The 0% rate isn't a discount — it's the absence of VAT on the supply and installation of energy-saving materials. On a typical installation that's £1,200–£1,800 saved versus the standard 20% rate. After March 2027, the rate is uncertain.
What the 0% VAT rate covers
The zero rate applies to the supply and installation of energy-saving materials (ESMs) on residential premises. For solar specifically, this covers:
- Solar PV panels
- Battery storage systems
- Inverters (as part of a solar installation)
- Associated equipment and installation labour
Both the products and the installation labour are zero-rated — so the full installed cost attracts 0% VAT.
Domestic only
How much the 0% rate saves you
| System price | At 0% VAT (now) | At 5% (old rate) | At 20% (standard) | Saving vs 5% | Saving vs 20% |
|---|---|---|---|---|---|
| £5,999 | £5,999 | £6,299 | £7,199 | £300 | £1,200 |
| £6,999 | £6,999 | £7,349 | £8,399 | £350 | £1,400 |
| £9,000 | £9,000 | £9,450 | £10,800 | £450 | £1,800 |
The saving vs the old 5% rate is £300–£450 — meaningful but not dramatic. The saving vs standard 20% is £1,200–£1,800 — more significant.
What happens after March 2027?
The current legislation (Finance Act 2022) sets the 0% rate until 31 March 2027. After that date, the rate reverts — and that reversion depends on a future government decision:
- Option A: the government extends the 0% rate beyond March 2027 — a strong possibility given energy security and net-zero policy commitments.
- Option B: the rate reverts to the previous 5% reduced rate — a modest increase.
- Option C: the rate reverts to 20% standard rate — unlikely for domestic solar given policy direction, but technically possible.
The most likely outcome is an extension or a reversion to 5%. A full reversion to 20% would be a significant policy reversal and is not currently signalled by any mainstream party. But the 0% rate is a current legislative fact; the rate after March 2027 is uncertain.
A real, not manufactured, deadline
Lock in the 0% rate
Get a fixed-price quote from a renewable energy engineer — no sales pressure.
The wider picture: why now is a good time
- Panel and battery prices have stabilised after years of decline — further significant falls are unlikely near-term
- Smart tariffs and the Levelise Hub are more capable than ever — the same hardware installed today performs better financially than three years ago
- Electricity prices remain elevated — the payback on solar at current rates is significantly better than at pre-2021 prices
- Warm Homes Plan funding is in its early delivery phase — grant funding is more accessible now than it may be once demand increases
Does the VAT saving apply to the Levelise Hub and battery storage?
Yes — the Levelise Hub is part of the solar installation package and attracts the same 0% rate. All components Alliant supplies as part of a domestic solar and battery installation are zero-rated under the current legislation.
Battery storage installed alongside solar attracts 0% VAT. Battery storage installed as a standalone measure (not alongside solar) may attract 5% rather than 0% depending on the specific circumstances. We can advise when you enquire.
Frequently asked questions
Is the 0% VAT rate guaranteed until March 2027?
The 0% rate is in primary legislation (Finance Act 2022) until 31 March 2027. It would require an Act of Parliament to change it before that date — which is not being proposed by any party.
Do I need to do anything special to get the 0% VAT rate?
No. The 0% rate applies automatically to domestic solar installations by any VAT-registered installer. Our package prices (£5,999, £6,999, £9,000) are already the zero-rated prices — there's no VAT to add.
What about commercial solar — does 0% apply?
No. The 0% rate applies to domestic properties only. Commercial solar installations attract 20% standard rate VAT, which VAT-registered businesses reclaim as input VAT in the normal way.
