Solar panel installation is zero-rated for VAT anywhere in the UK until 31 March 2027. From 1 April 2027 it reverts to the reduced rate of 5%, not the standard 20%. That distinction matters more than the deadline itself. On a typical 4.5kWp system at the Energy Saving Trust's current benchmark of around £7,600, the zero rate is saving you roughly £380 against the post-2027 position, not the £1,520 you would be looking at if the rate went to 20%. There is a real deadline here. There is not a cliff edge. Source: gov.uk, VAT Notice 708/6.
What is the VAT rate on solar panels in the UK?
Zero percent, on the installation of solar panels in residential accommodation, from 1 May 2023 to 31 March 2027. HMRC's wording in VAT Notice 708/6 is direct: "A zero rate applies to the installation of certain specified energy-saving materials from 1 May 2023 to 31 March 2027." Solar panels are named in the list of qualifying energy-saving materials, and the notice defines them to include "photovoltaic (PV) panels with cabling, control panel and AC/DC inverter". So the inverter and the cabling come in at 0% too, not just the panels on the roof.
Unlike grant schemes and planning rules, which change at the border, this one is UK-wide. The zero rate has covered Northern Ireland on the same terms as England, Scotland and Wales since 1 May 2023. If you are comparing quotes across nations, VAT is the one number that will not move.
What else does the zero rate cover?
Batteries, smart diverters and the rest of the energy-saving materials list, all at 0% until the same 31 March 2027 date. The relief was widened on 1 February 2024, and the additions matter if you are specifying a full system:
- Battery storage. HMRC covers three separate cases at the zero rate: a battery retrofitted to store electricity from an existing solar system, a battery installed as part of the solar installation itself, and a standalone battery that only ever charges from the grid. All three qualify. On the Energy Saving Trust's £5,000 to £8,000 range for a complete storage setup, that is £250 to £400 of VAT you are not paying. The full picture is in our guide to solar battery storage costs and payback.
- Smart diverters. Retrofitting a diverter, the device that sends surplus generation to your immersion heater instead of the grid, is zero-rated. Where it is fitted as part of the solar install it is normally swept up as part of the single zero-rated supply anyway.
- Heat pumps, insulation, draught stripping, wind and water turbines, and heating controls. The list is longer than solar. If you are doing more than one measure, they can all fall inside the same relief.
The catch: it only applies if the same firm installs it
The zero rate applies to installation, not to buying the kit. If you buy panels from a retailer and fit them yourself, or hire a separate electrician, you pay 20% VAT on the hardware. This is the single most expensive misunderstanding on this page, and HMRC states it plainly: "if you supply energy-saving materials without installing them your supply will be standard-rated. For example, the sale of energy-saving materials by a retailer is always standard-rated."
The relief works two ways round. It covers the labour where you bought the panels yourself and employed a firm to fit them. It also covers the whole job, materials included, where one business supplies and installs. What it never covers is hardware sold on its own.
The practical consequence for a DIY-minded homeowner is that self-installing costs you 20% on every component and, separately, loses you the MCS certification you need to register for a Smart Export Guarantee tariff. A supply-and-install quote from an MCS-certified installer is the cheaper structure as well as the safer one.
What happens on 1 April 2027?
The rate goes to 5%, the reduced rate. It does not go to 20%. HMRC: "From 1 April 2027 onwards, supplies of installations of energy-saving materials will revert to the reduced rate of VAT of 5%." The zero rate was always a time-limited relief sitting on top of a pre-existing 5% rate for energy-saving materials, and it is that 5% the system returns to.
Here is what the deadline is actually worth, using the Energy Saving Trust's benchmark 4.5kWp system at around £7,600:
| VAT position | Rate | You pay | Difference |
|---|---|---|---|
| Now, to 31 Mar 2027 | 0% | £7,600 | Baseline |
| From 1 Apr 2027 | 5% | £7,980 | +£380 |
| If it went to standard rate (it does not) | 20% | £9,120 | +£1,520 |
Worked on the Energy Saving Trust's benchmark cost of around £7,600 for a typical 4.5kWp domestic system (page last updated 15 July 2026). The third row is included because installers quote it at you; it is not the position after March 2027. Sources: VAT Notice 708/6; gov.uk VAT rates; Energy Saving Trust.
Should you rush to install before March 2027?
Not at the expense of getting the right quote. £380 on a £7,600 system is about 5% of the price. Get three quotes on a 1930s semi in Leeds and the spread between the keenest and the dearest, for the same panels and the same inverter, will often be wider than that. A rushed decision made to beat the deadline can easily cost you more than the deadline does.
There is a second reason not to panic-buy. Installer order books fill up ahead of a known deadline, and a busy market is not where you negotiate well. If your system is going in during 2026 the question is moot anyway. If you are weighing up 2027, get your quotes on merit and treat the VAT as a tiebreaker rather than the reason. Whether the wider numbers work for your house is covered in are solar panels worth it in the UK.
Worth knowing too: there is no announced successor relief and no universal solar grant behind it. The 0% VAT rate is the main UK-wide support most households get, which is exactly why it gets oversold. What genuinely exists, scheme by scheme, is in our guide to solar panel grants in the UK.
Which buildings qualify?
Residential accommodation, which HMRC defines more broadly than most people expect. Houses and flats are the obvious case, but the notice also lists self-catering holiday accommodation, park homes and static caravans on permanent residential sites, houseboats adapted for permanent habitation where the owner pays council tax, student accommodation, care homes, hospices and religious communities.
Since 1 February 2024 the relief also covers buildings used solely for a relevant charitable purpose, such as a village hall. No certificate is needed, though the installer should keep something in writing confirming the intended use.
The standard 20% rate still applies to installations in hospitals, prisons, hotels and inns. If your property is a genuine hybrid, a pub with living accommodation above it for instance, the VAT treatment follows the use of the part being worked on, and that is a conversation for your installer's accountant rather than a website.
When the zero rate does not apply
The relief can be lost when solar is bolted onto a bigger building job, because VAT follows the main supply. HMRC's test is whether you are buying one thing or several. Where panels are the principal purchase and the rest is incidental, the whole job is zero-rated. Where the solar is incidental to something larger and standard-rated, it gets pulled up to 20% with it.
The notice's own example is an extension: build an extension and insulate its walls and roof as part of that construction, and the lot is standard-rated, because the extension is the principal supply. Timing and contracts matter here. Contract a builder to build an extension and fit heating controls throughout in the same contract, and it is one standard-rated supply. Ask separately, after the work has started, and the controls qualify for relief in their own right.
Two other situations worth flagging:
- New build. Panels installed during construction of a new dwelling are zero-rated as part of the zero-rated construction of the building, so you reach the same place by a different route.
- Roof repairs alongside the install. If your roof needs recovering before panels go on, that is potentially a separate standard-rated supply rather than part of the solar job. Ask the installer to show you how they have treated it on the quote, because it changes the total.
None of this is yours to administer. The installer accounts for the VAT, and a competent one will have priced it right. Your job is to read the quote. It should show the VAT treatment on its face, and anyone who cannot explain why a line sits at 0%, 5% or 20% is telling you something useful about how they run their business.
The number to check on your quote
A domestic solar quote in 2026 should show VAT at 0% on the supply and installation, with the total and the sub-total matching. If you see 20% on a straightforward domestic install, ask why before you sign, because either the job is structured as supply-only or something has been priced wrong. If you see a quote that presents the March 2027 deadline as a rise to 20%, treat that as a sales tactic rather than tax advice, and read our guide to choosing an installer for the other things worth checking.