0% VAT on Solar Panels & Battery Storage Explained
The UK Government currently provides VAT relief on qualifying energy-saving materials, including solar panels and battery storage systems. Understanding when 0% VAT applies can help you make informed decisions about your renewable energy investment. This guide explains the current rules in plain English.
What is the current VAT rate for solar panels?
The UK Government introduced a 0% VAT rate for qualifying energy-saving materials installed in residential properties. This relief forms part of the Government's commitment to making the transition to clean energy more affordable for homeowners.
For many homeowners, this means solar and battery installations can be supplied and installed at 0% VAT — a significant saving compared to the standard 20% rate that applies to most goods and services.
Currently covered under 0% VAT
Solar PV panels
Supply and installation at residential properties
Battery storage systems
New installations and retrofits
Associated installation work
Labour, fixings, inverters, and related materials
Does battery storage qualify for 0% VAT?
Battery storage systems can qualify for 0% VAT when installed in qualifying residential properties. This applies whether the battery is part of a new solar installation or being added to an existing system.
Solar + battery installed together
A combined installation where solar panels and battery storage are installed at the same time as part of a single project.
Battery added to existing solar
A retrofit battery added to a solar system already installed at the property — increasingly popular as battery costs fall.
Whole-home battery storage
Standalone battery storage installed at a residential property, even without solar panels, may qualify in certain circumstances.
What types of property qualify?
VAT treatment depends on the property type and the specific circumstances of the installation. The table below provides a general guide — we recommend seeking confirmation before proceeding.
Residential Homes
Typically EligibleMost owner-occupied homes qualify for 0% VAT on solar and battery installations.
Flats & Apartments
Often EligibleOften eligible depending on ownership and installation circumstances.
Residential Landlords
May QualifyMay qualify in some situations — seek confirmation before proceeding.
Commercial Premises
Different RulesCommercial installations are subject to different VAT treatment.
New Build Properties
Different RulesNew builds are typically zero-rated through a separate mechanism — rules differ.
Always seek confirmation for your specific circumstances before committing to a project based on VAT treatment.
How much could 0% VAT save?
The saving can be significant. Here are some illustrative examples based on typical project values. Figures are for illustration purposes only — actual costs will vary.
Solar Installation
Solar + Battery Installation
Retrofit Battery Storage
Figures are illustrative only and based on hypothetical installation costs. Actual project costs and VAT eligibility will vary. Seek independent advice before making decisions based on VAT treatment.
VAT on solar & battery — FAQ
Why consider solar & battery storage?
Beyond the current VAT position, there are several practical reasons why solar and battery storage can represent a sound long-term investment for residential and commercial properties.
Reduce your energy bills
A well-designed solar and battery system can significantly reduce the amount of electricity you buy from the grid. Most residential systems generate enough to cover a substantial proportion of annual electricity use.
Smart tariff optimisation
Battery storage combined with smart tariffs — such as Agile Octopus or Economy 7 equivalents — can allow you to charge overnight at low rates and discharge during peak periods, further improving your return.
Energy independence
Generating and storing your own electricity reduces your reliance on grid energy and provides a degree of insulation against future price rises. Battery storage extends the benefit into the evenings when solar generation stops.
Current VAT relief
The 0% VAT rate for qualifying residential solar and battery installations is a meaningful saving. On a typical system, this equates to hundreds or thousands of pounds that would otherwise be payable. Tax rules can change, so the current position is worth acting on.
Thinking about solar or battery storage?
Book a free survey with Omni3. We can assess your property, discuss your energy usage and explain how current VAT rules may apply to your specific project.
Or call us on 01798 263333
Related Resources
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Important — please read
The information on this page is intended as a general guide only and does not constitute financial, tax or legal advice. VAT legislation may change and individual circumstances vary. Customers should seek professional advice where appropriate before making decisions based on VAT treatment. Omni3 Limited accepts no liability for reliance on the information contained on this page. This page was last updated June 2026.