VAT on solar panels depends on the building. Fitted during the construction of a new home, solar is zero-rated with no end date. Installed on an existing home, it is zero-rated until 31 March 2027 and then 5%. Panels bought without installation are standard-rated at 20%, and self-builders who buy materials directly can reclaim eligible VAT within 6 months of finishing.
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VAT on solar panels at a glance
| Situation | VAT rate | Basis | End date |
|---|---|---|---|
| Solar fitted during construction of a new dwelling | 0% (zero-rated) | VAT Notice 708; Notice 708/6 new-dwelling rule | No end date |
| Solar installed on an existing home | 0% until 31 March 2027, then 5% | Energy-saving materials relief, Notice 708/6 | 31 March 2027 |
| Battery installed in an existing home (with solar or on its own) | 0% until 31 March 2027, then 5% | Notice 708/6, from 1 February 2024 | 31 March 2027 |
| Panels bought without installation | 20% (standard-rated) | Notice 708/6: materials supplied without installing | — |
| Self-builder buying materials directly | 20% paid, then reclaimed where eligible | VAT refunds for DIY housebuilders | Claim within 6 months of finishing |
New builds: solar is zero-rated as part of construction
The construction of a new dwelling is zero-rated for VAT, and HMRC treats solar fitted as part of that construction the same way. Notice 708/6, HMRC's guidance on energy-saving materials, is explicit: if you install energy-saving materials during the course of construction of a new dwelling, the supply is zero-rated, covering both the construction of the building and the installation of the energy-saving materials. Solar panels are energy-saving materials for this purpose. The detailed rules for new dwellings are in VAT Notice 708, Buildings and construction.
For a developer, this means the solar array, inverter and any battery installed as part of building the home carry no VAT, and there is no end date to worry about: this is part of the permanent zero-rating of new dwellings, not the temporary relief for existing homes. With solar now expected on new homes under Part L 2026, the array is simply part of the zero-rated build.
Self-builders: two ways to avoid paying VAT on solar
If you are building your own home, there are two routes.
- Supply and install by a VAT-registered installer during construction. The installer's supply is made in the course of constructing a new dwelling, so it is zero-rated and no VAT should be charged. This is usually the simplest route for solar, and it keeps the MCS certification with the installer.
- Buy materials yourself and reclaim. HMRC's scheme for DIY housebuilders lets you apply for a VAT refund on eligible building materials when you build a new home yourself. Services to a new build are zero-rated, so there is nothing to claim on them, and HMRC's published lists of goods do not name solar panels. Read the guide to the self-build VAT reclaim before you buy anything yourself.
The deadline matters. GOV.UK says that if you completed the building work on or after 5 December 2023, you must apply no more than 6 months after finishing. For work completed before that date the limit was 3 months, which is why older guides still quote the shorter window.
Existing homes: 0% until 31 March 2027
For solar installed on an existing home, the energy-saving materials relief applies. Under Notice 708/6 a zero rate applies to installing certain energy-saving materials in residential accommodation in Great Britain from 1 April 2022 to 31 March 2027 (in Northern Ireland from 1 May 2023), after which these revert to the reduced rate of 5%. Solar panels are covered, whether installed in or on the site of the building.
The relief is for installation. HMRC is clear that if you supply energy-saving materials without installing them, the supply is standard-rated, so panels bought online for someone else to fit do not qualify on their own.
Batteries and VAT
From 1 February 2024, electrical storage batteries installed in residential accommodation qualify for the same temporary zero rate, whether they are connected to a solar system or installed on their own. On a new build, a battery installed as part of the construction falls within the new-dwelling zero rating instead, with no end date. The battery storage guide for new builds covers sizing and brands.
What changes after 31 March 2027
The date matters differently depending on the project:
- New builds: nothing changes. Solar installed during construction stays zero-rated.
- Existing homes: installations after 31 March 2027 are charged at 5% unless the relief is extended. If you are retrofitting, completion timing is worth discussing with the installer.
- Self-builds: nothing changes for the new-dwelling rules, but keep the 6-month refund deadline in mind if you buy any materials yourself.
Other money questions, from self-build mortgage drawdowns to the Smart Export Guarantee, are covered in the finance guide and the new-build solar incentives guide.
Checklist before you pay
- On a new build, check the quote shows VAT at 0% for the solar supplied and installed during construction.
- On an existing home, check the installation is quoted at 0% and completes before 31 March 2027 if timing matters to you.
- Do not buy panels separately expecting the relief: materials-only supplies are standard-rated.
- Self-builders buying materials: keep invoices and diarise the 6-month refund deadline from completion.
- Ask for the MCS certificate at handover so you can claim Smart Export Guarantee payments.
- Check the installation also meets the building regulations: see solar panels and building regulations.
This page summarises HMRC guidance and is not tax advice. Check the current notices on GOV.UK, or ask an accountant, for your own circumstances.