2019 — applies to large UK companies and group reporters. Affects whether operating leases for solar are on or off balance sheet. UK GAAP equivalent is FRS 102 Section 20.

IRR — Internal Rate of Return

The discount rate that makes the net present value of a project zero — used to compare investment returns. Typical commercial solar IRR in 2026: 14-22% (cash purchase, limited company); 7-11% (operating lease). Stronger than most operating capex deployments.

LCOE — Levelised Cost of Energy

The discounted cost per unit of energy over the asset lifetime — useful for comparing solar against grid electricity. UK commercial solar 2026 LCOE typically £0.04-£0.07/kWh, materially below the £0.22-£0.30/kWh grid import rate.

Opex — Operating expenditure

Money spent on day-to-day operations — including PPA payments, operating lease rents, energy bills. Opex is fully deductible from taxable profit as a revenue expense (rather than via capital allowances).

Payback — Payback period

The number of years for cumulative savings to equal the initial investment. Typical UK commercial solar post-tax payback in 2026: 4-6 years for limited companies using Full Expensing, 5-7 years for partnerships using AIA, 3-5 years where capital grants apply.

PPA — Power Purchase Agreement

A contract where a third-party investor installs and owns a solar PV system on your property and sells you the electricity at a fixed per-kWh rate over typically 15-25 years. You pay nothing upfront; the investor earns the spread between cost of capital and electricity savings. Full guide.

Compliance & reporting

CCA — Climate Change Agreement

Voluntary agreements between energy-intensive UK businesses and the Environment Agency to reduce energy use or carbon emissions in exchange for reduced CCL rates. Solar PV that reduces site electrical consumption can affect CCA energy baselines.

CCL — Climate Change Levy

A UK tax on energy use by businesses, charged on electricity, gas, LPG and solid fuels. Main rates around 0.78p/kWh on electricity (2026). Self-consumed solar electricity is not subject to CCL — adding to the value of self-consumption versus export.

De minimis — De minimis subsidy threshold

The cumulative ceiling on public subsidy (currently £315k over 3 years in the UK, formerly €200k under EU state aid). Most regional growth hub grants are issued as de minimis subsidy; stacking multiple grants requires monitoring this ceiling.

EPC — Energy Performance Certificate

A government-required certificate rating a building's energy efficiency from A (best) to G (worst). Required for letting, selling, or constructing commercial property in the UK. SBEM (Simplified Building Energy Model) is the assessment tool used for non-domestic EPCs.

ESOS — Energy Savings Opportunity Scheme

A mandatory UK energy assessment scheme for large enterprises (250+ employees or £40m+ turnover). Requires four-yearly energy audits and reporting. Phase 3 reporting deadline December 2023; Phase 4 expected late 2027.

GHG Protocol — Greenhouse Gas Protocol

The world's most widely used carbon accounting framework, categorising emissions into Scope 1 (direct), Scope 2 (purchased energy), and Scope 3 (value chain). The basis for most corporate carbon reporting including TCFD and SBTi.

Listed Building Consent — Listed Building Consent (LBC)

Statutory consent required before altering or extending listed buildings in England and Wales. Required for solar PV on listed buildings — though most listed-building solar installs target unlisted ancillary buildings rather than primary elevations.

MEES — Minimum Energy Efficiency Standards

UK regulations requiring commercial property to achieve minimum EPC ratings. From 1 April 2027, commercial property must achieve EPC C to be lettable; from 1 April 2030, the threshold rises to EPC B. Solar PV typically lifts EPC ratings by 1-2 bands.

Permitted Development — Permitted Development Rights

UK planning law allowing certain types of building work without full planning consent. Most commercial rooftop solar installations qualify as permitted development. Listed buildings and conservation area properties require additional consents.

SBEM — Simplified Building Energy Model

The UK government's methodology for assessing non-domestic buildings for EPC purposes. Recognises solar PV as a contribution to energy efficiency; typically lifts a commercial building EPC rating by 1-2 bands.

