Zero rate of VAT for solar panel products

My company sells solar panel products. Now we use 20% vat. The government announced cutting VAT from five percent to zero upon installing energy-efficient systems such as solar panels,heating pumps from April 2022. I wonder if the vat rate is down to zero for solar products as well? many thanks.

Hi. The Zero rating for energy saving materials involves the supply/installation of energy saving goods. If solar panels are only supplied then the liability will be 20% but if they are supplied and installed then the liability would be zero rated for both the goods and the installation of the goods. Please see the guidance below: Energy-saving materials and heating equipment (VAT Notice 708/6)   . Thank you.

Dear HMRC Admin, Please can you confirm, Our company also supplies solar panels and batteries. If a domestic home purchases direct from us including installation, and we sub-contract to an MCS approved installer. Can you confirm the liability for the supply and installation of goods in this scenario. We would be very grateful for your reply as we are asked often. Kind Regards, Andrew

Hi Andrew Shaw,

As long as the critera are met for the installation of energy saving materials then the materials and the installationn can be zero rated by both the contractor and the sub contractor, please see the information below:

2. Installations of energy-saving materials

If the installation is carried out In Northern Ireland please see the situation for subcontractors: sec 2.5

2. Installations of energy-saving materials 2.1 Reduced-rated and zero-rated installations

Thank you.

Dear HMRC Admin, Please could you confirm if the 0%VAT extends to supply and install for new builds? Additionally, is the 0%VAT also included for supply and install for new and used commercial buildings. Regards, 

 

Hi. The 0% reduction is for residential properties and not commercial properties and does include new builds. Thank you.

Hi Would you please confirm that I am to charge 20% VAT on a solar PV installation to a business whose premises is based at their home please?

Hi,

The key element here is the type of premises that the installation is being made in. If it is a residential premises then the following guidance would be relevant:

Energy-saving materials and heating equipment (VAT Notice 708/6)

Thank you.

I would like to install a solar panel and battery system which will attach to my mains supply. The solar panel and battery are essentially portable (for campervans etc) but also designed and sold as suitable for permanent installation. The battery will be attached permanently to my consumer unit and the solar panel permanently fixed to my roof. There is some dispute concerning whether this is a fixed installation which qualifies for 0% vat, or if it is a potentially portable system which apparently does not. Please advise. The system is EcoFlow

Hi,

You can find guidance here:

Energy-saving materials and heating equipment (VAT Notice 708/6)

You may need to write to our VAT team for a definitive answer as to whether this qualifies as a fixed installation.

VAT: general enquiries

Thank you.

I am a property owner who would like to install fixed solar panels and battery system on a domestic property. My installer (not VAT registered) buys the equipment from a wholesaler who is adamant that there is 20% VAT on the goods and has issued a bill of materials including VAT. Please advise.

 

Hello, That is correct VAT will need to be charged on supply of materials it is only supply and fit that qualifies for the zero rate please refer to para 7 in section 2.1 of this guidance : Energy-saving materials and heating equipment (VAT Notice 708/6)   . Thank you.

My Solar equipment installer is also not VAT registered. I have a few VAT questions before he buys the equipment, When he buys the equipment from a wholesaler there is 20% VAT on the goods. 1. How does he claim back the VAT on the solar equipment given he is not VAT registered? and 2. Does he need to be registered installer to claim back the VAT on this solar equipment?

 

Hi. When he buys the equipmnent he will pay 20% VAT and will not be able to recover this as he is not VAT registered. When he charges you for the supplier he won't be able to charge you VAT on top of his charge as again he isn't VAT registered  . Thank you.

Please can you answer the second part of the question : Does the installer need to be a registered installer of solar equipment or can any VAT registered electrician claim back the VAT on the equipment? Thank you

 

Hello, As long as he is VAT registered and the purchase meets input tax rules notice 700 section 10 then he would be eligible to reclaim the input VAT See link: VAT guide (VAT Notice 700)   . Thank you.

Hi, I'm a developer importing solar panels, inverter and batteries for our installation in a project. Am I eligible to reclaim the VAT applied by customs? Thanks, PM

Hi. If you are VAT registered then you are allowed to recover the VAT as input tax as long as you meet the conditions in the guidance below: VAT guide (VAT Notice 700)  . Thank you.

Hi - I am being subcontracted for the electrical installation of solar panels in Northern Ireland to residential and commercial premises. Do I need to apply the 60% rule to see if I qualify to charge the reduced vat rate to the contractor on the residential installations and do I just charge standard rate on the commercial installations?

 

Hi. Yes as the installation is taking place in Northern Ireland then the customer doesn't benefit from the zero rated relief but they will benefit from the 5% relief if the 60% rule is met. For commercial premises the installation is always 20%. Please see the guidance below: Energy-saving materials and heating equipment (VAT Notice 708/6)    . Thank you.