If you have been sent a commercial solar proposal in the last two years, there is a good chance it told you the system qualifies for full expensing. Solar cannot claim full expensing, and the error is common enough that it is worth explaining properly rather than just correcting.
What full expensing actually covers
Full expensing gives 100% first-year relief on qualifying plant and machinery — but only on main-pool expenditure. That is the category the relief was written for, and it is where most commercial equipment sits.
Why solar is not in it
Solar PV is classified as special-rate expenditure. Special-rate assets cannot claim full expensing. This is not an interpretation or a grey area; it is a classification, and it applies to the array whether the system is 30 kWp on an office roof or 1 MWp on a distribution centre.
What does apply — and why it usually does not matter
The route that applies is the Annual Investment Allowance: 100% relief in year one, up to the £1m annual limit. For the overwhelming majority of single-site commercial rooftops, the AIA covers the entire project — so the cash effect in year one is identical to what the proposal promised.
Above the £1m limit, special-rate expenditure attracts a 50% first-year allowance, with the balance going into the special-rate pool.
So why does the distinction matter? Because the claim has to be made under the right heading. An accountant filing under full expensing for a special-rate asset is filing an error — one that is straightforward to correct in advance and awkward to unpick afterwards.
The other claim to check while you are there
The same proposals often imply that adding plant to the roof will raise your business rates. On-site renewable generation plant sits outside the rateable value through to 2035, so a rooftop array does not increase your rates bill during that period.
What to ask a supplier
Ask them which allowance they are claiming and why. A supplier who says "full expensing" without qualification is reciting marketing copy. A supplier who says "AIA, because solar is special-rate, and here is what that means above £1m" has actually read the rules — and is more likely to have read the ones that govern your grid connection too.
If you want the position applied to a specific building and load profile, our commercial solar installation page sets out how we size and quote commercial systems, including the G99 application that usually sets the project timeline.