If you have been considering solar panels for your home or business, there has not been a better time to act than right now. The UK Government currently applies zero VAT to the installation of solar panels and battery storage, meaning there is no VAT to pay on the cost of your system. That zero rate is in place until 31 March 2027, after which it reverts to the reduced rate of 5%.
For most households and businesses in Devon, that difference runs into hundreds, sometimes thousands, of pounds. This article sets out exactly what the relief covers, who qualifies, and why acting before March 2027 makes financial sense.
What does zero VAT on solar panels actually mean?
In April 2022, the UK Government extended zero-rate VAT to the supply and installation of energy-saving materials, which includes solar photovoltaic (PV) panels, battery storage, and heat pumps in residential properties. Before that change, solar installations carried a 5% VAT rate.
The current zero rate has been confirmed to run until 31 March 2027. From 1 April 2027, installations will return to the 5% reduced rate. The 20% standard rate does not apply to domestic solar installations.
What is covered?
The zero-rate relief applies to the supply and installation of qualifying energy-saving materials in residential accommodation in Great Britain. For solar, that includes:
- Solar PV panels (mounted on or attached to a building)
- Solar battery storage systems, whether installed at the same time as panels or added afterwards
- Associated equipment and installation labour
Does the zero rate apply to commercial properties? Not automatically. The zero rate currently applies to residential accommodation. Commercial solar installations are subject to the standard 20% VAT rate, though businesses can typically reclaim VAT if they are VAT-registered. If you are a business owner thinking about solar, speak to your accountant about your VAT position before commissioning a survey.
How much could I save?
The saving depends on the size and cost of your system. As a rough illustration: if a domestic solar and battery installation costs £8,500 before VAT, the difference between 0% and 5% VAT is £425. On a larger system at £12,000, the saving is £600.
Those figures represent money back in your pocket on top of the long-term returns the system generates through reduced electricity bills and Smart Export Guarantee (SEG) income.
What is the Smart Export Guarantee?
The Smart Export Guarantee (SEG) requires licensed energy suppliers to pay households and businesses for electricity exported to the national grid. As an MCS-accredited installer, M&E Contrax Renewables registers your system with an SEG tariff at handover, meaning you start earning from day one.
Combined with the zero-VAT saving, a solar installation commissioned before 31 March 2027 gives you the lowest upfront cost available alongside the income stream the system generates for the life of the panels.
Why does the VAT deadline matter?
The 31 March 2027 date is confirmed by HMRC. After that point, residential solar installations will attract 5% VAT. There is no indication the zero rate will be extended beyond that date.
Planning, surveying, and installation take time. Most reputable installers in Devon carry a pipeline of several weeks, particularly heading into the early months of the year. If you want to take advantage of the zero rate with confidence, the practical advice is to book your survey well before the end of 2026 to allow time for design, DNO approval if required, and installation before the March deadline.
How to get started
M&E Contrax Renewables is MCS-accredited and NICEIC-approved, based in Newton Abbot and covering Devon and the South West. We carry out a free, no-obligation survey at your property, assess your roof orientation, energy use, and grid connection, and give you a clear proposal with no hidden costs.
To book your free survey, call 01364 654271 or contact us via our online enquiry form. We will confirm your appointment within 48 hours.
MCS Accredited | NICEIC Approved | Newton Abbot, Devon
Written by Lee Bullingham, Solar PV Installation Lead, M&E Contrax Renewables. Published October 2026.
Is VAT zero-rated on solar panels in the UK?
Yes. The UK Government confirmed zero VAT on the supply and installation of solar PV panels and battery storage in residential properties until 31 March 2027. After that date, the reduced rate of 5% applies.
When does the zero VAT on solar panels end?
The zero rate ends on 31 March 2027. From 1 April 2027, domestic solar installations in Great Britain will attract 5% VAT.
Does the solar VAT relief apply to battery storage?
Yes. Battery storage systems installed alongside or separately from solar panels qualify for the same zero-VAT treatment until March 2027.
Does the solar VAT exemption apply to commercial properties?
Not automatically. The zero rate applies to residential accommodation. Commercial solar installations are subject to standard 20% VAT, though VAT-registered businesses can typically reclaim this. Speak to your accountant for guidance on your specific position.
How do I make sure I qualify before the March 2027 deadline?
Book your free survey early. Installation timelines, planning considerations, and DNO approvals can all add weeks to a project. Commissioning a survey before the end of 2026 gives you the best chance of completing installation before 31 March 2027.
