0% VAT on Solar and Batteries Until March 2027 — What It Covers and What It Saves
The zero rate on residential solar and home batteries runs until 31 March 2027. Here's exactly what qualifies, roughly what it knocks off, and why the deadline matters less than you'd think.
If you're thinking about solar panels or a home battery in Great Britain, there's a genuine tax break running right now: a 0% VAT rate on the supply and installation of residential solar PV and batteries. It applies until 31 March 2027. This guide covers exactly what qualifies, what it's actually worth, and — crucially — whether the deadline should change what you do. We're an independent audit firm: we don't sell or fit anything, so we've no reason to rush you.
What the 0% rate actually covers
The zero rate applies to the supply-and-install of residential energy-saving materials — which includes:
- Solar PV panels fitted to (or near) your home
- Home batteries, including standalone retrofit batteries added to an existing system or with no solar at all
This runs until 31 March 2027. The key word is installed: the 0% rate covers the complete supply-and-fit package from an installer. It's a residential measure — it applies to homes in England, Scotland and Wales.
Northern Ireland: NI operates under a separate market and VAT arrangement. If your property is in NI, don't assume the Great Britain position applies — confirm the current NI treatment before budgeting.
One thing to be clear about: this is for residential installs. Commercial installs are standard-rated for VAT — a VAT-registered business reclaims it rather than paying 0%, and there are separate tax reliefs (capital allowances) that do the heavy lifting there. So if you run a business, don't expect a '0% VAT' quote — that's not how it works for you.
What it actually saves you
Zero VAT means the install price is the price — no 20% (or reduced-rate) VAT stacked on top. On a typical residential job, that's a real chunk of money.
Using indicative installed prices as a guide, a residential solar system commonly lands around:
| System | Typical installed price |
|---|---|
| 4 kWp solar | £6,500–£9,500 |
| 6 kWp solar | £9,000–£13,000 |
| 8 kWp solar | £11,000–£16,500 |
| 5 kWh battery | £3,500–£5,000 |
| 10 kWh battery | £6,500–£9,000 |
These figures already reflect the current market with the 0% rate in effect — quotes you receive now should be inclusive of it. The saving versus a VAT-rated world is the VAT line you're not paying. Ask any installer to show the VAT line as £0 so you can confirm you're getting it.
On the running-cost side, a well-sized solar system typically saves around £400–£700 a year in self-consumption — electricity you generate and use instead of buying from the grid at roughly 24.67p/kWh (the Ofgem cap resets quarterly and standing charges apply on top, so always check your own bill).
The deadline that actually matters — and the one that doesn't
Here's the honest bit. The 31 March 2027 date is real, but it should not panic you into a rushed decision. A hurried, badly-sized or badly-priced install will cost you far more than the VAT you'd save by beating a deadline. A rushed quote at an inflated price can wipe out the entire benefit of the zero rate.
What matters far more than the VAT deadline:
- Sizing to self-consumption. A system too big for how you actually use power exports cheaply and pays back slowly. Systems over 3.68 kW per phase need a G99 application and the DNO may impose an export limit.
- Your export tariff. Under the Smart Export Guarantee (SEG), export rates range widely — roughly 4p to 16.5p/kWh depending on supplier and tariff. SEG rates are retailer-set and change with 30 days' notice, so confirm the current rate before you model anything.
- The battery business case. There's no household subsidy for a battery. The case rests on self-consuming more of your own solar, charging cheaply overnight on a smart tariff, and premium export tariffs that require a battery. Typical battery payback sits around 7–12 years — tariff-dependent.
Here's the catch: 0% VAT lowers the entry price, but it doesn't make a bad install good. If the economics don't work at today's prices, they don't work — and rushing before March 2027 won't fix that. For some households, the honest answer is that a battery in particular may not pay for itself within its warranty.
Before you commit
Three checks that protect you regardless of the deadline:
- Use an MCS-certified installer and product — it's required to claim SEG, and it's your quality marker.
- Get the VAT line itemised at £0 so you know the zero rate has been applied.
- Read your own electricity bill for your unit rate, standing charge and tariff type before anyone models your savings — not the price-cap average.
And if your property is in Scotland, note that solar and battery grants (as opposed to this VAT relief) route differently — through Home Energy Scotland rather than England-and-Wales schemes. Confirm what's available for your address.
Every 'free' comparison site gets paid by the installer it refers you to. We don't — we take nothing from any installer, ever. That's why we'll tell you plainly when solar stacks up, when a battery doesn't, and when beating a VAT deadline isn't worth a worse deal. The zero rate is a genuine saving; it's still only worth having on the right system at the right price.
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Start your home audit — £100Figures in this guide are current at the date of publication and indicative only — SEG/export rates change with 30 days' notice, the Ofgem price cap resets quarterly, and grant terms change. Confirm the current numbers for your situation before you commit. This is general information, not personal financial advice.