Solar panel prices are going up. Is now the time to install?

Written by Michael Simm, Co-founder and Operations Director, SEGplc. Published 22 October 2026.

The short answer

If you are planning solar panels or a battery in the next year or two, getting surveyed this winter and installed before 31 March 2027 avoids a VAT rise that is already set, and probably some of the kit price rises too. But a deadline is no reason to accept a poor design or a rushed quote. Here is the detail.

1. VAT goes from 0% to 5% on 1 April 2027 (certain)

Solar panels and batteries fitted to homes have been VAT-free since April 2022. According to the House of Commons Library, that zero rate ends on 31 March 2027 and the 5% rate returns on 1 April 2027. The government has not announced an extension.

On a typical 4kW system costing £6,500 to £8,500, that adds about £325 to £425. With a battery, at £10,000 to £14,000, it adds about £500 to £700. These are published market ranges, not our prices. See 0% VAT on solar ends 31 March 2027 for the full table.

2. Panels have already gone up this year (likely to stay higher)

Most of the world’s solar panels are made in China, which the International Energy Agency says holds over 80% of manufacturing across every stage of the supply chain. Two changes have pushed panel prices up in 2026:

• China scrapped its export tax rebate. Exporters used to get 9% back (13% before November 2024). That rebate ended on 1 April 2026, so the same panel now costs the factory more to sell abroad. Trina Solar, one of the largest makers, put its prices up in January.
• Silver got much dearer. Solar cells use silver paste. It is under 5% of a panel’s weight but up to 30% of the cell cost, according to analysts at Heraeus. One European installer group, 1KOMMA5°, told Euronews that silver had risen by more than 150% within a few weeks in early 2026.

To be fair, wholesale panel prices have not kept climbing. European trade prices dipped by 1% to 4% in September, according to the sun.store index reported by PV Tech. And the panels are only part of an installed price: scaffolding, the inverter, the roof fixings, the electrical work and the labour make up the rest. So the panel price on its own will not move your quote much. But the very cheap panel prices of 2024 and 2025 appear to be over.

3. Batteries are next (rebate ends 1 January 2027)

China is phasing out the same export rebate on batteries. It fell from 9% to 6% in April 2026 and is due to end completely on 1 January 2027, three months before the VAT change.

The raw material is also moving. Lithium carbonate prices in China reached their highest level since November 2023 in January 2026, and the commodity analysts Argus expect demand for grid-scale battery storage to keep pushing lithium higher. Nobody can promise what a home battery will cost next spring, but the direction of travel is up, and from 1 April 2027 the 5% VAT sits on top.

4. Everything else is getting dearer too

An installation is more than panels and a battery. UK construction materials prices rose 6.4% in the 12 months to August 2026, according to Department for Business and Trade figures reported by BCIS. Copper, used in every cable, has also risen. Over time, those costs feed through to scaffolding, fixings, cable, switchgear and labour, so even with no VAT change the same job tends to cost a little more each year.

Meanwhile, energy bills are rising

The other side of the sum is what you save. Ofgem’s price cap rose 4% on 1 October 2026 to £1,723 a year for a typical home using gas and electricity, driven by high gas prices linked to the conflict in the Middle East. Cornwall Insight forecasts a further rise of about 16%, to roughly £1,999, from January 2027. That is a forecast, and it could change before Ofgem announces the cap in late November.

Every unit of electricity your panels produce is a unit you do not buy. A battery lets you use more of it in the evening. The more energy costs, the more each panel and each stored unit is worth.

Is now the time? Our honest view

Now makes sense if you plan to stay in your home for several years, have a roof facing roughly south, east or west without heavy shade, use a fair amount of electricity (working from home, an electric car or a heat pump), or already have panels and want a battery.

It may be worth waiting if your roof needs replacing in the next few years (do the roof first), you expect to move soon, or your roof is heavily shaded. A good installer will tell you if solar does not stack up for your home.

Do not leave it to March. Every solar job needs a survey and design, a notice or an application to the network operator (a G98 notification for most homes, or a G99 approval for larger systems, which can take weeks), scaffolding, and dry weather on the roof. With a fixed VAT deadline, we expect installers to be busy in February and March. Getting the survey done now gives you time to compare quotes properly.

FAQs

Will solar panel prices go up in 2027?

The VAT change is set: from 1 April 2027 a home installation carries 5% VAT instead of 0%. Kit prices are less certain. Panel prices rose earlier in 2026 and have since levelled off, while the end of China’s battery export rebate on 1 January 2027 and higher lithium prices point to dearer batteries.

Does paying a deposit before 31 March lock in 0% VAT?

Not necessarily. The rate depends on the timing of the invoice, any payment and when the work is done. Ask your installer in writing which rate applies to your job and why, and check with an accountant if you are unsure.

Can I add a battery to my existing panels VAT-free?

Yes. Since 1 February 2024, a battery added to an existing solar system, or a standalone battery connected to the grid, also qualifies for the zero rate until 31 March 2027.

Could prices fall again later?

They could. Solar has become much cheaper over the past decade and may do so again. But nobody can tell you when, and waiting means paying for grid electricity in the meantime and the 5% VAT afterwards.

Why SEGplc

We are an electrical contractor first, and MCS-certified to design and install solar PV and battery storage. We run our own office, SEG House in Chiswell Green, St Albans, from 32 panels on the roof, so our advice comes from our own bills. Our own electricians check your fuse board and supply before anything goes on the roof. See solar panels and batteries and how much solar panels cost.

Sources: House of Commons Library, VAT on solar panels and other energy-saving materials (CBP-8602, September 2026); PV Tech, Scrapping of China’s PV export tax rebate prompts module price surge (January 2026); Euronews, Are solar panel prices about to surge? (May 2026); PV Tech, European PV module prices inch downwards in September (October 2026); Investing News Network via Nasdaq, Lithium prices reach two-year highs (January 2026); Argus, ESS to jolt lithium higher in 2026; BCIS, Latest construction materials prices (October 2026); Ofgem, Energy price cap will rise by 4% from October 2026; Reuters via Global Banking & Finance Review, Price cap to rise 16% in January, Cornwall Insight (September 2026). This is general information, not tax or financial advice.