0% VAT on Solar Panels and Batteries, Explained

What the 0% VAT relief is

Certain energy-saving materials installed in residential accommodation are zero-rated for VAT. Solar panels are on that list, and battery storage was added to it. When the relief applies, the VAT rate on the qualifying supply and installation is 0% rather than the standard rate.

The zero rate was introduced on 1 April 2022 and is currently set to run until 31 March 2027. After that date the government has said the rate is due to return to the reduced rate of 5%, unless the policy is changed.

What qualifies

The relief applies to the installation of qualifying energy-saving materials in residential accommodation, such as your home. It covers the materials and the installation work supplied together by the installer.

• Solar panels installed on or in a home
• Battery storage installed in a home, whether alongside new solar panels, added to an existing solar system, or on its own
• The installation work supplied with those materials

Battery storage and retrofits

Batteries were brought within the relief from 1 February 2024, including batteries retrofitted to an existing solar system and batteries installed on their own. Before that date, a battery fitted separately from solar panels could be charged at the standard rate.

That makes this a good time to consider adding storage to an existing solar system. We assess compatibility first, checking the inverter, consumer unit and installation location before recommending a battery retrofit.

What falls outside the relief

The relief is for residential installations. Commercial premises, such as offices and factories, are generally charged at the standard rate. Materials bought on their own, without installation, are also outside the relief, as are separate supplies that are not energy-saving materials.

Home EV chargers are not on the energy-saving materials list, so a charge point is normally charged at the standard rate even when it is fitted at the same time as solar panels and a battery. Your quotation should show the VAT treatment of each item clearly.

How it appears on your quote

You do not need to claim the relief yourself. Your installer applies the correct VAT rate when they quote and invoice. A clear quotation separates the solar and battery elements from anything that carries VAT, so you can see exactly what you are paying.

If one quote appears to include VAT on panels or a battery for your home, ask why. It may be an error, or it may include items that sit outside the relief.

How long the relief runs

The 0% rate is currently scheduled to end on 31 March 2027. Tax policy can change, so if timing matters to you, check the current HMRC guidance or ask us at your survey. Installations need to be completed within the relief period for the 0% rate to apply.