As of mid 2025, 1.8 million UK homes are generating clean energy, potentially saving heaps on electricity bills and reducing carbon footprints. And thanks to a VAT rate drop to 0%, solar installations have never been more affordable, so long as it's before 31 March 2027.

Let's demystify the questions you're Googling around solar and VAT.

What's the deal on solar VAT?
If you're installing new solar panels (PV or thermal) on a residential property, both supply and installation are zero rated VAT until 31 March 2027.

Batteries, does the same apply?
Yes, batteries installed with panels have been VAT free since April 2022, and that relief now includes standalone or retrofitted battery systems as of February 2024.

What are the catch points?

• DIY? No VAT relief, must be handled by a certified installer.
• Materials and install from separate providers? Only the install qualifies for 0% VAT, materials don't.
• Second hand panels? Standard VAT applies.
• Commercial installs? Nope, 20%. Businesses may reclaim, if VAT registered.

What happens after 2027?
From 1 April 2027, VAT rises to a reduced rate of 5% for these installations.

Other goodies on 0% VAT?
Beyond solar and batteries, heat pumps, insulation, diverters, wind and water turbines, micro CHP, wood boilers, all green kit included.

Money Matters, How much can you save?
A typical 3.5 kWp system runs around £10,800 under the old 20% VAT, but only £9,000 at 0%. That's £1,800 saved right off the bat, with real payback often within 6 to 15 years.

Pro Tips for Installers and Homeowners

• Always pick an MCS/VAT registered installer
• Bundle both equipment and installation with the same provider
• Prioritise installs before 31 March 2027
• Highlight to clients that maintenance and repairs revert to 20% VAT later

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