Solar panels are special rate expenditure. That single fact governs everything else about the claim: the writing down rate, which first-year allowance is available, and how the spend interacts with the rest of a company's capital allowances position in the year the installation happens.
Special rate, and what follows from it
Because solar panels sit in the special rate pool, the ordinary writing down rate is 6% a year rather than 14%. Full expensing does not apply to them, because that is a main-rate allowance; the 50% first-year allowance does, giving a company half the cost in year one with the balance entering the special rate pool. The annual investment allowance also applies and gives 100% up to £1 million, which for most installations is the better answer and the simpler one.
The practical order for a company installing panels
If the company has annual investment allowance headroom, claim it and relieve the whole installation in year one. If the £1 million is already committed to other spending, the 50% first-year allowance takes half and the special rate pool absorbs the rest at 6%. Either way the panels are plant, not part of the building, so the structure exclusion does not bite, and the cost of any works needed to install them is generally claimable as alteration incidental to the installation of plant.
What is not included
Roof works that are genuinely repairs are deducted as an expense rather than claimed as allowances, which is better rather than worse. Roof works that amount to replacing the roof are neither: they are capital and not plant, and go to structures and buildings allowances if anywhere. Where the same contractor quotes for panels and roofing in one figure, splitting that invoice is what makes the claim reliable, and it is the same discipline any integral features claim needs.
Questions people ask about capital allowances on solar panels
Do solar panels qualify for capital allowances?
Yes, as special rate plant and machinery. They can be relieved in full through the annual investment allowance, or at 50% in year one through the first-year allowance, or written down at 6%.
Does full expensing cover solar panels?
No. Full expensing applies to main-rate expenditure and solar panels are special rate. The 50% first-year allowance is the equivalent for special rate assets.
Can I claim for the roof work needed to install them?
Alterations to a building needed to install plant are claimable. Genuine repairs are deducted as an expense instead, and replacing a roof is capital but not plant.