Answers · UK 2025/26
What is the VAT rate on solar panels in the UK in 2026?
Solar panels are zero-rated for VAT in the UK — meaning 0% VAT applies to both supply and installation. This zero-rating has applied since April 2022 and has been extended indefinitely. It covers solar PV panels, battery storage, and other energy-saving materials installed in homes.
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**Zero-rated VAT on solar panels** Since 1 April 2022, the installation of solar photovoltaic (PV) panels on residential properties has been zero-rated for VAT — meaning 0% VAT applies. This was reduced from the previous 5% reduced rate as part of the government's drive to encourage renewable energy adoption. **What is covered?** The zero-rating applies to: - Solar PV panels (supply and installation) - Battery storage systems (when installed alongside or as part of a solar system) - Wind turbines and micro-combined heat and power systems - Other energy-saving materials (insulation, heat pumps, draught stripping) The zero-rating covers both the materials and the labour for installation. **What is excluded?** If a battery system is installed separately (not at the same time as panels), VAT at 20% may apply on the battery element. Always confirm this with your installer. **Example: Emma, installing solar in 2026** Emma receives a quote of £8,500 for a 4kWp solar system with battery storage. Prior to April 2022, this would have attracted 5% VAT (£425 additional cost). Under current rules, 0% VAT applies — Emma pays exactly £8,500 with no VAT on top. **Business installations** For commercial properties, VAT on solar installations is typically charged at the standard 20% rate, though businesses can usually reclaim this as input VAT if they are VAT-registered. **Is the zero-rating permanent?** The zero-rating was initially time-limited to March 2027 but has been confirmed as extended. As with any tax policy, it is subject to future Budget changes, so always verify with HMRC guidance (VAT Notice 708/6) before contracting. **Smart Export Guarantee** As well as zero VAT on installation, households with solar panels can earn income under the Smart Export Guarantee (SEG), where energy suppliers pay for surplus electricity exported to the grid — typically 4–6p/kWh. See our SEG calculator for earnings estimates.
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This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.