The UK’s temporary 0% VAT relief on qualifying solar panel and battery storage installations is scheduled to end on 31 March 2027. Here’s what the upcoming change means for homeowners considering renewable energy.
If you’re thinking about investing in solar panels or home battery storage, there’s an important change on the horizon that could affect the overall cost of your installation.
Under current UK legislation, the temporary 0% VAT rate on qualifying domestic solar panel and battery storage installations is due to end on 31 March 2027, with VAT returning to the reduced rate of 5% from 1 April 2027.
For homeowners across Northumberland, Tyne & Wear, County Durham and North Yorkshire, this means that installing a solar energy system before the scheduled change could represent a worthwhile saving.
At Solar EV North, we believe in keeping our customers informed about changes that could affect their investment in renewable energy.
Here’s everything you need to know.
Why Are Solar Panels Currently VAT-Free?
In April 2022, the UK Government introduced a temporary zero rate of VAT on qualifying installations of energy-saving materials in residential properties across Great Britain.
The measure was designed to make energy-saving technologies more affordable and encourage homeowners to improve the energy efficiency of their properties.
The relief was subsequently extended to Northern Ireland and expanded to include additional technologies.
For eligible homeowners, this means that qualifying solar panel installations currently benefit from 0% VAT rather than the standard 20% rate.
Importantly, the relief can cover both the qualifying equipment supplied by the installer and the associated installation work.
This has helped reduce the upfront cost of investing in renewable energy technology.
What’s Changing on 1 April 2027?
The current zero-rated VAT period is scheduled to end on 31 March 2027.
Unless the Government announces an extension or changes the legislation, qualifying installations supplied from 1 April 2027 will return to the reduced VAT rate of 5%.
This change applies to qualifying energy-saving technologies, including:
- Solar photovoltaic (PV) panel installations.
- Home battery storage installations.
- Battery storage retrofitted to an existing solar system.
- Qualifying standalone home battery installations.
- Other eligible energy-saving technologies, including certain heat pumps.
It’s important to understand that this is not an increase to the standard 20% VAT rate for qualifying installations.
Instead, the temporary 0% relief is scheduled to end, with the reduced 5% rate returning.
How Much More Could Solar Panels Cost?
The financial impact will depend on the overall cost of your chosen system.
For example, assuming an installation qualifies in full for the reduced VAT rate and the underlying price remains unchanged:
| Installation Cost Before VAT | At 0% VAT | At 5% VAT | Difference |
|---|---|---|---|
| £6,000 | £6,000 | £6,300 | £300 |
| £8,000 | £8,000 | £8,400 | £400 |
| £10,000 | £10,000 | £10,500 | £500 |
| £12,000 | £12,000 | £12,600 | £600 |
| £15,000 | £15,000 | £15,750 | £750 |
| £20,000 | £20,000 | £21,000 | £1,000 |
These examples illustrate the potential additional VAT cost from April 2027, assuming the installation price and applicable tax treatment remain the same.
For homeowners investing in a comprehensive solar and battery storage system, the difference could amount to several hundred pounds.
Although VAT is only one consideration when choosing a system, it’s certainly worth factoring into your plans.
Does the VAT Change Affect Battery Storage?
Yes.
Since February 2024, qualifying electrical battery storage installations have also benefited from the temporary 0% VAT rate.
This includes eligible batteries installed alongside solar panels, batteries added to existing solar installations and standalone home batteries designed to store electricity from the grid.
This has been particularly beneficial for homeowners who want to expand an existing solar installation or take advantage of smart electricity tariffs through battery storage.
Under the current legislation, these qualifying installations will also return to the reduced 5% VAT rate from April 2027.
For anyone considering adding battery storage to their property, the upcoming change is another factor worth considering.
Should You Install Solar Panels Before April 2027?
If you’ve already been considering solar panels or battery storage, the scheduled VAT change provides an additional reason to review your plans.
However, we believe that choosing the right system and installer is far more important than rushing into a decision purely to avoid a tax increase.
A properly designed solar installation is a long-term investment that should deliver value for decades.
Factors such as equipment quality, installation standards, system performance, warranty coverage and ongoing support should always come first.
At Solar EV North, our approach is to design systems around each customer’s individual property, energy consumption and future requirements.
By planning ahead, homeowners can allow sufficient time for consultation, system design, technical approvals and installation.
It’s also important to understand that if you accept your proposal before March 2027 you will lock in 0% VAT.
Why System Quality Matters More Than Ever
With the cost of installing renewable energy systems potentially increasing, choosing the right equipment becomes even more important.
At Solar EV North, we specialise in premium solar and battery storage solutions from established manufacturers, including SOLARWATT and GoodWe.
Our systems are designed to offer long-term reliability, intelligent energy management and high-quality performance.
As an officially recognised SOLARWATT Premium Partner for 2026, we are proud to offer customers access to premium German solar technology, including SOLARWATT’s glass-glass solar panels and advanced Battery vision storage systems.
We also offer GoodWe’s innovative all-in-one energy storage solutions, including systems with integrated backup capabilities.
Every installation is carefully designed around the homeowner’s requirements and completed by our own experienced installation teams.
We don’t believe in compromising on quality to achieve the lowest possible price.
Instead, our focus is on delivering renewable energy systems that represent excellent long-term value.
Premium Equipment. Premium Installer.
What Happens If the Government Extends the 0% VAT Relief?
The current legislation provides for the temporary zero rate to end on 31 March 2027.
However, tax policy can change, and the Government could choose to extend or amend the relief before that date.
Any such change would need to be confirmed through an official Government announcement and the relevant legislative process.
At Solar EV North, we’ll continue to monitor developments and keep our customers informed of any important updates.
For now, homeowners should plan around the published April 2027 change rather than assume the zero rate will be extended.
Planning Your Solar Installation for 2027
If you’re considering solar panels or battery storage in the coming months, early planning can make the process considerably smoother.
Depending on the property and proposed system, the installation process can involve a technical survey, detailed system design, Distribution Network Operator (DNO) approval, equipment procurement and installation scheduling.
By starting the conversation early, you’ll have more time to consider the available options and make an informed decision.
Our team can guide you through the process and help you understand which technologies are most suitable for your home.
Whether you’re looking for a complete solar and battery installation or simply want to add storage to an existing system, we’re here to help.
Speak to Solar EV North About Your Installation
The scheduled VAT increase in April 2027 is an important consideration for homeowners thinking about renewable energy.
While a 5% VAT rate remains significantly below the standard 20% rate, the difference could still represent hundreds of pounds on a complete installation.
If you’ve been thinking about investing in solar panels or battery storage, now is a sensible time to explore your options.
At Solar EV North, we provide premium renewable energy installations across Northumberland, Tyne & Wear, County Durham, North Yorkshire and beyond.
Visit our showroom in Cramlington or speak with one of our technical consultants to discuss your requirements.
Solar EV North – Premium Equipment. Premium Installer.
📞 01670 569 269
📍 Unit 8, B Village, Nelson Park West, Cramlington, NE23 1WL
Official Government Guidance:
HMRC – VAT on Energy-Saving Materials and Heating Equipment
Information correct as of November 2026. VAT rates and eligibility are subject to Government legislation and HMRC guidance. Individual installations and payment arrangements may be subject to different VAT treatment.