VAT on solar panels and batteries: 0% until 31 March 2027

Solar panels and home batteries currently carry 0% VAT when you have them installed, since a time-limited relief applies. The relief runs from 1 May 2023 to 31 March 2027. From 1 April 2027, current rules put the rate at 5%. So the date your installation happens matters, and it is worth checking on your quote.

What HMRC actually says

The rule comes from HMRC VAT Notice 708/6. It covers energy-saving materials, because solar panels are on the list. HMRC says a zero rate applies to the installation of these materials from 1 May 2023 to 31 March 2027.

The same notice says that from 1 April 2027 these will revert to the reduced rate of 5%. That is the law as it stands today. However, a future government could change it, although no change is on the table.

Note the word “installation”. The relief covers a fitted system, not a pallet of panels left in a garage. Therefore, if your plans are unusual, ask the installer how VAT applies.

Batteries get the same relief

Many people think only the panels qualify. However, HMRC includes battery storage as well. It names the installation of a standalone battery for storing electricity from the grid.

This also covers adding a battery to a system you already own. Because of that, you do not have to buy panels and a battery on the same day to get 0%. Our guide to whether solar batteries are worth it shows when a battery makes sense. For the basics, read about solar battery storage.

Why the date matters

At 0%, you pay no VAT, but at 5% it adds to the price. For example, DESNZ reports a median cost of about £1,780 per kW for systems of 0 to 4 kW in 2025/26. That includes VAT where it applies and leaves out batteries. The source is DESNZ solar cost data.

As a rough illustration, 5% of £7,600 is £380. Which? gives £7,600 as a typical cost for a 4.5kWp system, citing Energy Saving Trust estimates. Your own quote will differ. Still, the sum shows why timing is worth a chat with your installer.

Installers book up, and surveys can take weeks. Therefore, do not leave it to the last month. Aim to finish the work well before the end of March 2027 if you want the 0% rate.

Does it change what you save?

Not directly. The relief cuts what you pay up front, but it does not change how much power your roof makes.

For output, look at local yield. See how solar performs in Liverpool or what to expect in Coventry. Our PVGIS data gives 965 and 987 kWh per kWp a year for those two. You can compare every city in our solar panel output table.

Your savings also depend on what you pay for power, since each unit you make replaces one you would buy. Ofgem’s price cap for October to December 2026 averages 26.32p per kWh, says Ofgem. Every unit from your own roof is a unit you do not buy at that rate.

What to check on your quote

A good quote is upfront about tax, because tax changes the total. Before you sign, look for these points:

• The VAT rate on each line, and the date it assumes.
• Whether the quote covers installation, not only equipment.
• What happens to the price if the work moves into April 2027 or later.
• Whether any battery is priced under the same relief.

Because paperwork matters, ask for the MCS certificate details. Our guide to MCS certification explains why that paperwork matters. Certification is also what lets you earn payment for spare power. We cover that in our Smart Export Guarantee explainer.

Other costs that VAT does not touch

VAT is only one part of the bill, although it is the easiest to miss. Your installer will also handle the grid notification. The route depends on the size of your system, and our G98 and G99 grid connection guide explains both.

For example, a battery can push a system over the G98 limit. MCS says the 16 A per phase threshold is the total output of all generators together. As a result, a quote for panels plus a battery may follow a different process from panels alone.

How to compare fairly

Get more than one quote, and make sure each shows VAT in the same way. Otherwise a cheaper-looking price may use a different assumption, yet look like a bargain. For help with the wider process, see our guide to solar panel installation.

Since you stay in control, you can ask for quotes from MCS-certified installers. We are not an installer. We pass on your enquiry with your consent, and you decide what to accept.

What if you are unsure?

Ask the installer in writing. A clear answer on tax should take them a minute. In contrast, a vague reply tells you something about the quote.

You can also read the HMRC notice yourself. It is plain enough to follow. For your own tax position, speak to HMRC or an adviser, because this page is a guide and not tax advice.

The short version

• 0% VAT applies to installed solar panels and batteries until 31 March 2027.
• The rate becomes 5% from 1 April 2027 under current rules.
• Timing of the install is what counts, so plan early.
• Check that every quote states its VAT treatment clearly.