The 0% VAT rate on solar panel installation, battery storage, and related labour expires on 31 March 2027. After that date, the rate is expected to return to at least 5% — and possibly 20%.
On a typical 4kW solar system costing £7,500 (2026 price), that means an extra £375 at 5% VAT — or £1,500 at the standard 20% rate. That is money added to your bill for the exact same system, the exact same panels, the exact same installation.
If you have been considering solar panels or battery storage, 2026 is the year to act. Here is why.
What the 0% VAT Rate Covers
Since April 2022, the UK government has applied a 0% VAT rate to the supply and installation of energy-saving materials on residential properties. That includes:
- Solar PV panels — any size residential system
- Battery storage — new installations and retrofits to existing solar
- EV chargers — when installed alongside solar or as a standalone home charger
- Heat pumps — air source and ground source
- Insulation — wall, loft, and floor
The relief covers both the equipment and the labour. Your installer applies it automatically — there is no application form, no claim process, and no approval delay. It simply comes off the invoice.
How Much You Save by Installing Now
Here is what the numbers look like for the most common systems we install across Milton Keynes:
Get a personalised estimate based on your roof and electricity usage.
Try Our Free Solar Calculator| System | Cost Today (0% VAT) | Cost at 5% VAT | Cost at 20% VAT |
|---|---|---|---|
| 4kW solar (10 panels) | £7,500 | £7,875 | £9,000 |
| Solar + battery package | £12,000 | £12,600 | £14,400 |
| Battery storage retrofit | £4,500 – £7,500 | £4,725 – £7,875 | £5,400 – £9,000 |
| 6kW solar + battery | £13,000 – £16,000 | £13,650 – £16,800 | £15,600 – £19,200 |
On a solar and battery package at £12,000, you save £600 compared to 5% VAT — or £2,400 compared to the standard rate. That is a significant chunk of the payback period wiped out before you even switch the system on.
Take advantage of 0% VAT while it lasts
View our packages and get a free, no-obligation quote for your home.
Solar Panel Installation Solar + Battery PackagesThe Installation Timeline — Why You Need to Act Soon
Solar panel installation is not next-day delivery. Here is the typical timeline from first contact to a working system on your roof:
To guarantee 0% VAT, get your quote by January 2027 at the latest. Installation timelines of 4–12 weeks mean leaving it later risks missing the deadline.
- Week 1–2: Initial enquiry, site survey, and quote
- Week 2–3: Quote accepted, deposit paid, equipment ordered
- Week 4–6: Scaffolding erected, panels and inverter installed
- Week 6–8: Electrical commissioning, DNO notification, MCS certificate issued
That is 4–8 weeks from enquiry to completion. During busy periods — spring and summer especially — it can stretch to 10–12 weeks.
To guarantee your installation completes before 31 March 2027, you need to get your quote by January 2027 at the latest. Leaving it later than that risks your installation falling after the deadline, meaning you pay more for the same system.
How the VAT Saving Stacks with Other Incentives
The 0% VAT rate is not the only financial incentive available. It works alongside several other schemes:
Smart Export Guarantee (SEG) — Your energy supplier pays you for surplus electricity you export to the grid. Rates vary by supplier, but most homes earn £80–£170 per year. You need an MCS certificate to register — we issue one with every installation.
ECO4 Scheme — If you are on certain benefits or have a low household income, you may qualify for free or heavily subsidised solar panels and insulation under the ECO4 scheme. This is separate from the VAT relief and can be combined with it.
Electricity bill savings — A typical 4kW system saves £600–£900 per year on electricity bills at current rates (24.5p/kWh grid price, Q2 2026). Add a battery and self-consumption rises from 50% to 70%+, pushing annual savings above £1,000 – £1,200.
See our full grants and incentives guide for everything that is currently available.
Install Now vs Wait — The Real Cost
Here is a direct comparison for a typical 4kW solar system with a 5kWh battery:
At 20% VAT, waiting costs £3,400 — £2,400 in extra VAT plus £1,000 in missed annual savings. Every month you delay is money lost.
| Install in 2026 | Install April 2027 (5% VAT) | Install April 2027 (20% VAT) | |
|---|---|---|---|
| System cost | £12,000 | £12,600 | £14,400 |
| Extra cost vs today | — | +£600 | +£2,400 |
| Annual savings (bills + SEG) | £1,000 | £1,000 | £1,000 |
| Payback period | 12 years | 12.6 years | 14.4 years |
| Missed savings (waiting 1 year) | — | £1,000 | £1,000 |
Waiting costs you twice. You pay more for the system and you miss a full year of savings. At 20% VAT, that is £3,400 worse off — £2,400 in extra VAT plus £1,000 in savings you never collected.
What Happens After March 2027?
The government has not confirmed what the VAT rate will be after 31 March 2027. The two most likely scenarios:
Speak to our team about installation timelines and availability.
Get in Touch- 5% VAT — This was the rate before April 2022 for energy-saving materials. A return to 5% is the most commonly expected outcome.
- 20% VAT — If the government does not specifically extend or set a reduced rate, the standard 20% rate would apply. This is less likely but not impossible.
Either way, you will pay more. The only question is how much more.
Who Qualifies for 0% VAT?
The relief applies to residential properties in the UK. That covers owner-occupied homes, buy-to-let properties, new builds, and housing association properties.
The 0% VAT relief applies automatically to all residential properties. No application form, no claim process — your installer simply applies it to the invoice.
It does not apply to commercial premises. If you are a business looking at solar, you pay 20% VAT — but you can reclaim it through your VAT return. See our commercial solar page for business-specific information.
Get Your Free Quote Before the Deadline
The window is open now. Every month you wait is a month of savings you do not collect — and the closer you get to March 2027, the busier installers will be.
Use our free online quote tool to see what a system costs for your property. Every price already includes 0% VAT. What you see is what you pay.
We are based in Milton Keynes and cover all of Buckinghamshire, Bedfordshire, and Northamptonshire. MCS & NAPIT certified. Fixed-price quotes with no surprises.
Hope that makes sense. Give us a call if you want to discuss it further.