Since April 2022, the UK government has applied a 0% VAT rate to solar panel installations on residential properties. That means no VAT on the equipment, no VAT on the labour, and no paperwork for you to fill in.
It is one of the biggest incentives available for homeowners going solar right now. On a typical installation, it saves £1,000–£2,000. And it applies to more than just solar panels.
What Qualifies for 0% VAT
The zero rate applies to the supply and installation of the following energy-saving materials on residential properties:
- Solar panels (photovoltaic systems)
- Battery storage systems (including retrofits to existing solar)
- Heat pumps (air source and ground source)
- EV chargers (home wallbox installations)
- Insulation (wall, loft, and floor)
- Heating controls (smart thermostats and similar)
The relief covers both the materials and the labour. Your installer applies it automatically. There is no application, no claim form, and no approval process. It simply comes off the invoice.
How the 0% VAT Relief Actually Works
This is a genuine tax relief written into UK VAT law — not a discount your installer chooses to offer. Since 1 April 2022, the supply and installation of qualifying energy-saving materials in residential properties has been zero-rated for VAT in Great Britain (Northern Ireland followed from 1 May 2023). It sits under HMRC’s VAT Notice 708/6.
In practice, that means three things for you:
- It is automatic. There is no form to complete and nothing to claim back — a VAT-registered installer simply invoices you at 0% VAT.
- It covers labour and materials. The zero rate applies to the whole installed price — panels, inverter, battery, cabling and the labour to fit it — not just the hardware.
- It is time-limited. The relief is legislated to run until 31 March 2027, after which it is set to revert to 5%.
How Much Do You Actually Save
Before this relief, solar installations carried 5% VAT (the reduced rate for energy-saving materials). Now it is 0%. The saving depends on the size of your installation.
Some real examples based on typical systems we install across Milton Keynes:
- 10-panel solar system (£5,500): VAT saving of £275 compared to the old 5% rate, or £1,100 compared to the standard 20% rate
- Solar + battery package (£9,000): VAT saving of £450 at 5%, or £1,800 at 20%
- Battery storage retrofit (£4,500): VAT saving of £225 at 5%, or £900 at 20%
- EV charger (£950): VAT saving of £48 at 5%, or £190 at 20%
These are not small numbers. On a full solar and battery package, the 0% VAT rate saves you close to £2,000 compared to what it would cost at the standard rate.
Here is how the three VAT rates compare on typical system prices:
| System | At 20% VAT | At 5% VAT | At 0% VAT (now) |
|---|---|---|---|
| 10-panel solar (£5,500) | +£1,100 | +£275 | £0 |
| Solar + battery (£9,000) | +£1,800 | +£450 | £0 |
| Battery retrofit (£4,500) | +£900 | +£225 | £0 |
| EV charger (£950) | +£190 | +£48 | £0 |
How Long Does It Last
The 0% VAT rate was originally introduced in April 2022 and is confirmed until at least 31 March 2027. After that, the rate is expected to return to 5% for energy-saving materials.
There has been no indication the government plans to extend it beyond 2027, though that could change. What we do know is that the window is open now and guaranteed for another year.
If you have been thinking about solar panels, battery storage, or an EV charger, the VAT saving is a strong reason to act before March 2027. Once it reverts to 5% (or potentially 20%), every quote goes up accordingly.
The 0% VAT rate is confirmed until 31 March 2027. After that, prices go up. If you have been considering solar, this is the window to lock in the saving.
We have a dedicated guide on why 2026 is the last full year to get 0% VAT on solar and battery storage — including what installing now versus waiting actually costs once the rate goes back up.
The 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 (26.11p/kWh grid price, Q3 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
The 0% rate applies to residential properties in the UK. That means:
- Owner-occupied houses and flats
- Buy-to-let properties (if the property is residential)
- New builds (if the solar is installed after the property is complete)
- Listed buildings and conservation area properties
- Housing association properties
There are a few cases where 0% VAT does not apply:
- Commercial properties — offices, shops, warehouses, and industrial buildings pay the standard 20% VAT rate
- Mixed-use properties — if a building is partly residential and partly commercial, only the residential portion qualifies
- DIY installations — the relief only applies when a VAT-registered installer supplies and fits the equipment. Buying panels online and fitting them yourself does not qualify.
