VAT on Solar Panels in 2026: 0% Now, 5% From April 2027

Zero VAT on home solar, one deadline and a few traps on the invoice

The VAT line on a solar quote tells you more about the installer than the panel brand does. Homes pay 0% VAT on solar panels and batteries fitted by an installer until 31 March 2027, then 5% from 1 April 2027. A handful of purchases still carry the full 20%, and those are where people get caught out. Here is what qualifies, what the deadline costs in pounds, what happens when an install straddles 1 April, and how to check a quote line by line.

What’s zero-rated, and what still costs 20%

Anything an installer supplies and fits to get solar working on your home is zero-rated. HMRC defines solar panels as PV panels with their cabling, control panel and inverter, and solar thermal collectors with their pipework, pump and cylinder. Work that only exists to get them on the roof, such as scaffolding, roof hooks and wiring, is part of the same single supply and gets the same rate.

The relief attaches to the act of installing an energy-saving product in a qualifying building. Take away the installation, or take away the energy-saving product, and you’re back at 20%.

Batteries count, EV chargers don’t

A battery fitted alongside new panels has been zero-rated since April 2022. Since 1 February 2024, a battery added to an existing system and a standalone battery with no panels at all qualify in their own right. EV chargers aren’t on HMRC’s list of energy-saving materials, even the ones that divert surplus solar into your car, so if your quote bundles panels, a battery and a charger, the charger should sit on its own line at 20%.

Extras added later lose the relief

Bird mesh fitted on install day is part of the solar job; the same mesh two years later is a standalone job at 20%, and so is a replacement inverter after a fault. Roof repairs priced separately before the install are standard-rated too. If a full re-roof is the main job and in-roof solar is part of it, ask how the installer has split the VAT, because the roofing element may not qualify.

What 0% VAT saves on a typical system

On an average 4kW system the zero rate is worth about £355 against next April’s 5%, and £1,420 against the full 20%. The government’s 2025/26 median for MCS-certified installs was £1,780 per kW, putting a 4kW system at roughly £7,100. All of it assumes the installer’s price before VAT stays put, which is the part nobody can promise.

For a full breakdown of what sits inside those totals, see our guide to how much solar panels cost and our solar battery costs guide.

0% ends on 31 March 2027 unless the government extends it

The zero rate is written into law to end on 31 March 2027, after which home installations move to 5%. The old conditions don’t return with it: between 2019 and 2022 you only got 5% if you were over 60, on certain benefits, or the materials made up no more than 60% of the job, and HMRC has confirmed those were removed permanently.

As of September 2026, no extension has been announced. When the relief was widened in 2023 the government kept the option to extend before 2027 once it had better data, and in July 2026 almost 40 organisations wrote to the Prime Minister and Chancellor asking for a decision. The Autumn Budget on 28 October 2026 is the next obvious point for one.

Plan on the published date. If an extension comes, booking early has cost you nothing; if it doesn’t, a job pencilled in for late March that slips a fortnight lands in the 5% period. Spring is also when installers get busy, which our guide to the best time of year to buy solar panels covers in more detail.

Installs that straddle 1 April 2027

The rate is set by the tax point, which for a solar job is normally the day the work is finished, not the day you signed. An invoice issued before completion, or a payment made before it, creates an earlier tax point, but only for the amount it covers.

So: you book a £7,100 install in January 2027 and pay a 25% deposit of £1,775. A wet March pushes scaffolding back to 12 April. The deposit carries 0%; the £5,325 balance falls after 1 April and carries 5%, which is £266. Your bill goes up by £266 rather than £355.

The opposite case: the job finishes on 29 March and the invoice follows on 5 April, which would normally set the tax point in the 5% period. HMRC lets the installer use the rate that applied at completion instead, so ask for 0% in writing if your install finishes before the deadline but the paperwork doesn’t.

Buying kit yourself costs you the full 20%

Retailers must charge 20% on panels, inverters and batteries sold without installation, and you can’t reclaim it. On £1,800 of hardware for a 4kW system, £300 is tax an installer would never have paid, because a fitter buys the same kit VAT-free and zero-rates the whole job. That’s before the lost export income: without MCS certification you can’t claim Smart Export Guarantee payments, which our SEG calculator can put a number on.

Labour on kit you’ve bought is still 0%

If you buy panels yourself and pay an installer to fit them, HMRC’s notice says the installation service is zero-rated. You’ll see claims that the labour carries 5%; that isn’t what the guidance says. Many MCS installers won’t certify a system they didn’t supply, though.

Plug-in solar pays 20%

Plug-in (balcony) kits up to 800W became legal to sell and plug in yourself in Great Britain on 27 August 2026. You plug them in rather than having them installed, so there’s nothing for the relief to attach to: on a £450 kit, £75 is VAT. Most can’t earn export payments yet either, so the maths rests on the electricity you use as it’s generated.

Installers who aren’t VAT-registered

A business turning over less than £90,000 a year doesn’t have to register, and charges you no VAT at all, which looks identical to 0%. It isn’t. An unregistered firm pays 20% on the kit it buys and can’t reclaim it, so on £6,000 of equipment, £1,000 of irrecoverable tax is already inside its price. A registered installer reclaims that and zero-rates your invoice. Neither is doing anything wrong: compare the totals rather than the VAT line.

Landlords, holiday lets and charities qualify; businesses don’t

The relief follows the building, not who owns it. HMRC’s definition of residential accommodation is broad and, since February 2024, includes charity buildings used non-commercially. Hotels and inns are excluded by name, along with offices, shops and other commercial premises.

If you let property, our landlord solar ROI calculator shows how the numbers work. Charities and places of worship can find more in our guides to solar panels for churches and care homes.

For businesses, 20% is usually cash flow, not cost

A VAT-registered business reclaims the 20% on its next return, so the real cost is a few weeks of cash. It hurts only below the £90,000 threshold, or where sales are VAT-exempt and the tax can’t be recovered. Farms often get both treatments on one site: panels on the farmhouse are zero-rated, panels on the barn are standard-rated, with the barn VAT usually reclaimable. The bigger lever for businesses is capital allowances, and our commercial solar costs guide covers pricing.

0% VAT on electricity trims solar savings by about £22 a year

From 1 October 2026 to 31 March 2027, household electricity in Great Britain carries no VAT, which makes every unit your panels save you slightly less valuable. It doesn’t touch your install price or your export payments.

Ofgem’s capped rate from 1 October is 26.32p per kWh with no VAT, against about 27.64p with 5% on it, so each unit you use at home is worth roughly 1.3p less while the cut lasts. A typical 4kW system makes around 3,400 kWh a year; use half in the house and that’s 1,700 kWh replaced, or about £22 off a year’s savings.

Your install date matters about 16 times more than the electricity cut does. The cut also doesn’t apply in Northern Ireland, where the government is funding equivalent support instead, though the solar zero rate does. To push more generation into the house, read our guide to time-of-use tariffs with solar.

How to check the VAT on your solar quote

A quote from a VAT-registered installer should show 0% on every line that’s part of the installation, and call it zero-rated. Four checks cover the usual mistakes.

Once the VAT is right, our solar panel quote checker tests whether the price itself is fair, and our list of hidden solar costs covers the extras quotes tend to leave out.

VAT on solar panels: common questions