0% VAT on solar and batteries: what qualifies, and what does not
Zero-rate VAT on solar and battery installations runs until 31 March 2027, then the reduced 5% rate comes back. The rules are narrower than the headline suggests, and the value of the window is smaller than most people assume.
Updated 28 October 2026 · written by the Clearline guidance team · 6 min read

The short answer
There is no VAT on a qualifying domestic solar or battery installation in the UK at the moment. The zero rate on the supply and installation of energy-saving materials in residential accommodation has applied in Great Britain since 1 April 2022 and in Northern Ireland since 1 May 2023, and it runs until 31 March 2027. From 1 April 2027 the reduced 5% rate returns.
Two things follow from that, and they pull in opposite directions. The relief is broader than most homeowners realise, because it covers the labour, the scaffold and the cabling as well as the kit. It is also worth less than most homeowners assume, because the rate it replaced was 5%, not 20%.
The window closes on 31 March 2027
Zero rating applies to qualifying installations up to and including 31 March 2027. From 1 April 2027 the rate is 5%. That is a step from 0 to 5, not from 0 to 20. On the MCS-registered average domestic solar install of £8,677, the difference is £433.85.
Confirmed by the 28 October 2026 Budget
The Budget did not extend or make permanent the zero rate: the Red Book lists the return to the reduced rate as planned (paragraph 6.215), so 5% applies from 1 April 2027. From the same date heat batteries join the materials that qualify for 5%, through secondary legislation that has not yet been published. See our deadline guide for what that means for timing.

- Rated power
- 530 W
- Area per panel
- 2.26 square metres
What qualifies
- Solar PV panels, supplied and installed in residential accommodation. Covered since 1 April 2022 in Great Britain.
- Electrical battery storage, added to the list from 1 February 2024. It qualifies fitted alongside new solar, retrofitted to an existing solar system, or standalone with no panels at all.
- Smart diverters and water source heat pumps, added on the same date.
- The labour, whether the job is supply-and-install or labour-only. Both are within the relief.
- The rest of the job when it is supplied under a single installation contract: scaffolding, cable runs, fixings and the work of putting it all in.
That last point is the one that carries real money. Across a typical UK solar installation, roughly 45% of the cost is hardware, 30% is labour and 25% is logistics including scaffolding and transport. Scaffolding alone runs from around £300 to over £1,000 on a solar job, about 13% of the total. All of it sits inside the zero rate when it is part of one qualifying install contract, which is why the relief is worth more than a straight look at the panel prices suggests.
Batteries on their own were the 2024 change
Before 1 February 2024, battery storage was only zero-rated when it went in as part of a solar installation. Since that date a battery qualifies in its own right, retrofitted or standalone. Market guidance puts the typical saving against the 5% rate on a battery installation at roughly £225 to £500, depending on system size.
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What does not qualify
- Buildings that are not residential accommodation. The relief is written for homes. A workshop, a let commercial unit or a business premises sits outside it.
- Hardware bought without installation. The relief is for the supply and installation of energy-saving materials. A box of panels or a battery bought from a merchant for a DIY fit is a different transaction, so do not assume the zero rate travels with the goods.
- Anything installed from 1 April 2027. The date governs, not the date you got the quote.
- Work contracted separately from the install. Zero rating attaches to the qualifying installation. Unrelated building work arranged under its own contract, a re-roof being the common example, is a separate supply with its own VAT treatment.
What the 2027 change actually costs
| System | Installed price, 0% VAT | Same job at 5% | VAT added |
|---|---|---|---|
MCS-registered average domestic install, early 2026 | £8,677 | £9,110.85 | £433.85 |
4 kWp at the bottom of the 2026 band, £1,550 per kW | £6,200 | £6,510.00 | £310.00 |
4 kWp at the top of the band, £1,800 per kW | £7,200 | £7,560.00 | £360.00 |
6 kWp at the average rate of £1,686 per kW | £10,116 | £10,621.80 | £505.80 |
Installed prices are MCS-derived cost benchmarks for early 2026, before VAT. The 5% column is our own arithmetic applied to those benchmarks. They are illustrations, not quotes, and regional variation is real: South East installs ran 10 to 15% above North East on like-for-like systems in the March 2026 data.
Around £300 to £500 on a solar job, and £225 to £500 on a battery, is worth having. It is not, on its own, a reason to install a system you would otherwise have thought about for another year. It is closer in size to the gap between two quotes for the same work, which is the comparison worth making first. There is more on where the money in a quote actually goes in our guide to solar panel costs in 2026.
A free design call gives you a costed system with the VAT position stated in writing, from our own MCS-certified, fully insured installation teams rather than a price you have to decode.
Get my free quote →How to read a quote for VAT
Look for VAT at 0%, not for no VAT at all
A qualifying install should be shown as zero-rated on the paperwork. A quote with no VAT treatment stated is a quote you cannot check.
Confirm it is one installation contract
Scaffold, labour, cable, commissioning and certification on the same contract as the kit. That is what pulls the whole job into the zero rate.
Check the installation date against the deadline
If the work is scheduled anywhere near 31 March 2027, get the VAT position confirmed in writing before you pay a deposit.
Check the property qualifies
The relief is for residential accommodation. Mixed-use and commercial premises need the treatment confirmed rather than assumed.
Whether the deadline should change your timing
Two figures decide that, and neither of them is the VAT rate. The first is what the system saves you every year, which is driven by your import rate, your export rate and how much of your generation you actually use. The second is what the job costs, which varies far more between quotes than 5% does. If those two stack up, the VAT window is a bonus on top. If they do not, the window will not rescue them. We lay out that countdown, and what moving the job forward or back across it actually costs, in the VAT deadline guide.
