On 1 April 2027 the VAT on home solar goes from 0% to 5%. On a £6,000 installation that’s another £300, and if you add a battery to the same job, a £10,000 quote becomes £10,500 overnight.
Five percent won’t make or break most projects. It’s still real money, though, and it gives anyone who has been putting off a quote a date to aim for.
How we got here
Before April 2022, home solar carried either 5% or 20% VAT depending on the job. Then the Spring Statement in March 2022 cut the rate to zero for installations in homes in England, Scotland and Wales, starting on 1 April 2022 and ending on 31 March 2027.
Batteries came later. From 1 February 2024 the zero rate was widened to cover battery storage, and HMRC’s guidance is generous about which batteries count. A battery fitted with new panels qualifies. Retrofits to panels you already own count too, and so does a standalone battery that charges from the grid on a cheap overnight tariff with no panels involved at all.
What qualifies
The relief covers installations in residential accommodation, which for most people means their home. Solar PV and batteries are on HMRC’s list of energy-saving materials alongside things like insulation and heat pumps. One catch. The same business has to supply and fit the kit, so if you buy panels online and put them up yourself, you pay the full 20% on the hardware.
Business premises are left out. Panels on a shop, office, warehouse or barn carry the standard 20% rate, which VAT-registered businesses reclaim in the normal way. A farmhouse is still a home, though, so a system on the house can qualify even when the one on the sheds next door doesn’t. We explain the split on our farms and rural properties page.
Will the zero rate be extended?
Nobody knows yet. When the government widened the relief to batteries, it said a decision to extend the zero rate beyond 31 March 2027 wouldn’t be fiscally prudent at that stage, and it kept the option to decide nearer the date. Nothing had been announced by September 2026, when we wrote this.
We wouldn’t plan around an extension. Should one arrive, great, but anyone who waits and loses that bet pays the extra 5%.
When should you book?
The rate follows when the work is carried out and paid for. A system that’s installed and paid for by 31 March 2027 is zero-rated. If yours straddles the deadline, payments made either side of it can be treated differently, so we put the VAT position in writing on your quote before you sign anything.
Fitting a home system takes a day or two. The lead-up takes longer: the survey, the design, booking scaffolding and, for bigger systems, approval from the network operator. Allow several weeks from your first call to switch-on.
We expect February and March 2027 to be busy. Installers saw the same rush before the Feed-in Tariff closed to new applicants in March 2019, and diaries filled up weeks ahead. A quote in the autumn or winter leaves you time to compare installers properly.
Is solar still worth it at 5%?
For most homes, yes. A well-sized system in the North West saves a household around £600 to £1,200 a year, so £300 of extra VAT on a £6,000 installation works out at three to six months of savings. We size every system to pay back at either rate.
Get your figures
Book a free survey and we’ll give you an itemised quote with the VAT shown line by line. For more on the numbers, read our guides to solar panel costs in the North West and whether a battery is worth it, or have a look at our home solar and battery storage pages.