An essential guide for charities in the UK to understand the 0% VAT incentive on solar panels and battery storage systems.
- 0% VAT on Solar Panels and Batteries Explained
- Do Charities Qualify for 0% VAT on Solar Panels and Battery Storage?
- How Do I Apply for the VAT Reduction?
- Has the VAT reduction actually made solar panels and battery storage cheaper?
- Are solar panels worth it?
- Is Battery Storage Worth Getting Too?
- Do Solar Panels and Battery Storage Improve ESG Score?
- How Much Do Solar Panels Cost?
- How Much Do Storage Batteries Cost?
- Do Solar Panels Save Money?
- How Many Solar Panels Will My Charity Need?
- What Grants Are Available for Solar Panels and Battery Storage?
Running a charity can be expensive – especially when it comes to energy costs. You can reduce these bills by making the switch to solar energy.
Not only will your energy bills be cheaper, but you’ll be helping to make the world a greener place (while you and your charity focus on making the world a better place).
Solar panels historically haven’t been cheap, however, so it’s been a burden in the past to pay the upfront costs. These costs were made more manageable in February 2024 by the introduction of 0% VAT on solar panels and storage batteries.
We’re explaining all that here in this article, giving you the information you need on what 0% VAT means for solar panel costs, whether there are loans and grants available for solar systems, and how long the 0% VAT on solar and battery projects will last for.
Key takeaways:
Solar panels help reduce your charity’s carbon footprint
You’ll shrink energy bills too
Wherever you are in the UK, solar panels will generate electricity
0% VAT makes the upfront cost more affordable
Solar storage batteries help you use more of the electricity your panels generate
You can sell any excess electricity back to the grid
Want your charity to start generating clean electricity AND benefit from lower bills? We can help – we offer MCS certified solar panel and battery installation nationwide.
Be aware that solar system installations are very rarely the same, meaning there isn’t a one-size-fits-all approach. Any figures in this article are to provide an estimate only. To get an accurate quote, start here.
0% VAT on Solar Panels and Batteries Explained
In February 2024, the UK government removed the VAT rate on solar panels in an effort to make it easier for charities to save money on solar panels. Prior to this, the 0% VAT on solar panels was only available for residential installations.
Charities can benefit from 0% VAT on installations too, as long as the same provider is used to supply and install the solar panels (we’re pretty good at this, by the way).
The 0% VAT also extends to battery storage, so charities can take advantage of this to save money on solar storage.
The 0% VAT also extends to battery storage, so charities can take advantage of this to save money on solar storage.
If you’re thinking of installing solar panels and battery storage with 0% VAT, you have until March 2027 to do so (though we have no indication that the UK government isn’t considering extending the 0% VAT after this date).
Do Charities Qualify for 0% VAT on Solar Panels and Battery Storage?
Yes, charities can get 0% VAT on solar panels and battery storage as long as they can guarantee that the building the solar system is installed in is used for charitable purposes only.
Businesses remain subject to the standard 20% VAT rate for both solar panels and storage batteries however.
How Do I Apply for the VAT Reduction?
You don’t actually need to apply for 0% VAT on any solar panels and battery storage you purchase – the reduction is automatically applied. You’ll need to meet certain criteria to get this automatic reduction however, which includes:
The solar panels and battery storage are for a residential property or building used for charitable purposes.
You cannot purchase second hand solar panels or battery storage.
Both the panels and battery storage must be installed by an MCS-registered installer.
Has the VAT reduction actually made solar panels and battery storage cheaper?
Solar panels and battery storage are definitely cheaper thanks to the 0% VAT reduction, and the savings get more attractive the bigger the system.
Say you’d purchased a solar panel system worth £22,500 before the VAT reduction – now, you’ll pay £18,750, making a saving of £3,750. Not bad ay?
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We’re proud to be MCS accredited and Which? Trusted solar installers with over 10,000 glowing reviews on Trustpilot. Discover why so many trust us for their solar panel installations—visit our Reviews and Testimonials page and watch Phil’s video testimonial below.
Are solar panels worth it?
We say yes, getting solar panels is worth it because they'll cut your energy bills, reduce your emissions, and make your charity less reliant on the grid.
The latter is important, because over the last few years we’ve all become keenly aware of how much electricity prices can fluctuate. And while solar panels won’t completely remove your reliance on the grid, they will help shield you from dramatic electricity cost increases.
