0% VAT on Solar Panels: Save 20% Until March 2027
The UK government reduced VAT on residential renewable energy installations to 0% until 31 March 2027. This applies to solar panels, battery storage, heat pumps, and all installation costs—saving you 20% on your total project cost.
How Much Can You Save?
What Qualifies for 0% VAT?
The 0% VAT rate applies to energy-saving materials installed in residential properties. This includes:
- Solar panel systems: Panels, inverters, mounting equipment, and installation labor
- Battery storage: All residential battery systems including Sigenergy, Solax, and others
- Heat pumps: Air source, ground source, and hybrid heat pump systems
- Installation costs: All labor, scaffolding, electrical work, and commissioning
- Associated materials: Cabling, isolators, consumer unit upgrades, and related equipment
Eligibility Requirements
You Qualify If:
- The property is used as a dwelling (residential property)
- The installation is performed by a VAT-registered installer
- The property is existing (not a new build under construction)
- Installation is completed before 31 March 2027
Does NOT Apply To:
- New build properties: Buildings under construction do not qualify
- Commercial properties: Offices, shops, warehouses pay standard 20% VAT
- Holiday lets: Properties not used as main or sole residences
- DIY installations: Homeowner purchases of equipment only (must be installer-supplied)
Timeline & Deadlines
The 0% VAT rate began on 1 April 2022 and is currently scheduled to end on 31 March 2027:
Important Deadline
To benefit from 0% VAT, your renewable energy installation must be completed and invoiced before 31 March 2027. After this date, installations will be subject to the standard 20% VAT rate unless the government extends the relief period.
The government has not announced plans to extend the 0% VAT rate beyond March 2027. Given typical installation lead times of 6-12 weeks, we recommend booking your survey and quote well in advance to secure 0% VAT pricing.
Combining With Other Support
The 0% VAT benefit can be combined with all other government grants and schemes:
0% VAT + ECO4 Scheme
Eligible households receive free or subsidized installations through ECO4, and the 0% VAT rate applies to any remaining costs not covered by ECO4 funding.
0% VAT + Boiler Upgrade Scheme
The £7,500 BUS grant for heat pumps is applied before VAT calculation. You receive both the £7,500 grant AND 0% VAT on the remaining balance—maximizing your savings.
0% VAT + Smart Export Guarantee
Save 20% on your installation with 0% VAT, then earn ongoing income from SEG payments for excess electricity exported to the grid.
Real Example: Maximum Savings
6kW Solar + 10kWh Battery + Heat Pump Installation
Lock In 0% VAT Before March 2027
With the 0% VAT rate ending 31 March 2027 and typical installation lead times of 6-12 weeks, now is the time to secure your renewable energy system. All YEERS quotes automatically include 0% VAT where applicable.
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Quick answer: You pay 0% VAT on solar panels installed at a UK home until 31 March 2027 under HMRC VAT Notice 708/6. From 1 April 2027 the rate rises to 5%. The relief covers supply-and-install of solar PV, battery storage and heat pumps for residential properties.
What qualifies for 0% VAT?
The zero rate is wider than most homeowners realise. It applies to the full installed package — equipment plus labour — not just the hardware. A standalone battery added to an existing system now qualifies too, following the rule change on 1 February 2024.
| Measure | VAT rate (to 31 Mar 2027) | Notes |
|---|---|---|
| Solar PV (panels + inverter, installed) | 0% | Supply-and-install for residential |
| Battery storage fitted with solar | 0% | Part of the same install |
| Standalone battery (retrofit) | 0% | Since 1 Feb 2024 — added to an existing system |
| Air-source / ground-source heat pumps | 0% | Stackable with the £7,500 Boiler Upgrade Scheme grant |
| Repairs to existing panels (parts only) | 20% | Not a new qualifying installation |
The VAT deadline timeline
Be careful: many competitor pages quote 31 January 2027. That is wrong. HMRC's actual sunset date is 31 March 2027.
- 1 Feb 2024 — standalone batteries added to the 0% relief.
- Now to 31 March 2027 — 0% VAT on qualifying solar, battery and heat-pump installs.
- 1 April 2027 — rate reverts to 5% (still well below the 20% standard rate).
On a typical 4kW system costing £6,200–£8,200 installed, the 0% rate is already baked into the price you're quoted — so booking your solar panel installation before the deadline locks in the saving versus the 5% that follows.
Edge cases worth knowing
- New-build homes — solar is often already zero-rated via a different route (VAT Notice 708 on construction of a new dwelling), not 708/6. The end customer pays no VAT either way.
- Mixed-use buildings — where a property is part-commercial (e.g. a flat above a shop), only the residential portion qualifies; the installer apportions the VAT.
- Repairs and spare parts — replacing a failed inverter or odd panel as a standalone repair is standard-rated at 20%, because it isn't a qualifying new installation.
- Adding storage later — a retrofit battery storage install at an existing home is 0% in its own right, so you don't lose the relief by phasing your project.
YEERS is an MCS-certified installer serving Hull, East Yorkshire, North Yorkshire and Lincolnshire, and applies the 0% VAT relief automatically to every qualifying quote. Source: HMRC VAT Notice 708/6 (gov.uk).
Frequently asked questions
When does 0% VAT on solar panels end?
The 0% VAT relief on residential solar panel installations runs until 31 March 2027 under HMRC VAT Notice 708/6. From 1 April 2027 the rate rises to 5%. Several rival sites wrongly quote 31 January 2027 — the correct HMRC sunset date is 31 March 2027.
Do I pay VAT on solar panels in the UK in 2026?
No. Domestic solar PV installed by an installer is zero-rated for VAT until 31 March 2027, so you pay 0% on the supply-and-install package. The relief is applied automatically — you should never see VAT added to a qualifying residential quote.
Is battery storage included in the 0% VAT?
Yes. Battery storage fitted alongside solar is 0%, and since 1 February 2024 standalone batteries retrofitted to an existing system also qualify for 0% VAT. This means you can phase your project and add storage later without losing the relief.
Are heat pumps covered by 0% VAT too?
Yes. Air-source and ground-source heat pumps installed at a home are zero-rated for VAT until 31 March 2027. They can also be combined with the £7,500 Boiler Upgrade Scheme grant, which an MCS-certified installer claims on your behalf.
Why do some websites say the 0% VAT deadline is 31 January 2027?
That date is incorrect. The genuine HMRC deadline in VAT Notice 708/6 is 31 March 2027, after which the rate becomes 5% on 1 April 2027. Always check the gov.uk VAT Notice rather than relying on a competitor's figure.
Does 0% VAT apply to solar panel repairs?
No. Standalone repairs and replacement parts — such as swapping a failed inverter on an existing system — are standard-rated at 20% VAT, because they are not a qualifying new installation. The 0% rate applies to the installation of energy-saving materials, not maintenance.
Do new-build homes get 0% VAT on solar?
Effectively yes, but via a different route. Solar fitted during the construction of a new dwelling is usually zero-rated under VAT Notice 708 (new-build construction) rather than 708/6 (retrofit energy-saving materials). Either way, the homeowner pays no VAT on the system.
Last updated June 2026.
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