0% VAT on Solar and Batteries Ends in 2027: What Waiting Actually Costs You

Solar panels, home batteries and heat pumps are zero-rated for VAT across the UK right now, and that relief is due to end on 31 March 2027. After that date the rate reverts to 5%, the reduced rate that applied before the relief was introduced, not the full 20% most other home improvements carry. It’s a smaller jump than it sounds, but it’s not nothing.

Where this relief actually came from

The 0% rate dates back to the Spring Statement in March 2022, when it replaced the previous 5% reduced rate on energy-saving materials for a set period. Home batteries weren’t covered at first unless they were fitted alongside new panels; HMRC extended the same 0% rate to standalone battery installations, including retrofits added to an existing system, from February 2024. Both are due to expire on the same date, 31 March 2027, under the legislation as it currently stands.

What 5% VAT actually adds

Take a typical 4kW rooftop system costing £7,500 at current prices. At 0% VAT, that’s the full £7,500. At 5%, it’s £7,875, a difference of £375. On a battery add-on costing £5,000, the same shift adds £250. Neither number changes the case for solar on its own, but it’s £375 you don’t have to spend if the work is done before the deadline rather than after it.

Why the date itself isn’t fully settled

31 March 2027 is what’s written into the current legislation, but VAT relief schedules get revisited at fiscal events, and the Autumn Budget on 28 October 2026 is the next one. Nothing announced so far suggests this specific relief is on the table for an early end or an extension, but it’s worth saying plainly: a date set by one Budget can be moved by the next one. If that changes, we’ll update this page rather than leave a stale deadline sitting here.

Does this actually change when you should buy

For most households the honest answer is: a little, not a lot. £375 on a £7,500 system is worth having, but it shouldn’t be the reason you rush a decision you haven’t otherwise made, and it shouldn’t push you into a worse quote just to beat a deadline. Where it does matter is if you were already planning to install in the next year or two anyway. In that case, getting it done before 31 March 2027 is a genuinely free saving, not a sales tactic.

What doesn’t change either way

The relief applies to the installation as a whole, materials and labour, when it’s carried out by the installer as a single supply. It doesn’t apply to standalone equipment you buy yourself and fit, or get a separate electrician to fit, which is taxed at the normal rate regardless of the date. If an installer’s quote splits the job into separate supply and labour invoices in a way that looks designed to dodge this, that’s worth asking about directly.

Get matched with vetted installers to get a quote that reflects the current VAT position properly, or see our solar cost and payback guide for the wider numbers.

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