If you’re pricing up solar panels, VAT is one of those boring-but-important details that can make a big difference to the final bill.
The good news? Most eligible residential solar panel installations in the UK currently qualify for 0% VAT - and the same can apply to battery storage too.
That means no extra VAT slapped on top of your installation costs, potentially saving you hundreds or even thousands of pounds.
In this guide, we’ll explain when the 0% VAT rate applies, when you might still be charged standard VAT, how long the relief is expected to last, and what it means for the total cost of going solar.
The Short Answer: Is There VAT on Solar Panels in the UK?
For most UK homeowners, no - eligible solar panel installations are currently charged at 0% VAT.
That means if you have qualifying solar panels supplied and installed at a residential property, VAT should usually be applied at 0%, rather than the standard 20%.
The same can also apply to battery storage, provided the installation meets the eligibility rules.
Importantly, this isn’t usually something you claim back afterwards. The VAT relief is applied by the installer at the point of purchase, so your quote and invoice should already reflect the correct VAT rate.
The rules are set out in HMRC VAT Notice 708/6, which covers energy-saving materials such as solar panels, heat pumps, insulation, and qualifying battery storage systems.
VAT on Solar Panels
Solar photovoltaic panels, better known as solar PV panels, are classed as energy-saving materials under UK VAT rules.
That means when they’re supplied and installed together by an installer at an eligible residential property, the installation should usually qualify for 0% VAT.
Put simply, the VAT relief can cover the full solar installation - not just the panels themselves. That typically includes:
The solar panels
Inverters and related electrical equipment
Mounting systems and roof fixings
Cabling, isolators, and other essential components
Labour for the installation work
So, if you’re having a residential solar PV system fitted by a VAT-registered installer, your quote and invoice should usually show VAT charged at 0%.
For a deeper look at pricing, see our guide to solar panel costs in the UK, or learn what to expect from a professional solar panel installation.
What Counts as “Supply and Installation”?
The key phrase in the VAT rules is “supply and installation.”
In simple terms, this means the installer provides the equipment and fits it as part of the same job.
So, if a company supplies your solar panels, battery, inverter, mounting kit, and labour as one installation package, the eligible parts of the work should usually qualify for 0% VAT.
Where things change is when you buy the equipment separately.
For example, if you buy solar panels, batteries, or other components from an online retailer or wholesaler without installation included, the 0% VAT relief may not apply in the same way. We’ll cover that in more detail below.
VAT on Battery Storage
Battery storage has had a slightly more complicated VAT history than solar panels, but the current rules are much better news for homeowners.
Today, qualifying battery storage installations can benefit from 0% VAT when supplied and installed by an installer in eligible residential accommodation.
This can apply in three main scenarios:
[1] Batteries installed with new solar panels
If your battery is supplied and fitted as part of a new solar PV system, it can qualify for the 0% VAT rate as part of the wider energy-saving installation.
[2] Batteries added to an existing solar system
If you already have solar panels and want to add battery storage later, the retrofit battery installation can also qualify for 0% VAT.
[3] Standalone battery storage systems
Qualifying standalone battery systems can also benefit from 0% VAT, even if they are not installed alongside solar panels, provided they meet the relevant conditions.
So, is battery storage VAT-free? For most homeowners, yes - as long as the battery is supplied and installed by an installer at an eligible residential property.
Learn more in our detailed guides to home battery storage.
When Does 0% VAT Apply?
The 0% VAT rate applies to the supply and installation of qualifying energy-saving materials in eligible residential properties.
In practice, that usually means three things need to line up:
The equipment and installation are provided together, usually by the same installer.
The property is residential, such as a house, flat, or another qualifying domestic building.
The technology is included on HMRC’s list of qualifying energy-saving materials, which includes solar PV panels and qualifying battery storage.
When these conditions are met, the installer should apply 0% VAT to the eligible installation work, including both materials and labour.
So, for a typical homeowner having solar panels or battery storage professionally supplied and fitted, the VAT rate should usually be 0% rather than the standard 20%.
When VAT May Still Apply
Not every solar or battery purchase automatically qualifies for 0% VAT.
In some cases, standard VAT may still apply, including:
Buying panels or batteries separately - for example, ordering equipment from a wholesaler or online retailer without installation included.
DIY solar installations - where you buy the kit yourself and install it without a VAT-registered installer supplying and fitting the system.
Non-qualifying buildings - such as purely commercial premises that do not meet the residential accommodation rules.
Extra work outside the VAT relief - for example, major structural changes that are not directly part of installing the solar panels or battery.
