What changed in April 2022
Prior to April 2022, residential solar panel installations in the UK were subject to 5% reduced-rate VAT. From 1 April 2022, the government introduced a zero rate (0% VAT) for the installation of solar panels, battery storage systems, heat pumps, and certain other energy-saving materials on residential properties in Great Britain.
The zero rate is scheduled to remain in place until 31 March 2027, at which point it is due to revert to the 5% reduced rate unless extended by the government.
Northern Ireland has a different VAT regime (as it remains subject to EU VAT rules). Check with your installer for the current position if you are in Northern Ireland.
What the zero rate covers
The zero rate applies to the supply and installation of qualifying energy-saving materials — including solar panels — on residential properties and buildings used solely for non-business purposes. This covers the panels themselves, inverter, mounting hardware, cabling, and the installation labour, all as part of the same supply.
Battery storage systems are also zero-rated, whether installed alongside solar panels or as a standalone retrofit to an existing solar installation. The zero rate applies to the full installed cost of the battery system.
A key point: the zero rate applies to the combined supply of goods and services as part of an installation. You cannot separately zero-rate the panels purchased without installation, or vice versa.
What the zero rate does not cover
Servicing, maintenance, and repair of existing solar installations are not covered by the zero rate. This includes solar panel cleaning — professional cleaning is a standard-rated service (currently 20% VAT). Some smaller sole-trader cleaners operating below the VAT registration threshold (currently £90,000) will not charge VAT at all; larger or VAT-registered cleaning businesses will charge 20%.
Commercial and business property installations do not qualify for the zero rate, which applies to residential properties only. If the property is mixed-use (partly residential, partly business), only the residential portion qualifies.
Scaffolding costs are sometimes quoted separately. HMRC's position is that scaffolding hired separately from the installation does not qualify for the zero rate — it should be subject to standard rate. Many installers will include scaffolding within the overall zero-rated supply, but be alert to this in detailed quotes.
How it affects quotes
A VAT-registered solar installer should quote you zero-rated installations without VAT on the solar elements. If an installer is quoting you 5% or 20% VAT on a standard residential installation, this is incorrect — either an error or a compliance issue worth querying.
A system that might have cost £8,000 including 5% VAT (roughly £381 of VAT) now has no VAT on the solar installation element, saving that amount relative to the pre-April 2022 position. The saving is real but not dramatic — the 0% vs 5% differential on a typical system is £350–£600.
The more significant financial interventions for most homeowners remain the Smart Export Guarantee export payments and the Boiler Upgrade Scheme for heat pumps, rather than the VAT position itself.