Can a Care Home Claim Full Expensing on Solar Panels?

No. Full expensing does not apply to solar panels, and neither does the 40% first-year allowance introduced for purchases from 1 January 2026. Both are for main-rate plant and machinery, and solar panels are special-rate. The good news is that for almost every care home project it makes no practical difference, because the allowance that does the work — the Annual Investment Allowance — covers special-rate spend in full.

Why solar panels are special-rate

Section 104A of the Capital Allowances Act 2001 defines special rate expenditure. Paragraph (g) names expenditure on the provision of solar panels, from 1 April 2012 for corporation tax and 6 April 2012 for income tax. HMRC’s guidance on pools puts solar panels in the special rate pool alongside integral features, long-life assets and thermal insulation, with a writing down allowance of 6% a year. The main pool’s writing down allowance fell from 18% to 14% from 1 April 2026 for corporation tax and 6 April 2026 for income tax — but solar panels were never in it.

What each allowance says

Allowance	Who	What it covers	Solar panels?
Annual Investment Allowance	Any business	100% relief on up to £1 million of plant and machinery a year, including special-rate spend	Yes
Full expensing	Companies	100% relief on new, unused main-rate plant bought from 1 April 2023	No
50% first-year allowance	Companies	50% relief on new, unused special-rate plant bought from 1 April 2023	Yes (above the AIA)
40% first-year allowance	Any business	40% relief on new, unused main-rate plant bought on or after 1 January 2026	No
Special rate writing down allowance	Any business	6% a year on the pool balance	Yes

The order of play for a care home company is therefore simple: set the Annual Investment Allowance against the solar spend first; if a group’s total qualifying spend in the year goes above £1 million, claim the 50% first-year allowance on the excess; and write the rest down at 6%. An unincorporated operator — a partnership or sole trader running a home — has the Annual Investment Allowance and then the 6% writing down allowance.

Batteries are a separate question

Unlike solar panels, batteries are not named in section 104A. Whether a battery system is treated as part of the building’s electrical system — an integral feature, and so special-rate — or as stand-alone plant in the main pool needs its own analysis. If it is main-pool plant, full expensing (for companies) or the 40% first-year allowance could be available on it. Do not assume the battery follows the panels; get the treatment confirmed.

Don’t miss the building

The larger sums for most care homes are in the building rather than the array. Integral features such as the electrical, heating and hot-water systems and lifts are special-rate plant under section 33A. And care homes can usually claim the 3% Structures and Buildings Allowance on qualifying construction and renovation costs: the allowance excludes buildings in residential use, but section 270CF carves out homes that provide accommodation with personal care. Our guide to capital allowances for care homes works through the array, the fixtures and the structure together — and why the 0% VAT rate on care home solar to 31 March 2027 is a separate saving on top.

Sources: Capital Allowances Act 2001, sections 33A, 104A and 270CF (legislation.gov.uk); gov.uk — Claim capital allowances (annual investment allowance; full expensing and 50% first-year allowance; 40% first-year allowance) and Work out your writing down allowances: rates and pools (checked September 2026). This article is independent guidance, not tax advice.