As for shrinking your carbon emissions, solar panels can reduce them by a substantial amount. On the residential level, a typical solar panel system can reduce carbon emissions by 0.7 tonnes a year. For a medium sized charity, you can expect to reduce your emissions by roughly 9.9 tonnes a year.
All this, even in cloudy, rainy UK? Solar panels work just fine in the UK, even when the sun isn’t shining. Sure, they won’t work quite as well in these conditions (solar panels become up to 66% less effective under heavy cloud cover), but they’ll still generate clean electricity for free.
Is Battery Storage Worth Getting Too?
Getting battery storage alongside solar panels is worth it if you want to further reduce your reliance on the grid, your carbon emissions, and your energy bills.
Having battery storage also means getting to use 50% more of the electricity your panels generate. A small caveat to this is that most charities operate during the day, so there might not be as much value in storing solar energy for use after the sun goes down.
You’ll still benefit from a storage battery if you store electricity on sunnier days for use when there’s heavier cloud cover.
Where it might not be worth it is in the high upfront costs, despite them being lower thanks to the 0% VAT initiative. Because solar batteries last around 12.5 years on average, you’ll have to purchase at least two within the typical 25-year lifespan of a solar panel system.
This can really increase the time it takes to break even on your solar system. Adding batteries to a solar panel system can increase the break-even point to 24 years in some cases, so keep this in mind.
Do Solar Panels and Battery Storage Improve ESG Score?
Yes, getting solar panels and battery storage will increase your charity’s ESG score, which can help make it more attractive to potential donors.
An ESG score is a way of measuring how well a business or charity performs against environmental, social, and governance (ESG) standards.
Explore a Solar Case Study: Check out an insightful Q&A session featured in one of our detailed case studies on domestic solar panels. Hear directly from a Heatable customer in the UK and gain valuable perspectives on their experience here.
The image above shows a 23-panel solar installation, carried out by the MCS-certified solar team at Heatable, featuring the REA Fusion2 solar panels.
How Much Do Solar Panels Cost?
The average cost of solar panels in the UK is £7,000 for a typical 3.5 kWp system (around 10 panels). This is factoring in the 0% VAT rate as well.
How Much Do Storage Batteries Cost?
Including installation, the average cost of a storage battery is around £4,500. This’ll only get you a battery with a capacity of around 10 kWh, so you’ll almost certainly need more if you’re planning on storing enough energy to power a charity.
Do Solar Panels Save Money?
A medium-sized solar panel array of 30 kilowatt peak (kWp) will save around £5,000 a year in energy bills. Just to clarify, kilowatt peak is the peak potential of a solar panel system and is what it can generate under perfect conditions. Realistically, you’ll generate less than the advertised peak due to weather and other factors.
You should also factor in profits made by exporting excess electricity you generate back to the grid via the Smart Export Guarantee. The largest energy suppliers in the UK are obligated to pay you for any electricity you generate from solar panels that you don’t use.
You probably won’t be able to make a huge amount from this though, especially if you’re using the electricity during the day. If you have battery storage however, you could export excess electricity generated and stored, say, over the weekend for example.
How Many Solar Panels Will My Charity Need?
A medium-sized charity consumes around 37,500 kilowatt hours (kWh) per year, which’ll require roughly 142 solar panels. We’re assuming a similar setup to a medium-sized business here, so your charity could require substantially fewer solar panels.
For a small charity (again, assuming similar energy usage to a small business), the annual electricity usage falls to around 22,500 kWh. You can meet this demand with roughly 84 panels.
At the end of the day, the number of solar panels you’ll need will vary drastically depending on your charity’s setup, size, and energy requirements.
To get some idea of how big a solar system you might need, work out the following:
Annual electricity consumption
Available roof space
Average sunlight hours (use the Greenwich Meantime website to work out your local sunlight hours)
You’ll be able to easily see your electricity consumption on your energy bills, or by contacting your energy supplier.
What Grants Are Available for Solar Panels and Battery Storage?
There are currently no government grants available for helping charities reduce the cost of solar panels and battery storage, other than the 0% VAT initiative.
This could change, however, as the UK government has set aside roughly £5 billion in funding to help businesses go greener, so hopefully there’ll be something to help charities in the future.
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.
