0% VAT Renewable Energy

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?

Standard 4kW Solar System
£9,600(with 20% VAT)
£8,000
Save £1,600 with 0% VAT
6kW Solar + Battery
£18,000(with 20% VAT)
£15,000
Save £3,000 with 0% VAT

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

System Cost (Before Grants)£28,000
Less: £7,500 BUS Grant-£7,500
Subtotal£20,500
VAT Saving (0% instead of 20%)-£4,100
You Pay£16,400
Total Savings: £11,600
£7,500 grant + £4,100 VAT saving

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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