VAT on solar panels and batteries

The current position

GOV.UK VAT Notice 708/6 says a zero rate applies to the installation of certain specified energy-saving materials from 1 May 2023 to 31 March 2027. From 1 April 2027, the notice says these installations revert to the reduced VAT rate of 5%, unless the rules change again.

The notice specifically includes photovoltaic panels with cabling, control panel and AC/DC inverter under solar panels. That is why domestic solar quotes are often shown with 0% VAT on the installed package.

Installed package, not a shopping basket

The relief applies to installation services, and it can also apply to energy-saving materials supplied by the person installing them. If you buy materials from a retailer without installation, GOV.UK says that supply is standard-rated.

This is one reason DIY cost comparisons can be misleading. A professional installed quote and a pile of parts bought online aren't always being taxed the same way.

Batteries and related equipment

Battery VAT can depend on whether it's part of a qualifying installed energy-saving package and how the work is supplied. The safest approach is to ask the installer to show the VAT treatment clearly on the quote and invoice.

If the quote includes extras such as an EV charger, roof repairs or unrelated electrical work, ask whether those parts are treated separately. Don't assume every line item automatically shares the solar VAT treatment.

What to check before signing

A good quote should make VAT boring. It should show the gross cost, VAT rate and scope of works clearly enough that you know what you're paying for.

• Is the installed solar PV package shown at the correct VAT rate?
• Are non-solar extras separated?
• Will the VAT treatment change if the install date moves beyond 31 March 2027?
• Does the invoice match the quote?