In short: Solar panels installed in UK homes are currently charged at 0% VAT, and so are batteries. That relief is legislated to end on 31 March 2027, after which the rate returns to the reduced rate of 5% (not the standard 20%). It applies to a supply and installation by a contractor, not to materials bought on their own. The government hasn’t said it will extend it.
This article is general information, not tax advice. VAT rules can be technical, so check HMRC’s guidance (VAT Notice 708/6) and ask your installer to confirm in writing how VAT applies to your contract.
Time-sensitive. Last verified: 30 September 2026. The 0% rate ends on 31 March 2027. A House of Commons Library briefing published in September 2026 says the government hasn’t indicated it intends to extend it. Policy could still change, so check the latest position before you sign.
VAT is one of the few parts of a solar quote you can’t negotiate, but you can understand it. This guide explains what the 0% rate covers, what it doesn’t, how much the change in April 2027 is worth, and what to ask if your installation might slip past the deadline. For overall prices, see Solar Panel Cost in the UK.
What is the VAT rate on solar panels in the UK?
| Period | VAT rate on installing solar panels in homes |
|---|---|
| Before 1 April 2022 | 5% reduced rate, subject to conditions |
| 1 April 2022 to 31 March 2027 | 0% (zero-rated) |
| From 1 April 2027 | 5% reduced rate, unless the government extends the relief |
The zero rate has applied in England, Scotland and Wales since 1 April 2022, and in Northern Ireland since 1 May 2023. It ends on the same date across the UK. Some websites claim the rate will go to 20% after March 2027. That isn’t what the legislation says: it reverts to 5%.
What does the 0% rate cover?
- Solar panels installed on a home, including the installation labour and the materials when the installer supplies them.
- Batteries, which were added to the relief in February 2024. Guidance indicates this includes batteries installed with solar and, in many cases, installed on their own. Confirm with your installer for standalone batteries.
- Other qualifying energy-saving materials, such as heat pumps and insulation, under the same rules.
- Homes and other residential accommodation, including rented homes, where the installer is supplying and fitting the equipment.
What isn’t covered?
- Materials bought without installation. If you buy panels from a retailer or supplier and don’t have them installed by that seller, the sale is standard-rated at 20%, according to HMRC’s guidance.
- Commercial premises, which are generally standard-rated (though VAT-registered businesses can normally reclaim it).
- Items not on the qualifying list. For example, electric vehicle chargers are generally treated as standard-rated, even if some installers quote otherwise. Check with your installer and HMRC.
- Repairs and maintenance aren’t the same as installing new equipment, so check the rate for ongoing servicing.
New-build homes follow different VAT rules for construction, and buildings used for charitable purposes have their own rules, so ask your contractor or check HMRC if that applies to you.
How much is the change worth?
The move is from 0% to 5%, so on the price of the installation it adds 5%:
| Installation price (before VAT) | VAT at 0% | VAT at 5% | Extra cost from April 2027 |
|---|---|---|---|
| £6,000 (a small solar system) | £0 | £300 | £300 |
| £8,000 (a typical 4kW system) | £0 | £400 | £400 |
| £12,000 (solar plus battery) | £0 | £600 | £600 |
That’s a real saving, but it’s much smaller than the "save 20%" claims you may see. It’s also small compared with the cost of choosing the wrong installer or system. Don’t let the deadline rush you into a bad deal. See How to Choose a Solar Installer and How to Compare Solar Quotes and Spot Red Flags.
What if my installation goes past 31 March 2027?
This is the question that matters most if you’re signing in the months before the deadline. VAT depends on the time of supply (the "tax point"). As a general principle, for services the tax point is usually when the work is completed, but it can be earlier if an invoice is issued or a payment is received, and rate changes have their own rules. Practical points:
- A deposit paid before the deadline may not, on its own, lock in 0% for the whole job if the work is completed later, according to some industry guidance. Don’t assume it does.
- The safest approach is for the installation to be completed and invoiced before 1 April 2027, with a comfortable buffer for permits, scaffolding, weather and grid paperwork.
- Delays happen. Ask what the installer will do if the job slips and who bears any VAT increase.
- Get their VAT treatment in writing before you pay a deposit, and check it against HMRC’s guidance.
Contract points to check
- A stated start and completion date, and what happens if the installer misses it.
