With rising electricity prices and increasing pressure to reduce carbon emissions, many UK businesses are turning to commercial energy storage systems. Battery storage allows companies to store excess renewable energy, reduce peak electricity costs, and improve energy independence.
Although the UK does not currently offer a single nationwide grant specifically for commercial battery storage, businesses can still benefit from several incentives, tax relief programs, and export schemes that significantly reduce investment costs.
This guide explains the main energy storage incentives available for non-domestic properties in the UK and how businesses can apply for them.
Energy Storage Incentives for UK Businesses
1. Smart Export Guarantee (SEG)
The Smart Export Guarantee (SEG) allows businesses with renewable energy systems to sell excess electricity back to the grid.
Under SEG, licensed electricity suppliers must offer tariffs for exported electricity generated from renewable sources such as solar PV.
Key requirements:
- The renewable energy system must have a capacity of 5MW or less
- The system must be installed by an MCS-certified installer
- A smart meter must be installed to record exported electricity
Although SEG primarily applies to renewable generation (such as solar panels), businesses often combine solar panels with battery storage to maximise self-consumption and export excess electricity when tariffs are favourable.
Learn more from the UK government guidance.
2. Business Rates Relief for Renewable Energy Equipment
The UK government introduced business rates relief for onsite renewable energy generation and storage systems to encourage companies to invest in clean energy.
Eligible equipment may include:
- Solar panels
- Wind turbines
- Battery storage systems
- Combined renewable energy technologies
From April 2022 to March 2035, businesses installing qualifying equipment on their properties can receive 100% relief from additional business rates related to these installations.
This significantly reduces the long-term cost of installing commercial renewable and storage systems.
More details can be found.
3. Capital Allowances for Energy Equipment
Businesses investing in energy storage may also benefit from capital allowances, which allow companies to deduct equipment costs from taxable profits.
Under the UK tax system, many energy-efficient technologies qualify for:
- First-Year Allowances (FYA)
- Full Expensing for plant and machinery
This means businesses may be able to deduct up to 100% of the equipment cost from taxable profits in the first year, significantly reducing the effective investment cost.
Further information is available from HMRC.
4. Innovation Funding and Smart Energy Programs
The UK government and innovation agencies periodically provide funding for projects involving smart energy management, battery storage, and flexible energy systems.
Programs may include support from:
- Innovate UK
- The Department for Energy Security and Net Zero
- Local authority sustainability initiatives
For example, the government has funded projects under the Non-Domestic Smart Energy Management Innovation Competition, which supports advanced energy management solutions for commercial buildings.
See available funding opportunities.
Steps for Businesses to Apply for Energy Storage Incentives
While the exact process depends on the incentive, most businesses follow a similar path when implementing a commercial energy storage system.
Step 1: Conduct an Energy Assessment
Evaluate your building’s electricity consumption, peak demand, and renewable generation potential.
Step 2: Design the Energy Storage System
Work with an experienced energy provider to design a battery system that matches your energy usage profile.
Step 3: Install Certified Equipment
Ensure that your renewable energy and battery storage system is installed by qualified and certified professionals.
Step 4: Apply for Incentives
Depending on your project, you may apply for:
- Smart Export Guarantee tariffs
- Business rates relief
- Capital allowances through tax filings
- Innovation funding programs
Step 5: Optimise Energy Usage
After installation, businesses can optimise energy usage by:
- Storing electricity during off-peak periods
- Reducing peak demand charges
- Exporting excess renewable energy to the grid
Why Businesses Are Investing in Battery Storage
Commercial battery storage provides several financial and operational benefits:
- Lower electricity bills through peak shaving
- Increased self-consumption of solar energy
- Revenue from exporting electricity
- Improved resilience during power outages
- Reduced carbon footprint
For small and medium-sized businesses, combining solar power with battery storage can deliver a strong return on investment while supporting sustainability goals.
Although the UK does not currently offer a single dedicated grant for commercial battery storage systems, businesses can still take advantage of several financial incentives and policy support mechanisms.
By combining programs such as the Smart Export Guarantee, business rates relief, and capital allowances, companies can significantly reduce the cost of adopting energy storage technology.
As energy prices continue to fluctuate and sustainability targets become stricter, commercial battery storage is becoming an increasingly attractive investment for UK businesses.