See how much you would save with 0% VAT on your installation.
Get Your Free QuoteDoes Your Installer Need to Be VAT-Registered
Yes. The 0% rate is a VAT relief, which means it only works when the installer is VAT-registered and charges VAT on their invoices.
If your installer is not VAT-registered (i.e. they turnover less than the £90,000 VAT threshold), they do not charge VAT at all — but they also cannot reclaim VAT on the equipment they buy. This often means their prices are similar or even higher than a VAT-registered installer who applies the 0% rate.
At Depth of Light, we are VAT-registered and apply the 0% rate automatically. Every quote we provide is the final price — no hidden VAT to add on top.
Does It Apply to Battery Storage on Its Own
Yes. This is a common question. Prior to the 2022 changes, battery storage only qualified for the reduced VAT rate if installed at the same time as solar panels. Batteries added later (retrofits) did not qualify.
That restriction has been removed. Battery storage qualifies for 0% VAT whether it is installed alongside solar panels or added to an existing system.
This makes retrofitting a battery much more affordable. If you had solar panels installed a few years ago and now want to add storage, the full cost of the battery and installation is zero-rated.
Battery storage qualifies for 0% VAT whether installed alongside solar panels or added to an existing system. No restriction on timing.
What About the Smart Export Guarantee
The Smart Export Guarantee (SEG) is a separate scheme — not related to VAT. Under the SEG, your energy supplier pays you for surplus electricity you export to the grid. Flat rates run from around 4p up to 15p per kWh, and time-of-use tariffs like Octopus Flux pay up to 30p at peak.
The SEG and the 0% VAT relief work together. You get the VAT saving on your installation, and then you earn ongoing income from surplus generation. Combined with the savings on your electricity bills (avoiding the roughly 26.11p/kWh grid rate), solar panels typically pay for themselves in 5–7 years.
Common Questions
Do I need to apply for the 0% VAT rate?
No. Your installer applies it automatically on the invoice. There is no form, no claim, and no approval.
Can I get a VAT refund on a system already installed?
No. The relief applies at the point of sale. If you had solar installed before April 2022 at the 5% rate, you cannot reclaim the difference retrospectively.
Does it apply to replacement panels or inverters?
Yes. If you are replacing or upgrading components on an existing system, the supply and installation of those components qualifies for 0% VAT as long as the property is residential.
What about solar carports or ground-mounted systems?
Yes, as long as they serve a residential property. The panels do not need to be roof-mounted.
Is this the same as a government grant?
No. The 0% VAT rate is a tax relief, not a grant. You do not receive money — you simply pay less. It is separate from other schemes like the ECO4 grant or the OZEV EV charger grant.
Lock in the 0% VAT rate before March 2027.
Request a Free SurveyYour installer applies the 0% rate automatically on the invoice. There is no form, no claim, and no approval process.
How This Affects the Payback Period
The 0% VAT rate directly reduces the upfront cost of going solar. That shortens the payback period — the time it takes for your energy savings to cover the cost of the installation.
For a typical 10-panel system in Milton Keynes:
- System cost (0% VAT): £5,500
- Annual savings (electricity bills + SEG export): £800–£1,100
- Payback period: 5–7 years
- System lifespan: 25–30 years
After the payback period, every penny saved is pure return. With electricity prices unlikely to come down significantly, the long-term value is substantial.
What to Do Next
The 0% VAT rate is confirmed until March 2027. If you are considering solar panels, battery storage, or an EV charger for your home, now is the time to lock in the saving.
Use our free online quote tool to see what a system would cost for your property. Every price we quote already includes the 0% VAT rate — what you see is what you pay.
Based in Milton Keynes and covering all of Buckinghamshire. MCS & NAPIT certified. Fixed-price quotes with no surprises.