Solar Glossary

VAT on Solar Panels

In the UK, solar panel installations are currently zero-rated for VAT (0%), saving homeowners up to £1,500 or more compared to the standard 20% VAT rate.

VAT on Solar Panels explained

Since April 2022, the UK government has applied a 0% VAT rate to residential solar panel installations, batteries, and heat pumps. This was extended in 2023 to apply throughout Great Britain until at least 2027, after which the rate may revert to 5%.

The saving is significant: on a £10,000 solar and battery installation, 0% VAT saves you £2,000 compared to the standard 20% rate, or £500 compared to the former 5% reduced rate.

What qualifies for 0% VAT:

  • Solar PV panels
  • Battery storage systems installed at the same time as solar (or later)
  • Installation labour
  • Scaffolding and access costs
  • Inverters and associated electrical equipment

Important: the 0% rate applies to the supply and installation together. Panels purchased separately (e.g. DIY) are still subject to 20% VAT. The 0% rate only applies when installed by a VAT-registered business.

The 0% VAT relief is automatic — your installer should not be charging you VAT on qualifying residential solar installations. If a quote includes VAT, query it immediately. This relief does not apply to commercial or business installations, which remain at 20% VAT.

How this affects your solar decision

0% VAT directly reduces your upfront installation cost, improving your payback period. Use the Solar Cost Calculator to see your total cost including the VAT saving.

Calculate your installation cost with 0% VAT appliedSolar Cost Calculator

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