There is no VAT on solar panels for most UK homes right now, because a 0% rate applies to the installation of qualifying energy-saving materials in residential property from 1 April 2022 until 31 March 2027 (GOV.UK, 2026). The relief is set out in VAT Notice 708/6 and covers the whole installed package, not just the panels.
For installers, this is a live selling point and a closing deadline in one. On an 8,000 pound installation, the zero rate saves the customer 1,600 pounds against the 20% standard rate. That saving disappears on 1 April 2027, when the rate reverts to 5%, so the window matters to every quote you write this year and next.
Key Takeaways
- Solar PV installed at a UK home is zero-rated for VAT from 1 April 2022 until 31 March 2027 under VAT Notice 708/6.
- The 0% rate covers supply and installation together, equipment plus labour, for residential accommodation.
- Battery storage is 0% with solar, and standalone or retrofit batteries have qualified since 1 February 2024.
- During the zero-rate window, the old 60% materials test does not apply, so a qualifying job is 0% on the whole invoice.
- From 1 April 2027 the rate returns to a reduced 5%, and the apportionment rules come back with it.
Is there VAT on solar panels in the UK?
In practice, no. Installing solar panels at a home in Great Britain is zero-rated for VAT until 31 March 2027, meaning you charge the customer 0% (GOV.UK, 2026). It is not exempt and it is not out of scope. It is a genuine zero rate, which is why you still record the supply on your VAT return.
The relief sits in law through the Value Added Tax (Installation of Energy-Saving Materials) Order 2023 (legislation.gov.uk). The distinction between zero-rated and exempt matters for you as a supplier: zero-rated supplies let you keep reclaiming input VAT on your own costs, which exempt supplies would not.
What does the 0% VAT rate cover?
The relief covers the supply and installation as a single package, both the equipment and the labour, in residential accommodation (CLA, 2026). So a solar PV job billed as one supply-and-fit price is zero-rated in full, panels, inverter, mounting and fitting alike.
The list of qualifying energy-saving materials was widened in 2024 to add water source heat pumps, electrical battery storage and smart diverters (AccountingWEB, 2024). The relief applies to the installer, whether you work as main contractor or subcontractor, so the whole delivery chain can zero-rate the qualifying work.
How is battery storage treated for VAT?
Batteries are zero-rated when fitted with solar, and since 1 February 2024 a standalone or retrofit battery added to an existing system also qualifies for 0% (GOV.UK, 2026). Before that date, a battery only zero-rated as part of a fresh solar install, which caught out many retrofit quotes.
That change opened a clear market in storage retrofits at 0%, whether AC-coupled or added through a hybrid inverter. The battery, its inverter and the installation labour all fall inside the relief when the work is done at a qualifying residential property.
VAT on solar panels in Northern Ireland
Northern Ireland is covered too. A zero rate applies to the installation of energy-saving materials there from 1 May 2023 until 31 March 2027, bringing it into line with Great Britain (GOV.UK, 2026). The end date is the same across the whole UK, so the deadline message is consistent for every customer.
For an installer working across regions, the practical point is simple. Wherever the qualifying work is done in the UK today, a compliant residential solar or battery install carries 0% VAT. The list below summarises the common scenarios and the rate that applies to each.
Use this as a quick reference when pricing a job before the 2027 change.
- Solar PV install, GB, to 31 Mar 2027: 0% VAT on the full supply-and-fit price.
- Battery fitted with solar: 0% VAT as part of the qualifying installation.
- Standalone or retrofit battery, since 1 Feb 2024: 0% VAT in its own right.
- Northern Ireland ESM install, to 31 Mar 2027: 0% VAT, matching Great Britain.
- Any qualifying ESM install from 1 Apr 2027: reduced rate of 5%.
How to invoice a solar installation at 0% VAT
Invoice the qualifying work as a single supply-and-install line at 0%. During the zero-rate window, neither the social policy conditions nor the old 60% materials test applies, so you do not need to split the value between materials and labour (AccountingWEB, 2024).
Keep the invoice clear that this is a zero-rated supply, not an exempt one, and hold evidence that the property is residential. Sell separate hardware with no installation and you are back to standard-rated goods, so bundle the fit into the sale. Pair the invoice with the MCS installation certificate and the customer has a complete, compliant record.
What happens after 31 March 2027?
From 1 April 2027, installations revert to a reduced VAT rate of 5% rather than 0% (AccountingWEB, 2024). The 60% materials test is expected to return alongside it, so on material-heavy jobs the labour and materials may again need apportioning between rates.
The change is worth flagging to customers now. On a typical domestic install the difference between 0% and 5% is a few hundred pounds, which is a real reason to commission before the deadline. It also shapes how you plan your pipeline, because a rush of pre-deadline work is likely in early 2027.
VAT relief alongside other solar incentives
The 0% rate stacks with other support. It sits beside the Smart Export Guarantee and the wider set of solar panel grants available to households (Solar Energy UK, 2026), so a well-built quote shows the customer the full picture rather than the VAT saving on its own.
Treat VAT as part of the sales story, not just the accounts. Whether a customer chooses in-roof or on-roof panels, the 0% rate applies to the qualifying install, and a costing tool like Reonic can carry the correct rate straight through to the quote so nothing is misstated before 2027.
Frequently asked questions
Do I pay VAT on solar panels in 2026?
No, not on a qualifying residential installation. Solar panels installed at a UK home are zero-rated for VAT until 31 March 2027, so the customer is charged 0% on the supply-and-fit price. The relief covers the equipment and the labour together, provided the work is a genuine installation at a residential property.
Does the 0% VAT include the battery?
Yes. A battery fitted as part of a solar installation is zero-rated, and since 1 February 2024 a standalone or retrofit battery added to an existing system also qualifies for 0%. The battery, its inverter and the installation labour all fall within the relief when the work is done at a qualifying residential property.
When does 0% VAT on solar end?
The zero rate runs until 31 March 2027 across the whole UK. From 1 April 2027, qualifying installations revert to a reduced VAT rate of 5%. On a typical domestic job that is a difference of a few hundred pounds, which is a solid reason to encourage customers to commission before the deadline.
Do I need to split materials and labour on the invoice?
Not during the current window. The old 60% materials test is suspended while the zero rate applies, so a qualifying install is 0% across the whole invoice with no apportionment. That test is expected to return with the 5% rate from April 2027, when material-heavy jobs may again need the value split between rates.
Is there VAT on standalone battery storage?
Not on a qualifying residential install. Since 1 February 2024, standalone and retrofit battery storage is zero-rated in its own right, so a customer adding a battery to an existing solar system pays 0% VAT. Before that date it only qualified as part of a fresh solar installation, which is a common point of confusion on older quotes.
