Updated for 2026
Zero Percent VAT on Solar Panels and Heat Pumps, Before It Ends
For a limited window, the government charges no VAT at all when a qualifying installer fits solar panels, a heat pump or home battery storage in your home. That zero rate is written to end on 31 March 2027, when it returns to a 5 percent charge. The calculator below shows how much the deadline is worth on your own price, and the guide explains what qualifies, the rule that catches people out, and what to do before the rate changes.
What the zero rate actually means
Since April 2022 the installation of energy saving materials in homes across Great Britain has carried a VAT rate of zero percent. Northern Ireland joined in May 2023, so the relief now covers the whole of the United Kingdom. Zero percent is not the same as being outside the VAT system. It means the work is taxable, but the rate applied to it is nil, so a homeowner pays nothing in VAT on a job that would otherwise be taxed.
This matters because these installations are not cheap. A domestic heat pump or a full solar array runs into thousands of pounds, and VAT at the old rate was a real slice of the bill. The relief was introduced as a temporary measure to make cleaner heating and generation more affordable, and it was always given an end date rather than being made a permanent feature of the tax system.
Zero percent VAT savings calculator
Enter the price of your installation, the materials and labour together, and choose the technology. The calculator shows what you pay in VAT today at the zero rate, what the same job would cost once the rate returns to 5 percent on 1 April 2027, and the saving from getting the work done before the deadline.
The saving compares the 0 percent rate now with the 5 percent rate that returns on 1 April 2027. Without any relief, VAT at the standard 20 percent rate would add £2,000.00.
Which products qualify for zero percent VAT
The relief covers a fixed list of technologies set out in the official VAT guidance. If your installer is fitting one of these in a home, the supply is zero rated. The list grew on 1 February 2024, when the government added standalone battery storage, water source heat pumps, smart diverters and the groundwork needed for heat pump pipework.
| Technology | Notes |
|---|---|
| Solar panels | Roof or ground mounted panels that generate electricity or heat |
| Air source heat pumps | The most common domestic heat pump type |
| Ground source heat pumps | Includes the groundwork for the pipe loop from February 2024 |
| Water source heat pumps | Added to the list on 1 February 2024 |
| Home battery storage | Now qualifies even when fitted on its own from February 2024 |
| Smart diverters | Send spare generation to your hot water tank, added February 2024 |
| Insulation | Walls, floors, ceilings, roofs, lofts, tanks and pipes |
| Draught stripping | Sealing gaps around doors and windows |
| Heating and hot water controls | Central heating and hot water system controls |
| Wind and water turbines | Domestic scale generation |
| Wood fuelled boilers | Biomass boilers that heat the home |
| Micro combined heat and power units | Generate heat and electricity together |
The deadline that changes everything
The zero rate is written into law as a temporary relief. It applies to qualifying work completed on or before 31 March 2027. From 1 April 2027 the rate does not jump straight back to the standard rate. Instead it returns to the reduced rate of 5 percent, the rate these materials carried before the zero rate arrived in 2022.
That distinction is easy to get wrong. Plenty of marketing pages talk about saving 20 percent, but the real comparison for anyone weighing up the deadline is zero percent now against 5 percent later. On a ten thousand pound job, waiting past the deadline adds five hundred pounds. On a larger project it is proportionally more. The calculator above lets you put your own figure in.
Solar panels and the zero rate
A domestic solar installation is a clear fit for the relief. When a VAT registered firm supplies the panels and fits them as one job, the entire price is zero rated, including the inverter, mounting and labour. If you add a battery at the same time, that is covered too. The saving lands at the point of sale, so you see a lower invoice rather than claiming anything back later.
The picture changes if you try to buy panels yourself and pay someone only to fit them. More on that split below, because it is the single most common way people lose the relief without meaning to.
Heat pumps and the zero rate
All the main heat pump types are covered. Air source units, ground source units and, since February 2024, water source units all carry the zero rate when installed in a home. For ground and water source systems the relief now stretches to the groundwork, the digging and dredging needed to lay the pipe loop, which used to be a grey area and could add a large sum to a project.
Heat pumps are where the relief tends to be worth the most in cash terms, simply because the installed cost is high. Pair the zero rate with a grant where you qualify for one, and the combined effect on the final price can be significant.
The rule that catches people out
The zero rate applies to the installation of energy saving materials, not to the materials on their own. In practice that means one thing. The firm that fits your system has to be the same firm that supplies the equipment, and they invoice you for a single job. When that happens, the whole supply is zero rated.
