VAT on solar panels and batteries
Installing solar or storage in a home is zero-rated for VAT — until 31 March 2027, after which HMRC’s own guidance says it reverts to 5%. Buying the equipment without installation has never qualified, and that catches DIY buyers every year.
Installed: zero-rated. Bought over the counter: 20%. Ends 31 March 2027.
The relief attaches to the installation, not to the equipment. Solar panels, and since February 2024 batteries too, are zero-rated when installed in residential accommodation — reverting to the 5% reduced rate from 1 April 2027 on HMRC’s published position.
The rates, with their dates
HMRC publishes the commencement dates in its own internal manual. Rounded up:
| What | Period | Rate | Where |
|---|---|---|---|
| Solar panels | 1 April 2022 to 30 April 2023 | Zero | Great Britain |
| Solar panels | 1 May 2023 to 31 March 2027 | Zero | UK including Northern Ireland |
| Solar panels | From 1 April 2027 | Reduced, 5% | All UK |
| Electrical storage batteries | 1 February 2024 to 31 March 2027 | Zero | UK including Northern Ireland |
| Electrical storage batteries | From 1 April 2027 | Reduced, 5% | All UK |
What qualifies
The relief applies to installations in residential accommodation, or buildings intended for use solely for a relevant charitable purpose.
Solar. HMRC’s notice covers photovoltaic panels with cabling, control panel and AC/DC inverter — so the inverter and the wiring are inside the relief, not bolted on outside it. It separately covers solar thermal collectors with their pipework, pump, storage cylinder, control panel and heat exchanger.
Batteries. Since 1 February 2024, HMRC’s manual names three qualifying cases:
- retrofitting a battery to store electricity generated by one or more qualifying energy-saving materials
- installing a standalone battery for storing electricity from the grid
- installing a battery that does both
The middle one is the significant change. A battery with no solar attached, charged entirely from the grid, qualifies — which is what makes the arithmetic on a battery without solar worth doing.
Where a battery is installed as part of qualifying energy-saving materials, HMRC’s notice treats it as forming a single supply, subject to the temporary zero rate up to 31 March 2027.
What does not
Thermal and heat batteries are excluded. HMRC’s manual says so directly: batteries that store energy in the form of heat are not included.
Equipment bought without installation is standard-rated. This is the one that catches people, and the notice is unambiguous:
However, if you supply energy-saving materials without installing them your supply will be standard-rated. For example, the sale of energy-saving materials by a retailer is always standard-rated.
If you buy panels, an inverter or a battery from a retailer and fit them yourself, you pay 20% on the hardware. There is no route to reclaim it as a private individual.
A self-install therefore starts 20% behind on materials, against a professional installation that pays nothing on the whole job — labour included. That is a substantial part of the gap people expect to save by doing it themselves, and it is worth putting into the comparison before deciding.
It also interacts with MCS certification: without an MCS certificate there is no route onto most export tariffs.
How this should appear on a quote
A quote for an installation in a home should show the zero rate applied to the whole supply — equipment and labour together — not VAT charged on materials and relieved on labour, and not 5%.
If a quote shows 20% on any part of a domestic installation, ask why before you sign. There may be a legitimate reason — non-qualifying work bundled into the same job, or premises that are not residential accommodation — but it should be explained rather than assumed.
If a quote shows 5% today, that is the pre-2022 treatment and it is out of date.
More on reading the rest of a quote: what is in a quote and hidden costs.
Does the zero rate change what solar costs?
Not as much as you would think, because it has been in place since 2022 and our installed cost figures already reflect a market operating under it. The relief is worth having, and it is not a discount that appeared on top of the prices being quoted — it is baked into them.
The date that matters is the forward one. On HMRC’s published position, an installation completed on 1 April 2027 attracts 5% where one completed on 31 March 2027 attracts nothing. On a typical domestic job that is a real sum, and it is the kind of deadline that installers will start mentioning in their marketing long before it arrives.
We would treat “get it done before the VAT goes up” as a reason to plan, not a reason to rush a decision you would otherwise take slowly — and we would check the notice ourselves rather than take a salesperson’s word for the date.
On 31 March 2027 a second VAT relief expires: the temporary zero rate on domestic electricity in Great Britain, in force since 1 October 2026.
The two pull in opposite directions for a solar buyer. Installation gets dearer, and so does the electricity the installation displaces — which makes the solar worth more. They partly offset, and they do not cancel, because the import price compounds over twenty-five years while the installation cost is paid once.
Sources
- Energy-saving materials and heating equipment (VAT Notice 708/6) Last updated 31 January 2024.
- VENSAV3061 — Energy-saving materials: electrical storage batteries HMRC internal manual, last updated 16 May 2024. The three qualifying battery installations and the thermal battery exclusion.
- VENSAV2083 — VAT rates applying to qualifying energy-saving materials with commencement dates HMRC internal manual, last updated 16 May 2024. The commencement date table these figures come from.
Contains public sector information licensed under the Open Government Licence v3.0.
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