VAT on solar panels and batteries: the 0% rate explained

Solar panels and batteries supplied and fitted by an installer in your home are zero-rated for VAT until 31 March 2027. From 1 April 2027 the rate is scheduled to rise to 5%, not 20%, unless the government extends the relief. Panels, batteries and plug-in kits bought without installation carry the standard rate of 20%. The relief applies in all four UK nations, and you don't apply for it: the installer simply charges 0%.

VAT rates at a glance

When the 0% rate applies

HMRC's guidance on energy-saving materials sets three conditions.

1. It must be installed. The relief covers installing energy-saving materials, which means fixing them permanently in place, and the equipment supplied by the business that fits it. Equipment sold without fitting is standard-rated: "the sale of energy-saving materials by a retailer is always standard-rated".

2. It must be in residential accommodation. That includes houses and flats, care homes, student accommodation, self-catering holiday lets, park homes and static caravans used as a permanent home, and houseboats used as a main residence. Hotels, hospitals and prisons are excluded. Since 1 February 2024 the relief also covers buildings used solely for a relevant charitable purpose.

3. It must be on HMRC's list. Solar panels are listed, covering photovoltaic (PV) panels with their cabling, control panel and inverter, and solar thermal systems. So are batteries, smart diverters, heat pumps, insulation and wind turbines.

HMRC sets no other conditions for the 0% rate. You don't need a grant, a particular payment method or an MCS-certified installer for the 0% rate, though you do need MCS certification, or an equivalent, to be paid for exported electricity (see our MCS certificate guide).

Batteries: 0% whether new or added later

Since 1 February 2024, a battery installed in your home is zero-rated in three situations:

• fitted at the same time as new solar panels, as part of one job;
• added later to panels you already have ("retrofit");
• a standalone battery that stores electricity from the grid, with no panels at all.

Older articles may say a battery only gets 0% VAT when it is fitted with new panels. That was the position before 1 February 2024, when retrofit and standalone batteries were added to HMRC's list. For prices, see our solar battery cost guide.

What happens on 1 April 2027

The zero rate covers installations supplied up to 31 March 2027. From 1 April 2027, HMRC says, they "will revert to the reduced rate of VAT of 5%". The law that created the zero rate already contains the change, timed to take effect on 1 April 2027. No extension had been announced by 24 September 2026; a Budget could extend or change it.

The date that counts is the VAT "tax point", not the date you sign. HMRC's general rules work like this:

• For work done on site, the basic tax point is normally when the work is finished.
• A payment made before that, such as a deposit, normally fixes the rate for the amount paid; ask the installer to show the rate on the receipt.
• An invoice showing 0% VAT does not fix the rate by itself, because an invoice for a zero-rated supply does not create a tax point.
• When a rate goes up, a business can choose to charge the old rate on work completed before the change, and can choose to split a job that straddles the date between the two rates.

If your installation will be finished close to 31 March 2027, ask the installer in writing which rate they will charge on each payment. Don't let a deadline rush you into signing: 5% on an installed system is still well below the 20% rate on equipment bought without fitting.

Worked example: what 0%, 5% and 20% mean in pounds

This is an illustration, not a quote. The Department for Energy Security and Net Zero (DESNZ) publishes the average cost of solar installations in Great Britain from MCS records. For 2025/26, systems of 4 to 10 kW fitted to existing homes averaged £1,651.40 per kW of panel capacity. That covers the panels, fitting and grid connection, but not a battery. Domestic installations were zero-rated throughout that year, so the average includes no VAT.

For a 5 kWp system at that price:

• At 0% VAT: 5 × £1,651.40 = £8,257
• At 5% VAT: £8,257 × 1.05 = £8,670 (rounded from £8,669.85), or £413 more
• For comparison, at the 20% standard rate, which applies only to equipment bought without installation: £8,257 × 1.20 = £9,908 (rounded from £9,908.40), or £1,651 more

The same arithmetic applies to a battery: 5% adds £50 to every £1,000 of installed price. Your own quote will differ; our solar panel cost guide explains what it should include.

Buying the kit yourself and plug-in solar

• Panels bought online or in a shop: 20% VAT, because a retailer's sale without installation is always standard-rated.
• Your own equipment, fitted by an installer: HMRC says the relief also applies where you employ a business to install materials you bought directly from a retailer. The fitting is zero-rated, but you have already paid 20% on the equipment, so this usually costs more than buying both from the installer.
• Plug-in (balcony) solar: you buy the kit and plug it in yourself, so it carries 20% VAT. See our plug-in solar guide.

Extra work on the same job

HMRC looks at what you are buying as a whole:

• Work done only so the panels can be fitted is normally part of one zero-rated supply. HMRC's example is cutting a loft hatch to fit loft insulation.
• Separate, independent work can carry a different rate. Separate pricing or invoicing, or work done at a different time, points to a separate supply.
• If the materials are part of a bigger standard-rated job, the whole job can be standard-rated. HMRC's example is insulation built into a new extension.

If your quote includes roof repairs or other work, ask how each line is taxed.

Northern Ireland

The same zero rate applies in Northern Ireland, where it has been in force since 1 May 2023. From October 2019 until then, a 5% reduced rate applied there, subject to conditions. The end date and the return to 5% from 1 April 2027 are the same as in Great Britain. The Smart Export Guarantee does not apply in Northern Ireland, but the VAT relief does.

VAT on the electricity you buy is a separate tax

Household electricity normally carries 5% VAT. In Great Britain, it is zero-rated from 1 October 2026 to 31 March 2027. In Northern Ireland it stays at 5%.

It affects what the electricity your panels replace is worth, not what the panels cost. Ofgem's cap for October to December 2026 averages 26.32p per kWh by direct debit in Great Britain, with no VAT. With 5% VAT back and the same underlying rate, that would be 26.32p × 1.05 = 27.64p. The cap changes every quarter; the next is announced on 25 November 2026.

Check your quote

Before you sign

• The quote shows VAT at 0% on the panels, the battery and the fitting.
• The same business supplies and installs the equipment.
• Any separately priced work, such as roof repairs, shows its own VAT rate.
• If completion could fall after 31 March 2027, the installer confirms in writing which rate applies to each payment.
• The deposit is reasonable and part of an agreed payment schedule, and you know how it is protected.

Our grants guide covers the schemes that can pay for panels, and our Warm Homes Plan guide explains the new reduced-rate loans. For an illustrative estimate of output and bill savings in Great Britain, try the calculator.

Frequently asked questions

Is there VAT on solar panels in 2026?

Not if an installer supplies and fits them in your home: the rate is 0% until 31 March 2027. Panels bought without installation carry 20%.

Will VAT on solar panels go back to 20%?

No. Unless the government changes the law, installed panels and batteries move to the 5% reduced rate on 1 April 2027. The 20% standard rate applies only to equipment bought without installation.

Do solar batteries get 0% VAT if I add one later?

Yes. Since 1 February 2024 a battery installed in your home is zero-rated, whether it is added to existing panels or charges from the grid with no panels at all.

Is there VAT on plug-in solar panels?

Yes, 20%. The 0% rate needs the seller to install the equipment, and plug-in kits are sold for you to set up yourself.

Do I need an MCS installer to get 0% VAT?

No. HMRC's conditions are about installation and the type of building, not certification. You will need MCS certification (or an equivalent) to be paid for exported electricity.

Does the 0% rate apply to a holiday let?

Yes, if it is self-catering holiday accommodation, which HMRC lists as residential. Hotels and similar establishments are standard-rated.