Solar Panel VAT: 0% Relief Ends 31 March 2027

Solar panel VAT is 0% for now, but the clock is ticking. The zero rate on solar panels, home batteries and heat pumps in Great Britain ends on 31 March 2027, and from 1 April 2027 the reduced rate of 5% returns. If you have been weighing up a system, the date is worth knowing about.

What is happening to solar panel VAT?

Installations of energy-saving materials in homes across England, Scotland and Wales are currently zero-rated for VAT. According to HMRC’s VAT guidance on energy-saving materials, the zero rate applies up to 31 March 2027, and “from 1 April 2027 onwards these will revert to the reduced rate of VAT of 5%”. The legal basis is the Value Added Tax (Installation of Energy-Saving Materials) Order 2022, which sets the same end date.

That is not a new tax on solar. It is a temporary relief reaching its planned end date. Unless the government announces a change, the rate you pay will simply move from 0% to 5% on installations that fall after the deadline.

Which products does the 0% rate cover?

The HMRC guidance lists solar panels, batteries for storing electricity, heat pumps (ground, water and air source), wind turbines and smart diverters among the qualifying materials, when installed in residential accommodation. In practice, that covers the three things Grant Store fits: solar panels, battery storage and air source heat pumps.

The relief applies to the installation as a whole, so it is not just the equipment itself. It is worth asking any installer to show VAT clearly on your quote, so you can see exactly what you are being charged.

How much more could 5% VAT cost you?

The sum is simple. As a purely illustrative example, on a job priced at £8,000 before VAT, 5% VAT would add £400. On £12,000 it would add £600. These are not Grant Store prices, just arithmetic to show how the rate scales with the size of the system. Larger systems with a battery or heat pump alongside solar would see a bigger absolute difference.

Prices also move for other reasons, including equipment costs, so VAT is only one part of the picture. If you want a feel for what a system might look like on your roof, our solar calculator is a good starting point.

Does the deadline mean you should rush?

No. A good installation matters far more than a fast one, and rushing a decision to chase a date is rarely wise. What the deadline does mean is that it pays to plan backwards. A typical project involves a survey, a design, an order, scheduling and the installation itself, and each stage takes time, particularly as spring approaches and more homeowners look at solar.

One point we cannot answer for you is exactly which date counts for VAT on a given job, because that depends on the specifics of the supply. Do not assume that signing a quote before 31 March 2027 automatically locks in 0%. Check the details with your installer, and read the official HMRC guidance if you want to be certain.

If you are also thinking about storage, our earlier piece on community battery storage and why March 2027 matters covers another part of the picture. And if rising bills are what is pushing you towards solar, see our guide to the October 2026 energy price cap.

What should you do next?

Start by deciding what you want from your home: lower electricity bills, a battery to use more of your own power, or a heat pump to replace an ageing boiler. Then get a clear, itemised quote with VAT shown, and ask how long each stage is likely to take.

Grant Store is MCS-certified and based in Wigan, installing solar, battery storage and air source heat pumps for homeowners across England. Get a free quote for solar, a battery or a heat pump, or call us on 01942 918844.

Written by Gareth Whitehill