The 0% VAT relief today
Since April 2022, the UK has applied 0% VAT to qualifying energy-saving materials installed in residential accommodation — including solar panels, battery storage and heat pumps. This is the "energy-saving materials relief", set out in HMRC Notice 708/6.
The relief covers the whole installed job, not just the hardware: panels, inverter, battery, labour, scaffolding and electrical work all qualify for 0% VAT when supplied and installed by a professional.
The key date: the 0% rate is currently scheduled to run until 31 March 2027.
What changes in April 2027?
When the temporary 0% rate expires, the VAT on qualifying installations is expected to revert to the reduced rate of 5% — not the 20% standard rate. The 5% reduced rate is what applied to energy-saving materials before the 0% relief was introduced in 2022.
The 5% figure is the expected outcome, not a confirmed one. The government has not yet made a final decision on what happens after March 2027. Industry bodies (including the MCS Foundation) are actively lobbying to keep or extend the 0% relief, and the government could announce a change before the deadline. Treat the 5% figure as "likely, but subject to government decision".
Where the 20% standard rate does apply: if you buy materials yourself to self-install (the relief only covers supply-and-install by a professional), or for non-residential installations.
The real cost impact
Using a typical £7,000 4 kW solar installation as the example:
| Scenario | VAT | You pay |
|---|---|---|
| Install before 31 March 2027 (0% VAT) | £0 | £7,000 |
| Install after, at 5% reduced rate | +£350 | £7,350 |
| Install after, at 20% (only if relief removed entirely) | +£1,400 | £8,400 |
The most likely outcome is the middle row — an extra £350 on a £7,000 system. The 20% row is a worst-case that most analysts consider unlikely, since the scheduled fallback is the 5% reduced rate.
Run your own numbers with our panel cost calculator or see the full price breakdown in UK solar panel costs.
Should you install before March 2027?
Installing before 31 March 2027 locks in the 0% rate — saving you roughly £350 on a £7,000 system (or £500 on a £10,000 system, £600 on a £12,000 solar-and-battery job).
If you are ready to install anyway, doing it before the deadline makes sense — you save the VAT and start generating savings a year earlier. But don't rush a major purchase purely out of fear: if the government extends the relief, you're no worse off either way, and if it only reverts to 5%, the saving is modest (not the full 20% some sellers imply).
See whether solar stacks up for you in is solar worth it?, and check what funding is still available in grants and funding and home battery ROI.
What if the government extends the relief?
There is a real possibility the government keeps or extends the 0% relief. The policy was introduced to support net-zero targets, and industry bodies (led by the MCS Foundation and the Energy Insulation & Building Improvement Industry) continue to argue for its retention.
As of August 2026, no final decision has been announced. The two realistic outcomes are:
- Revert to 5% (the scheduled fallback), or
- Extend the 0% rate (if the government judges the relief is still needed to hit net-zero).
We'll update this page when the government confirms its decision. Bookmark it and check back.
See what solar saves you today
Run the numbers at the current 0% VAT rate — and lock in your savings before the deadline.
Calculate my savings →FAQ
When does the 0% VAT on solar panels end?
Under current policy, 31 March 2027.
What VAT rate will solar panels be after April 2027?
Expected to revert to the 5% reduced rate — but this depends on the government's final decision, which has not yet been confirmed.
Should I install now or wait?
If you're confident the relief will end and you're ready to install, doing it before March 2027 saves you the VAT (~£350 on a £7,000 system). If you're unsure, you can wait for the official decision — but you risk missing the saving if it ends as scheduled.
Sources: HMRC Notice 708/6 (energy-saving materials VAT relief), UK VAT rates guidance, parliamentary briefing CBP-8602, MCS Foundation lobbying briefings, industry coverage. The post-2027 rate is an expectation, not a confirmed figure — always confirm the current rate with your installer or HMRC before purchase.
Disclaimer: this guide is for general information only and is not tax or financial advice. VAT treatment depends on your circumstances; confirm with HMRC or a qualified adviser before making a decision.