SBTi — Science Based Targets initiative

A global initiative validating corporate emissions reduction targets against climate science. Many large UK companies have SBTi-validated targets requiring credible decarbonisation pathways — solar PV is a typical Scope 2 intervention.

Scope 2 — Scope 2 emissions

Indirect greenhouse gas emissions from purchased electricity, steam, heating and cooling. Self-consumed solar electricity directly reduces Scope 2 emissions calculation. The most directly-influenceable category in GHG Protocol reporting.

SECR — Streamlined Energy and Carbon Reporting

UK mandatory annual reporting requirement for large companies disclosing energy use, GHG emissions and energy efficiency actions in their Directors' Report. Started 2019; expanded under the 2022 Companies Act.

Subsidy control — UK subsidy control regime

UK regime replacing EU state aid rules from 1 January 2021. Limits cumulative public subsidy to a single beneficiary at £315k over three financial years (Minimal Financial Assistance threshold). Affects how IETF, PSDS and regional grants can be combined.

TCFD — Task Force on Climate-related Financial Disclosures

International framework for disclosing climate-related risks. UK large companies (over 500 employees and £500m turnover, or premium-listed) must disclose under TCFD-aligned requirements. Solar reduces transition-risk exposure and Scope 2 emissions.

Policy & regulation

BSUOS — Balancing Services Use of System charges

Charges National Grid levies on suppliers to recover costs of balancing the electricity system. Self-consumed solar avoids BSUOS — adds 0.5-1p/kWh to the value of self-consumption versus grid import.

Capacity Market

UK government scheme ensuring sufficient electricity capacity. Large commercial loads can register as Demand Side Response (DSR) — being paid to reduce demand at peak times. Solar + battery sites can participate in DSR markets.

DSR — Demand Side Response

Programs where commercial energy users are paid to flex their electricity consumption — typically reducing load at peak grid stress times. Battery storage paired with solar enables DSR participation, adding 5-15% revenue uplift on larger systems.

HMG — His Majesty's Government

The Government of the United Kingdom — used in grant programmes and policy documents to denote central government funding and authority.

Net Zero — Net Zero (UK statutory target)

UK statutory target requiring greenhouse gas emissions to fall to net zero by 2050 (England, Wales, NI) and 2045 (Scotland). Set in the 2008 Climate Change Act (amended 2019). Major driver of commercial solar grant funding.

Ofgem — Office of Gas and Electricity Markets

The UK regulator for gas and electricity markets, including SEG, REGOs, and the Renewables Obligation. Sets the regulatory framework for solar export tariffs and renewable origin certification.

Triad — Triad charges

Historical UK transmission charging mechanism (replaced post-Targeted Charging Review). Large electricity consumers historically paid charges based on peak winter demand periods — solar avoidance of Triad peaks was a major value driver. Modern equivalent is the Demand Residual.

Project & professional

BIM — Building Information Modelling

A digital representation of physical and functional characteristics of a facility — increasingly required for public sector construction projects. UK government has mandated BIM Level 2 for centrally-procured public sector projects since 2016.

Cat 2 survey — Category 2 structural survey

Detailed structural assessment of a building's capacity to support additional load — typically required before installing solar PV on older industrial buildings. Confirms whether the roof can support an additional 12-25 kg/m² imposed load plus wind/snow factors.

EoI — Expression of Interest

A short pre-application submission to grant programmes (IETF, PSDS, regional schemes) indicating intent to apply. Successful EoIs are invited to submit full applications. Typical EoIs 2-3 pages including project description, indicative budget and savings.

RIBA Stage — RIBA Plan of Work stage

Royal Institute of British Architects' framework for construction project stages: 0 (Strategic), 1 (Brief), 2 (Concept Design), 3 (Spatial Coordination), 4 (Technical Design), 5 (Construction), 6 (Handover), 7 (In Use). PSDS applications typically require RIBA Stage 3 design at submission.