Buy the panels or the heat pump yourself from a retailer, and that purchase is standard rated at 20 percent, because a shop selling hardware is making a supply only sale. Even if you then hire a separate fitter, you have already paid the VAT on the goods. The lesson is simple. Use one installer who both supplies and fits, and ask for a quote that covers materials and labour together.
What does not qualify
Not everything marketed as green sits inside this relief. A few items that people often assume are covered are still standard rated at 20 percent, so it is worth checking before you sign anything.
| Item | Why it stays at 20 percent |
|---|---|
| Energy efficient gas or oil boilers | A conventional boiler is not an energy saving material for this relief |
| New windows and secondary glazing | Not on the qualifying list |
| Standalone wood burning stoves | A stove used only as a room heater, unlike a wood fuelled boiler |
| Materials bought without installation | Any supply only purchase from a retailer |
Grants sit on top of the relief
The zero rate is separate from the grant schemes that help with cleaner heating. If you claim support such as the Boiler Upgrade Scheme towards a heat pump, the zero rate still applies to what you pay the installer for the qualifying work. The Boiler Upgrade Scheme covers England and Wales, and Scotland has its own support through Home Energy Scotland. The two reduce your cost in different ways, and using one does not cancel the other. Apply for any grant through its own process and keep the paperwork alongside your zero rated invoice.
Does it apply across the whole UK?
Yes. The zero rate reached England, Scotland and Wales in April 2022 and was extended to Northern Ireland in May 2023, so a qualifying installation in a home anywhere in the United Kingdom carries the same nil rate. The February 2024 additions, including standalone battery storage, apply across all four nations too. The relief also reaches buildings used solely for a relevant charitable purpose, not just ordinary homes.
How to lock in the zero rate before it ends
- Check your product is on the qualifying list, so you know the supply can be zero rated.
- Choose one VAT registered installer who both supplies and fits the materials, which is what keeps the whole job at zero percent.
- Ask for a combined quote that covers materials and installation together rather than splitting the hardware out as a separate sale.
- Get the work completed and invoiced on or before 31 March 2027, and book early given how busy installers get near a cut off.
- Keep the invoice that shows VAT charged at 0 percent, which is your proof the relief was applied correctly.
- If you are also using a grant like the Boiler Upgrade Scheme, apply for it through its own route and keep those records with your invoice.
What happens on 1 April 2027
Unless the government changes course in a future Budget, the zero rate ends on 31 March 2027 and the reduced rate of 5 percent takes over the next day. Nothing about the qualifying list is scheduled to change at that point, only the rate. For a homeowner it means the same installation carries a small VAT charge again, so the practical value of finishing a project before the deadline is the 5 percent you would otherwise pay. If you have been putting off a heat pump or a solar array, the window to pay nothing in VAT is strictly time limited.
Just need to add or take VAT off a price? Our free tool does it at the standard, reduced or zero rate in a couple of clicks.
Frequently asked questions
Yes. When a VAT registered installer supplies and fits qualifying energy saving materials in a home, the whole supply is zero rated, so you pay no VAT on it. This applies across the United Kingdom for work completed on or before 31 March 2027.
The zero rate is set to run until 31 March 2027. It covers qualifying installations completed on or before that date. From 1 April 2027 the rate changes.
It returns to the reduced rate of 5 percent, not the standard 20 percent rate. So the real cost of missing the deadline is the 5 percent you would then pay on the installation, which is what the calculator on this page shows.
No. Buying materials on their own is a supply only sale and stays at the standard 20 percent rate. The zero rate only applies when the same installer supplies and fits the equipment as a single job, so a do it yourself purchase misses the relief.
Yes, since 1 February 2024. Before that date a battery only qualified when fitted alongside something like solar panels. Now a standalone battery installation in a home carries the zero rate in its own right.
Yes. Northern Ireland was brought into the relief in May 2023, so the zero rate now covers homes in all four nations of the United Kingdom on the same terms.
Yes. The zero rate and grant schemes such as the Boiler Upgrade Scheme work independently. A grant lowers the price you pay, and the zero rate means no VAT is added to the qualifying installation. Claim any grant through its own process and keep the records with your invoice.
Use one VAT registered installer who both supplies and fits a qualifying material, get a combined quote for materials and labour, and have the work completed and invoiced on or before 31 March 2027. Keep the invoice showing VAT at 0 percent as your proof.
Sources: HMRC VAT Notice 708/6 Energy saving materials and heating equipment · The Value Added Tax (Installation of Energy Saving Materials) Order 2024 · House of Commons Library, VAT on solar panels and other energy saving materials · HMRC internal manual VENSAV3037. Figures are current for 2026 and are general guidance, not a substitute for advice on your own circumstances.