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0% VAT on solar panels and batteries ends on 31 March 2027
Fitting solar panels or a battery to your home is VAT-free today. From 1 April 2027 it is due to cost 5% more. Here is what that means in pounds.
Written by Michael Simm, Co-founder and Operations Director, SEGplc. Published 22 October 2026.
What is changing
Since 1 April 2022, installing energy-saving materials in a home has been zero-rated for VAT. That covers solar panels and battery storage, along with things like insulation and heat pumps. According to the House of Commons Library, the zero rate runs until 31 March 2027. From 1 April 2027 it is due to go back to the 5% reduced rate.
As of September 2026, the government had not said it will extend the zero rate. It could still change at a Budget, but if you are planning solar or a battery, the safe assumption is 5% VAT from April.
What 5% adds to a typical system
Published UK installer guides for 2026 put typical installed prices in these ranges. The right-hand column is what 5% VAT would add to the same job from 1 April 2027.
| System and typical price today | Extra 5% VAT from April 2027 |
|---|---|
| 3kW, small home £5,000 to £6,500 | +£250 to £325 |
| 4kW, two or three bedrooms £6,500 to £8,500 | +£325 to £425 |
| 5kW, three or four bedrooms £8,000 to £10,000 | +£400 to £500 |
| 4kW with a battery £10,000 to £14,000 | +£500 to £700 |
These are market ranges, not our prices. Your quote depends on your roof, scaffolding, the inverter, the battery and your electrics. See how much solar panels cost for what moves the price.
Already have solar? A battery counts too
Since 1 February 2024, the zero rate also covers a battery added to existing solar panels, and a standalone battery connected to the grid. If you have panels and want to use more of your own power in the evening, a battery fitted before 1 April 2027 is VAT-free.
What it does not cover
- Businesses. Solar on commercial premises is normally standard-rated, and a VAT-registered business can usually reclaim it. Check with your accountant.
- Kit bought on its own. The zero rate applies to the installation. Buying panels or a battery to fit yourself is standard-rated.
When to book
Solar takes longer than people expect. There is a survey and design, 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 the installation itself. Winter weather also slows roof work. If you want the 0% rate, it makes sense to get the survey done this winter rather than in March.
Which VAT rate applies depends on the timing of the invoice, any payment and when the work is done. Don’t assume a deposit fixes the rate: ask your installer in writing which rate applies to your job and why.
Why SEGplc
We are an electrical contractor first, and MCS-certified to design and install solar PV and battery storage. We put 32 panels on our own office, SEG House in Chiswell Green, St Albans, and run our vans from them, 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.
Kit prices are moving too. See solar prices are rising: is now the time to buy?
Sources: House of Commons Library, VAT on solar panels and other energy-saving materials (CBP-8602, September 2026); AccountingWEB, Further changes to VAT on energy-saving materials (February 2024). This is general information, not tax advice.
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