0% VAT on Solar Panels Ends in 2027
Thinking about having solar panels or battery storage installed? With the current 0% VAT rate due to end on 31 March 2027, now could be a good time to start planning your installation.
If you have been considering solar panels for your home but haven’t taken the next step, there is another reason to start looking into your options. The current 0% VAT rate on qualifying energy-saving materials, including solar panels and electrical storage batteries, is due to end on 31 March 2027.
From 1 April 2027, the VAT rate is currently scheduled to return to the reduced rate of 5%. This means homeowners considering a solar PV or battery storage installation could face a higher upfront cost if their installation takes place after the current deadline.
What Is Happening to VAT on Solar Panels?
The UK Government introduced a temporary 0% VAT rate for the installation of qualifying energy-saving materials, including solar panels, in residential properties
The relief was introduced to make energy-saving improvements more affordable and encourage homeowners to invest in renewable energy and improve the efficiency of their properties.
According to HMRC, solar panels and electrical storage batteries currently qualify for the 0% rate when the relevant conditions are met. However, this temporary zero rate is scheduled to run until 31 March 2027. From 1 April 2027, qualifying installations are expected to return to the reduced VAT rate of 5%.
Importantly, this does not mean VAT will return to the standard 20% rate. The current legislation provides for a return to the 5% reduced rate.
What Could This Mean for Homeowners?
The difference between 0% and 5% VAT may sound relatively small, but on a larger solar and battery installation, it can add a noticeable amount to the overall cost.
For example, on a qualifying installation costing £10,000 before VAT:
At 0% VAT: £10,000
At 5% VAT: £10,500
Difference: £500
The actual cost of a solar installation will depend on the size and specification of the system, the property and whether battery storage or other equipment is included.
This is why homeowners who are already considering solar may want to start planning sooner rather than leaving the decision until the last minute.
Why Install Solar Panels?
The potential VAT saving is only one reason to consider solar.
Solar panels allow you to generate renewable electricity at home, reducing your reliance on electricity purchased from the grid. How much you can save depends on factors including the size of your solar PV system, your home’s electricity usage, the amount of electricity your panels generate and when you use energy.
For many households, solar can be particularly useful when combined with battery storage.
If you are considering both solar panels and battery storage, it makes sense to discuss your requirements with us rather than treating the two as completely separate investments.
Don’t Leave Your Solar Installation Until the Last Minute
The current 0% VAT rate is scheduled to end on 31 March 2027. While there may be future changes to government policy, homeowners should not assume that the zero rate will be extended.
In September 2026, the Government confirmed that qualifying energy-saving material installations will revert to the 5% reduced rate after March 2027.
If solar is already on your list of home improvements, now is a good time to start researching your options. Getting a quote early gives you time to consider the right system for your property, understand the potential benefits and arrange installation without relying on a last-minute rush before the VAT deadline.
Get a Quote from Solar Insolation Today
If you’ve been thinking about installing solar panels, don’t put the decision off simply because you’re waiting for the “right time”. At Insolation Solar, we can help you explore your options for solar PV and battery storage and find a system suited to your property and energy requirements.
Contact us today to discuss your solar installation and get a quote.