Repairs or replacement parts - if they are bought separately rather than supplied as part of a qualifying installation.
So, while the 0% VAT relief is generous, it does not cover every solar-related product or project.
If you’re buying equipment separately or planning a DIY installation, check the VAT position with your supplier before you commit.
How Long Does the 0% VAT Rate Last?
The current 0% VAT rate for eligible energy-saving materials is due to run until 31 March 2027.
After that, unless the government changes or extends the rules, qualifying installations are expected to return to the reduced 5% VAT rate.
For homeowners thinking about solar panels or battery storage, that makes the current window a strong opportunity to install while the VAT relief is still in place.
Waiting until after March 2027 could mean paying an extra 5% on the cost of an eligible installation.
That said, tax rules can change. The government could extend, amend, or replace the current relief before the deadline, so it’s worth checking the latest position with your installer before signing a contract.
How Much Could Homeowners Save?
The amount you save depends on the size and cost of your system. Put simply: the more your installation costs, the more valuable the 0% VAT relief becomes.
Here are a few simple examples showing how the final price could change under different VAT rates:
System type | Pre-VAT price | At 20% VAT | At 5% VAT | At 0% VAT | Saving vs 20% |
Small solar PV system | £5,000 | £6,000 | £5,250 | £5,000 | £1,000 |
Mid-size solar PV + battery | £10,000 | £12,000 | £10,500 | £10,000 | £2,000 |
Larger solar PV + battery | £15,000 | £18,000 | £15,750 | £15,000 | £3,000 |
Retrofit battery only | £6,000 | £7,200 | £6,300 | £6,000 | £1,200 |
These figures are illustrative only. Actual prices will vary depending on your property, installer, system size, roof type, battery capacity, and the equipment you choose.
Still, the point is clear - 0% VAT can make a meaningful difference to the upfront cost of going solar.
It can also improve your payback period, especially when combined with other support or incentives. For more information, see our guide to solar panel grants and funding.
Who Qualifies for 0% VAT?
The relief mainly applies to installations in residential accommodation.
That includes most standard UK homes, such as:
Houses
Flats
Residential rental properties
Some residential care homes
Student accommodation and similar residential buildings
Certain charitable buildings used for non-business purposes
So, if you own your home or you’re a landlord installing solar panels or battery storage at a residential rental property, the installation will usually qualify, provided the rest of the VAT rules are met.
Some properties can be more complicated, though. Mixed-use buildings, holiday lets, commercial premises, and unusual property arrangements may need closer checking.
In those cases, your installer should be able to confirm whether the installation qualifies under HMRC’s energy-saving materials rules.
Do Homeowners Need to Claim VAT Back?
In most cases, no - you do not need to claim VAT back yourself.
The 0% VAT rate should be applied by the installer when they prepare your quote and invoice.
That means:
You do not pay VAT upfront and reclaim it later.
Your quote should already show the correct VAT treatment.
Your final invoice should apply 0% VAT to qualifying installation work.
You do not usually need to submit anything to HMRC as the homeowner.
If an installer adds VAT to a quote for a solar panel or battery storage installation at your home, it’s worth asking them to confirm whether the energy-saving materials relief applies.
For more unusual projects, the VAT treatment can be more complex.
For example, if the work covers both qualifying and non-qualifying elements, your installer may need to split the invoice between 0% VAT work and standard-rated work.
Next Steps For Your Solar Journey:
When planning to install solar panels, there are several important factors to consider. Make sure to refer to the following guides to help you make informed decisions:
To dive deeper into these topics, head over to our advice section, check out our YouTube channel for informative videos, or read a customer case study to see how others have benefited from their solar installation.
Get Set for Solar with Heatable
Without boasting you should get your solar installed with us, here's why:
Thousands of Happy Customers: We boast an average score of 4.9 on Trustpilot, outperforming the market leader.
Which? Trusted Trader: Heatable is proudly recognised as a Which? Trusted Trader.
MCS Accredited: Our accreditation by the Microgeneration Certification Scheme (MCS) ensures high-quality standards.
Exclusive Panels: We offer REA Fusion solar panels, available only through Heatable.
Consumer Protection: As members of the HIES consumer code, we provide 2-year deposit protection.
Flexible Payment Options: Choose from multiple payment methods, including finance options.
Fixed Price Guarantee: Enjoy transparency with no hidden costs.
Save Your Quote: You can save your quote and decide later.
Bespoke Design Tool: Draw your own conclusion (literally) on whether solar is worth it for you, here.
