Industrial Energy Transformation Fund: closed since July 2025 — what industrial sites use for solar now

The IETF closed in July 2025: no Phase 4, no successor fund, last window April 2024. What energy-intensive sites in England, Wales and NI use for solar now.

Overview

The Industrial Energy Transformation Fund (IETF) was the UK government's capital grant scheme for decarbonising energy-intensive industry. Administered by the Department for Energy Security & Net Zero, it match-funded typically 30-50% of project capex at industrial sites in eligible sectors — manufacturers, food and drink processors, paper mills, chemicals, metals, glass and ceramics — across three phases from 2020. It is closed: following the 2025 Spending Review the government decided there would be no further extension of the IETF and that no successor fund is planned, and the planned second competition window of Phase 3 was cancelled, so the Spring 2024 window (29 January to 19 April 2024) was the last.

Solar PV was an eligible technology under the energy-efficiency strand when paired with process electrification, heat recovery or storage — never as a standalone rooftop grant. This page is kept as a record of how the scheme worked and to stop energy-intensive sites planning around a Phase 4 that is not coming. What remains for an industrial rooftop is tax relief — the Annual Investment Allowance on the first £1m of qualifying spend and the 50% first-year allowance on the balance (solar is special-rate plant, so full expensing does not apply to the panels) — Smart Export Guarantee and REGO income, enhanced capital allowances where the site sits inside a Freeport tax site, and regional growth-hub grants where a round is open.

Key facts at a glance

Eligibility criteria

• Eligible sites were in a qualifying Standard Industrial Classification (SIC) code: manufacturers covered by Climate Change Levy main rates qualified automatically; data centres and most service sectors were excluded.
• England, Wales and Northern Ireland — Scotland ran the separate Scottish IETF, whose three calls are also closed.
• Projects had to deliver a measurable reduction in energy use or emissions against a 12-month baseline.
• Minimum project cost was typically £100,000 (small project route) or £500,000 (large project route).
• Applicants contributed 50-70% match funding from their own or private sources.
• An Expression of Interest came before the full application; projects already started could not apply.
• Grants were treated as subsidies under the UK subsidy control regime.

How to apply

There is no application route. The IETF closed in July 2025: DESNZ confirmed after the Spending Review that there will be no further extension and no successor fund, and the planned second Phase 3 window will not take place. Any page, adviser or newsletter describing a 'Phase 4', a 2026 window or a '~£100m round' is working from guidance that was never published.

What an energy-intensive site does instead:

1. Claim the capital allowances. Solar PV is special-rate plant: the Annual Investment Allowance gives 100% relief on the first £1m of qualifying spend in the year, and the 50% first-year allowance covers the balance. Full expensing applies to main-rate plant bought alongside it — batteries, VSD compressors, heat-recovery plant — not to the panels.

2. Check the Freeport position. Sites inside a Freeport tax site can claim enhanced capital allowances on plant and machinery.

3. Look for a live regional round. Growth-hub capital grants (£1k-£100k depending on the programme) are the only grant money most manufacturers can still reach; they open and close, so check the current call.

4. Register for export income. SEG on the export and REGO accreditation above 50 kWp.

5. Scotland. The Scottish Industrial Energy Transformation Fund is a separate programme; all three of its calls are closed and no reopening date has been published — check gov.scot before planning around it.

6. Keep the baseline work. An ISO 50001-compatible energy baseline still pays for itself through ESOS, Climate Change Agreement targets and customers' Scope 3 reporting, whether or not a grant ever attaches to it.

Sectors it covered

• Food and drink manufacturing (was the largest sector by IETF awards; the fund closed in July 2025)
• Chemicals and pharmaceuticals manufacturing
• Pulp, paper and board manufacturing
• Glass, ceramics and refractories manufacturing
• Cement, lime and gypsum manufacturing
• Iron, steel and metals processing
• Automotive assembly and components
• Heavy engineering and machinery
• Textiles and clothing (subject to qualifying SIC code)
• Plastics and rubber processing

Stacking with other grants and reliefs

Most successful 2026 commercial solar projects use a combination of schemes — this is where independent advice earns its keep. Industrial Energy Transformation Fund: closed since July 2025 — what industrial sites use for solar now typically combines well with:

• Full expensing and solar PV: why solar cannot use it, and what to claim instead — Not available on solar panels. AIA 100% up to £1m, or the 50% special-rate first-year allowance
• Annual Investment Allowance for business solar — Up to £1 million per year, 100% first-year deduction
• Smart Export Guarantee for businesses — 3p–15p per kWh exported (2026 fixed tariffs)

Sources & further reading

• IETF closure notice on gov.uk (collection page, 'IETF closed, July 2025')
• Scottish IETF (SIETF) on gov.scot — all three calls closed

Frequently asked questions