The one case where the date genuinely bites is a phased plan. Fitting panels now and adding storage in 2028 means the second job carries 5%, on top of paying for a second visit. If a battery is likely at some point, working out the whole design at the start is worth doing on cost grounds alone, and our guide to battery sizing covers where that lands.
Because import rates, export rates and installed prices all vary by region, the version of this arithmetic that matters is the local one. Every county page across our coverage area carries a calculator built on the same model, and the fundamentals sit in our solar guide and battery storage guide. If a quote you have been given does not add up, the help centre covers what to ask.
VAT treatment checked against HMRC Notice 708/6 in August 2026. VAT rules and installed cost benchmarks both change: confirm the position for your own job before you commit to it. Every system is installed and commissioned by our own MCS-certified, fully insured teams, and we are not tax advisers.
VAT questions, answered
Is there VAT on solar panels in the UK right now?
No. The supply and installation of solar panels in residential accommodation is zero-rated for VAT across Great Britain and Northern Ireland. That has applied since 1 April 2022 in Great Britain (1 May 2023 in Northern Ireland) and runs until 31 March 2027. It covers the labour and the rest of the installation, not just the panels, when the job is supplied under a single install contract.
When does 0% VAT on solar and batteries end?
31 March 2027 is the last day of the zero rate, and the 28 October 2026 Budget confirmed it will not be extended. From 1 April 2027 the reduced rate of 5% applies to qualifying energy-saving materials. HMRC's VAT Notice 708/6 does not say how the rate treats a contract signed or a deposit paid before 1 April 2027 for work finished after it, so if your completion date is close, get the VAT position confirmed in writing.
Do batteries qualify on their own, without solar panels?
Yes, since 1 February 2024. Electrical battery storage is zero-rated fitted with new solar, retrofitted to an existing solar system, or installed standalone with no panels at all. Before that date the relief only reached batteries installed as part of a solar system.
Is the scaffolding zero-rated too?
When it is part of a single installation contract for the qualifying work, yes. The whole job including scaffolding, cable runs and labour goes in at the zero rate. That matters more than it sounds: scaffolding is typically £300 to over £1,000 on a solar install, around 13% of the total, and labour is roughly 30% of the cost of a typical job.
What will 5% VAT add to my quote after March 2027?
On the MCS-registered average domestic solar install of £8,677, it adds £433.85. On a 4 kWp system priced within the 2026 band of £1,550 to £1,800 per kW, it adds £310 to £360. On a battery installation, market guidance puts the typical figure at roughly £225 to £500. Those are illustrations on published benchmarks, not quotes.
Does 0% VAT apply in Scotland, Wales and Northern Ireland?
Yes. The zero rate covers residential accommodation across Great Britain and Northern Ireland on the same terms and the same end date. Installed prices vary regionally, but the VAT treatment does not.
Should I rush to install before the deadline?
Only if the system already makes sense on its own numbers. The relief is worth 5% of the job, and the spread between two quotes for the same work is routinely wider than that. Get the design and the savings right first, and treat the VAT window as a bonus rather than the reason.
Does 0% VAT mean I am saving 20%?
No, and this is the most common misunderstanding. Energy-saving materials sat at the reduced 5% rate before the zero rate began, and revert to 5% from 1 April 2027. The current relief is worth 5% of the installed price, not 20%.
See the numbers next: LONGi 530 W panels, installed, or the solar panels guide.
Figures and specifications in this guide are sourced below and were checked on the date shown. Rates and product specifications change; we confirm the current picture on your free design call.
Sources
- HMRC, VAT Notice 708/6 on energy-saving materials and heating equipment, covering the zero rate from 1 April 2022 (Great Britain) to 31 March 2027, the reversion to 5%, and the February 2024 additions of battery storage, smart diverters and water source heat pumps, accessed August 2026 gov.uk
- The Value Added Tax (Installation of Energy-Saving Materials) Order 2022 (SI 2022/361): articles 1 to 7 in force 1 April 2022, zero rate on installing energy-saving materials in England, Wales and Scotland to 31 March 2027, checked 28 September 2026 legislation.gov.uk
- The Value Added Tax (Installation of Energy-Saving Materials) Order 2023 (SI 2023/376): the same zero rate in Northern Ireland from 1 May 2023 to 31 March 2027, checked 28 September 2026 legislation.gov.uk
- Department for Energy Security and Net Zero, solar PV cost data underlying the MCS-registered installed cost benchmarks used in the table, accessed August 2026 gov.uk
- Solar Energy UK, guidance on the VAT treatment of solar and battery storage installations, accessed August 2026 solarenergyuk.org
- Industry guidance on the scope of the zero rate where solar and battery storage are supplied under a single installation contract, accessed August 2026 smartliving.energy
- Scaffolding cost benchmarks for UK solar installations, including the share of total install cost, accessed August 2026 spartek.co.uk
- Market guidance on the typical VAT saving on a battery storage installation measured against the 5% rate, accessed August 2026 renewablesexcellence.co.uk
- MCS-derived domestic solar installed cost benchmarks for early 2026 and the regional cost spread, accessed August 2026 thehomeenergyhub.co.uk
- HM Treasury, Budget 2026 document (Red Book), accessed 28 October 2026 https://www.gov.uk/government/publications/budget-2026-document/budget-2026-html
- HMRC and HM Treasury, Budget 2026: Overview of tax legislation and rates, accessed 28 October 2026 https://www.gov.uk/government/publications/budget-2026-overview-of-tax-legislation-and-rates-ootlar/budget-2026-overview-of-tax-legislation-and-rates-ootlar
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