VAT on solar panels and batteries

Installation of qualifying energy-saving materials in residential accommodation in Great Britain is zero-rated for VAT from 1 May 2023 to 31 March 2027. Solar panels are within the qualifying list, and electrical storage batteries were added from 1 February 2024. From 1 April 2027 the treatment reverts to the 5% reduced rate. That is the published HMRC position, set out in VAT Notice 708/6. It is a relief on the installation, applied by the installer to the quotation and invoice — there is nothing for a householder to claim back afterwards.

What zero-rated means for you

Zero-rated is not the same as VAT-exempt, though the effect on your invoice looks identical: no VAT is charged on the qualifying supply.

The important practical point is that you do not apply for it. A VAT-registered installer applies the correct rate at the point of quotation. If a quotation shows VAT at the standard rate on a qualifying domestic installation within the relief period, that is a question to ask before you sign, not after.

You should expect the VAT treatment to be stated on the quotation. Ours is. A quotation that gives a single figure with no VAT line makes it impossible to check what has been applied.

The dates matter

Three dates define the current position:

• 1 May 2023 — the zero rate for qualifying energy-saving materials in residential accommodation in Great Britain begins.
• 1 February 2024 — electrical storage batteries are added to the qualifying list.
• 31 March 2027 — the zero rate period ends. From 1 April 2027 the treatment reverts to the 5% reduced rate.

The battery date is the one worth noting if you are looking at older advice online. Guidance written before February 2024 frequently describes storage as outside the relief, which was correct at the time and is now out of date.

What “qualifying energy-saving materials” covers

The relief attaches to a defined list of materials and to their installation. Solar panels and electrical storage batteries are on that list. Other energy-saving materials are too, which is why the same relief comes up in conversations about insulation and heating equipment.

Where it gets less clear-cut is at the edges of a job. A solar installation is rarely only panels. It may involve scaffolding, a consumer unit change, roof repairs found at survey, or an EV charger fitted at the same time. Those elements are not all automatically part of the same qualifying supply, and the correct treatment depends on the facts of the particular contract.

This is not evasiveness. It is why the relief has a notice attached to it rather than a one-line summary, and why an installer should be willing to explain how they have treated each element of your quotation.

Residential accommodation

The relief is for installation in residential accommodation. Commercial premises are a different question, and mixed-use property depends on the facts.

If you are installing on a farm building, a business unit, a property you let, or something that is part-home part-business, do not assume the domestic treatment applies. Take advice from an accountant who can look at the whole picture, including whether input VAT recovery is relevant to you.

After April 2027

The reduced rate of 5% is not a penalty rate — it is still well below the standard rate, and it is where energy-saving materials sat for years before the current relief. Nothing about the change removes the relief; it reduces it.

It is also a published future position rather than a settled fact of nature. Fiscal policy changes. We would not encourage anyone to make a decision on timing purely on the basis of a VAT date, because the difference it makes is small relative to the factors that actually determine whether a system suits your property.

Where to check

VAT Notice 708/6 is the primary source and is kept current by HMRC. If your circumstances are anything other than a straightforward domestic installation on a home you live in, read it, or speak to an accountant.

We state the VAT treatment on every quotation and are happy to explain the reasoning behind it. What we will not do is offer tax advice on complex ownership or letting arrangements — that properly belongs with your accountant.

Any figures you see for the value of the relief on a given system are illustrative industry examples, not Solar Fx figures for your property. Actual generation, savings and payback depend on the property, roof orientation and pitch, shading, system design, your electricity usage and tariff, export rates and future energy prices. Figures shown are estimates and are not guaranteed.