The 0% VAT rate on solar panels will last until the 1st of April 2027. After that, VAT on solar panels will increase to 5% – meaning it won’t go back to the 20% rate. You won’t need to meet the pre-April 2022 criteria to qualify for the reduced rate either. The 5% VAT rate will apply to solar panels being installed on any residential property.
According to the UK government's list of Energy Saving Measures (ESMs), most solar photovoltaic (PV) panels installed on residential properties in Scotland, England and Wales (plus Northern Ireland, as of 1 May 2023) are exempt from VAT, meaning there’s no VAT included in the purchase and installation costs.
And if you buy solar panels from one provider and have them installed by someone else, you'll be hit with a standard 5% or 20% VAT rate when buying them. It's also worth remembering that any maintenance or repairs after installation will be at the standard VAT rate. The 0% VAT on solar panels in the UK is set to last until 31 March 2027.
In February 2024, the government added storage batteries to the list of green products that enjoy a 0% VAT rate – and it makes no difference whether you get solar panels too or not. This could save you hundreds of pounds, though you'll still spend thousands in upfront costs. Domestic solar export revenues are usually not taxable.
Whether you're buying a standalone solar battery or getting a battery installed with a solar panel system, you'll benefit from the 0% VAT rate. This rule changed in February 2024 to include standalone storage batteries at the 0% VAT, regardless of whether you’re getting solar panels at the same time. Is there VAT on solar panel income?
Scrapping of VAT on solar panels aims to reduce the cost of installing solar panels. The zero rate will run until 31 March 2027 and move to 5% VAT. Solar batteries also qualify for 0% VAT relief whether you’re installing them simultaneously with the panels or adding them to an existing system. What is the VAT on Solar Panels in the UK?