- A clear statement that the price includes VAT at the rate that applies, and whether it can be increased.
- Whether the installer or you carry the risk of a VAT rate change if their delay causes it.
- The payment schedule: avoid large upfront payments. See How to Choose a Solar Installer.
- MCS certification, which you need to receive export payments: MCS Certification Explained.
Can I buy the panels myself to avoid VAT?
Usually not. The 0% rate applies to the installer’s supply and installation, not to materials bought on their own. If you buy panels separately and have someone else fit them, the purchase is standard-rated, and it may also affect MCS certification and your ability to receive export payments. See Can You Install Solar Panels Yourself?
What about batteries and VAT?
Batteries were added to the zero-rate relief in February 2024 and are covered by the same end date. If you’re adding a battery later, check whether the work will be treated as a qualifying installation and ask your installer to confirm the VAT rate in writing. See Solar Battery Cost in the UK and Do You Need a Solar Battery?
Northern Ireland
The zero rate applies in Northern Ireland from 1 May 2023, and ends on the same date, 31 March 2027. Note that the Smart Export Guarantee doesn’t apply in Northern Ireland. See Smart Export Guarantee: Best Tariffs Compared.
Could the government extend it?
It’s possible. The relief has been widened before (for example, to cover batteries in 2024), and policy can change at a fiscal event. But as of September 2026, the government hadn’t indicated an extension, and some industry groups have called for the zero rate to be made permanent. Plan around the law that exists today, and check the latest position before you sign. If it is extended, you’d benefit anyway; if it isn’t, you’ll have planned for it.
Deadlines and things that change
| What | Date | What to do |
|---|---|---|
| 0% VAT on residential solar and batteries | 31 March 2027 | Returns to 5% from 1 April 2027 unless extended. Get your installer’s VAT treatment in writing. |
| Time of supply (tax point) | Depends on completion, invoicing and payment | Don’t rely on a deposit alone. Aim for completion and invoicing well before the deadline. |
| Government decision on an extension | Unknown | Check the latest position, particularly around Budgets and fiscal events. |
| Quotes | Usually valid for a limited period | Check the expiry date and what VAT rate the quote assumes. |
Common mistakes
- Believing VAT will jump to 20% in April 2027. It’s scheduled to be 5%.
- Assuming a deposit before the deadline guarantees 0% on a job finished later.
- Rushing to sign with the first installer to beat the deadline.
- Buying panels separately and expecting the 0% rate.
- Not asking for the VAT treatment in writing.
- Accepting a quote that doesn’t state the VAT rate.
- Assuming EV chargers or other extras get the same treatment.
Next steps
- Decide whether you can realistically have the installation completed well before 1 April 2027.
- Get several itemised quotes: Solar Panel Cost in the UK.
- Ask each installer how VAT applies and what happens if the job slips.
- Check your export options: Smart Export Guarantee: Best Tariffs Compared.
Where to next:
- 🇬🇧 Solar Grants and Funding Schemes in the UK
- 🇺🇸 Federal Solar Tax Credit Changes
Frequently asked questions
Is there VAT on solar panels in the UK?
Not at the moment. The installation of solar panels and batteries in homes is zero-rated for VAT until 31 March 2027. From 1 April 2027 the reduced rate of 5% is scheduled to apply, unless the government extends the relief.
Will VAT on solar panels go up to 20% after March 2027?
No, it’s scheduled to revert to 5%, not 20%, according to the legislation. Materials bought without installation are already charged at 20%.
When does 0% VAT on solar panels end?
On 31 March 2027. The 5% rate applies from 1 April 2027 unless the relief is extended.
Do I pay the old or new VAT rate if I pay a deposit before the deadline?
It depends on the time of supply rules, and a deposit may not lock in the 0% rate for work completed later. Ask your installer to confirm in writing how VAT will apply to your contract, and check HMRC’s guidance.
Is there VAT on solar batteries?
Batteries were added to the zero-rate relief in February 2024, so installations are currently at 0% until 31 March 2027, then 5%. Confirm the treatment for standalone battery installations with your installer.
Can I avoid VAT by buying solar panels myself?
Generally no. The zero rate applies to supply and installation by a contractor. Materials bought on their own are standard-rated at 20%.