Since 6 April 2016, all energy generation activities have been excluded from SEIS, EIS and VCTs — generating or exporting electricity, making electricity generating capacity available, generating heat or any other form of energy, and producing gas or fuel. A solar farm, wind project or generation SPV cannot raise under the schemes. But the exclusion targets generation, not cleantech: companies selling energy technology — software, storage products, hardware, monitoring platforms or installation services — generally qualify. For 2026/27 that’s 50% investor relief under SEIS and 30% under EIS, so knowing which side of the line your model sits on is worth confirming with HMRC advance assurance before you raise.
Why generation is excluded — and why that’s not the whole story
The exclusion exists because subsidised generation broke the schemes’ purpose. Feed-in-tariff-backed solar and wind projects offered contractually predictable returns — the opposite of the entrepreneurial risk SEIS and EIS were built to reward — and investment flooded in for the tax relief rather than the venture. Subsidised generation was excluded from 2015, and from 6 April 2016 the exclusion was extended to all energy generation, subsidised or not, including the community energy schemes that had briefly been carved out.
The result is a line that runs through the middle of the cleantech sector: the same climate mission can be structured as an excluded generation business or a qualifying technology business.
Which cleantech models qualify — and which don’t
The test is what your company’s trade actually is. Selling energy technology, products or services is generally a qualifying trade; generating, exporting or selling energy you produce — or making generating capacity available — is not.
| Business model | Likely position | Why |
|---|---|---|
| Energy management / optimisation software | Generally qualifies | The trade is software — the customer’s industry is irrelevant |
| Battery or storage hardware sold as a product | Generally qualifies | Manufacturing and selling technology, not generating energy |
| Cleantech component manufacturer (heat pumps, inverters) | Generally qualifies | A manufacturing trade |
| Solar / renewables installation business | Generally qualifies | An installation services trade — you fit generation assets, you don’t operate them |
| EV charging network selling electricity to drivers | Grey area | Not generation, but the revenue is energy supply — structure matters; advance assurance essential |
| Grid-scale storage operator trading electricity | Grey area, leaning excluded | Trading stored electricity or making generating capacity available to the grid sits inside the exclusion’s statutory language |
| Solar farm / wind project / generation SPV | Excluded | Generating and exporting electricity is a named excluded activity |
| Hydrogen production | Excluded | Producing gas or fuel is a named excluded activity — a trap for hydrogen startups |
| Community energy scheme | Excluded | The 2015–16 changes removed the community carve-out specifically |
Starting positions, not conclusions — HMRC assesses the actual trade, and hybrid models are judged on the mix. The “substantial part” threshold works the same way as for fintech: a small excluded slice inside a mainly qualifying trade doesn’t disqualify the company by itself.
The hybrid-model problem
Cleantech companies drift across the line more than any other sector. A storage-hardware startup that starts operating its own grid-connected assets, a software company that takes a revenue share of generation, an installer that retains ownership of rooftop systems and sells the power — each has shifted trade income from qualifying to excluded. Two disciplines matter:
- Before raising: map every revenue line against the exclusion, and put the analysis in the advance assurance application rather than hoping HMRC doesn’t ask
- After raising: the qualifying conditions run for three years after each share issue — a pivot into generation during that window can strip investors’ relief retrospectively. The roadmap conversation and the tax conversation are the same conversation
The other conditions, briefly
The standard SEIS and EIS conditions apply alongside the trade test — for 2026/27: SEIS’s £250,000 lifetime raise limit, £350,000 gross-asset and 25-employee tests; EIS’s £10m annual / £24m lifetime limits (£20m / £40m for knowledge-intensive companies) and sub-250 FTE test (500 for KIC). Cleantech’s R&D intensity often supports knowledge-intensive company status, which raises those EIS ceilings — the same evidence that supports your R&D tax relief claim.
Advance assurance for cleantech
HMRC advance assurance is a written opinion, based on the facts presented, that a proposed share issue is likely to qualify — and for cleantech it’s where the generation question gets answered before investors ask it. It isn’t a guarantee, and it doesn’t survive a change of business model.
AccTek prepares and submits advance assurance applications with the revenue-line mapping and trade analysis HMRC needs — start with our SEIS advance assurance service or the application guide.
SEIS and EIS for cleantech FAQs
Do renewable energy companies qualify for SEIS or EIS?
It depends on the trade. Energy generation and export are excluded activities, so generation businesses — solar farms, wind projects, generation SPVs — generally can't raise under SEIS or EIS. Cleantech companies selling technology, software, hardware or installation services generally can. HMRC advance assurance is the reliable way to confirm the position before raising.
Why is energy generation excluded from SEIS and EIS?
Because subsidised generation projects offered predictable, low-risk returns that attracted investment for the tax relief rather than the venture — the opposite of what the schemes exist to reward. Subsidised generation was excluded from 2015, and from 6 April 2016 the exclusion was extended to all energy generation, including community energy schemes.
Does a solar installation business qualify for SEIS or EIS?
Generally yes — installing renewable energy systems for customers is a services trade, not energy generation. The position changes if the installer retains ownership of systems and sells the electricity they produce, which shifts revenue into the excluded activity. Advance assurance on the specific model is the safe route.
Can a battery storage company raise under SEIS or EIS?
Usually, if it sells storage technology as a product — manufacturing and selling hardware is a qualifying trade. Operating grid-connected storage assets, trading the electricity they hold or making generating capacity available to the grid sits much closer to the exclusion and needs specialist analysis before raising.
Is hydrogen production excluded from SEIS and EIS?
Producing gas or fuel is a named excluded activity, so a company whose trade is producing hydrogen generally cannot raise under the schemes. Companies developing hydrogen technology — electrolyser hardware, fuel-cell components, monitoring systems — sold as products are in a different position and may qualify.
Godwin Pinto ACA (ICAI) is the founder of AccTek and a member of ICPA, with 20+ years of experience in accounting and tax for contractors, startups and SMEs. Previously at PwC.
Official guidance: apply for SEIS and EIS on GOV.UK; the excluded activities, including all energy generation, are set out in HMRC’s Venture Capital Schemes Manual. AccTek Ltd is an independent accountancy practice and is not affiliated with HMRC or GOV.UK. This guide is general information based on 2026/27 rules, not advice on your company’s specific position.
Same mission, different structure, opposite tax outcome
Revenue-line mapping, advance assurance preparation and submission, and a roadmap review so a future pivot doesn’t strip your investors’ relief.
