What is the tax rate for photovoltaic energy storage systems

Are solar and energy storage installations subject to VAT?

All solar and energy storage installations, including maintenance to existing sites, should be subject to 0% VAT. This should include residential energy storage when installed as a standalone measure.

What is 0% VAT on solar panels?

The 0% VAT on solar panels in the UK is a temporary measure, set to last until 31 March 2027. From 1 April 2027 onwards, the VAT rate on solar panel supplies will go back to the reduced rate of 5%, in line with the UK government's financial and renewable energy goals. Does 0% VAT apply to solar batteries?

How will VAT affect solar PV systems?

As a result, there will be a surge in consumer engagement and accessibility to green energy generation, storage, and management. The decision to eliminate VAT on battery storage systems is particularly beneficial for users of solar PV systems.

Are solar thermal and PV systems subject to VAT?

Solar thermal and PV systems are included on the list of ESMs. Their supply and installation are now subject to 0% VAT in Great Britain. In Northern Ireland, the previous rules remain in force. This means that solar is subject to 20% VAT unless a reduced rate of 5% applies.

Are solar panels tax deductible in the UK?

According to the UK government's list of Energy Saving Measures (ESMs), most solar photovoltaic (PV) panels installed on residential properties in Scotland, England and Wales (plus Northern Ireland, as of 1 May 2023) are exempt from VAT, meaning there’s no VAT included in the purchase and installation costs.

What is the current VAT treatment on the installation of energy-saving materials?

This briefing explains the current VAT treatment on the installation of energy-saving materials in the UK, analyses recent changes, and outlines recent developments. A zero-rate of VAT on the installation of energy-saving materials (ESMs), including solar panels, in residential accommodation, was introduced on 1 April 2022.