Zero rate of VAT for solar panel products

HI HMRC Admin, A VAT registered builder has purchased solar panels from a retailer paying 20% VAT. He has supplied and installed these at my residential home. Are the solar panels and the installation which he has carried out zero rated for VAT so that he does not charge me 20% VAT? In which case should he reclaim the VAT which has paid? Thanks for your help 

Hi,
If the supplier supplies and installs the energy saving materials then he would charge the zero rate of VAT both for the materials and the installation.He would then reclaim the VAT which he has incurred on his VAT return
Please see the following link for the conditions of the scheme:
Installations of energy-saving materials
Thank you.

Hi HMRC Admin, another query. Separately to employing a provider and installer of the solar panels I have egaged a VAT registered electrician to supply and fit everything necessary for the electical connection of the panels to the mains. Is his material and work also zero rated for VAT purposes (ie and he too should reclaim any VAT)? Again thanks for your help.

Hi,
If this electrical work is done separately by another supplier then the installation is not an installation of energy saving materials in themselves and so this wouldn't benefit from the relief.
Thank you.
 

Posting again as still haven’t had a response… Are solar power diverters, which use current sensing technology on the solar supply cable and are able to divert surplus solar power into hot water and heating systems, eligible for the zero rating of VAT under the ESM definition of 'hot water controls' when installed on their own (but connected to solar)? Logically, it seems as if they should, since they can reduce grid supply to 'charge' the hot water or heating system to zero and use 100% renewable self-generation. Thanks

Hi,
The VAT liability of the supply of solar power diverters will qualify to be zero-rated in Great Britain ( England, Wales and Scotland) when they are supplied and installed ( as a single supply) between the period 1/4/22 to 31/3/27.
The supply would qualify to be zero-rated under Item 1(a), Group 2, Schedule 7A, VATA 1994 when made by your business to a persons private residential address in Great Britain.
The functionality of the Solar power diverters as described in your e-mail would appear to fall within the description of ‘ hot water system controls’ as found in Item 1(d) of Group 2, Schedule 7A VATA 1994. I have reproduced the relevant part of HMRC’s internal guidance on this subject below:
VENSAV3050
Thank you.

Hi, I have a potential customer that wants solar panels installed on a mixed use building that has a car mechanics on the ground floor and then 2 floors of residential flats. I am waiting to find out about the connections but: 1. if it is one electricity connection to a mixed use building - would it be 20% (commercial) VAT chargeable on a solar install or 0% (residential)? 2. If the supply is split (separate supply for the mechanics garage and flats) - would this be 0% VAT on install (if we are installing on the residential flats side)? Thanks

Hi,

The energy saving relief will only be at the zero rate if installed in to a residential premises.

If it is a mixed use building and the solar panels are installed separately for the residential part then this can benefit from the relief as long as the conditions are met in the link below:

Installations of energy-saving materials

If the supply is a single supply of energy saving materials for both qualifying and non qualifying premises then please see the guidance below:

VENSAV3320 - Energy-saving materials: apportionment of energy-saving materials serving buildings used for both qualifying and non-qualifying purposes

Please note that no apportionment is allowed for qualifying/non qualifying premises.

Thank you.

My mother who is over 60 would like solar panels and LED lights and insulation fitted in an off grid wood ‘chalet’ that she owns but does not live in full time. Is the supply and fitting eligible for VAT relief?

Hi,
The installation of energy saving materials can be zero rated in to residential dwellings.
Please see the guidance below:
Installations of energy-saving materials
Thank you.

I work for a construction company that sometimes installs solar panels on buildings. We have carried out the installation of a replacement solar panel to a residential building (original was damaged but not installed by ourselves) and I am unsure what VAT rate should be applied to this replacement. Can you advise please. Thanks

Regarding invoicing, if the installation of solar panels + the solar panels + complements are qualify to be rated at 0%. Will this the right way to do it? Solar panels installation / QTY 1 / PRICE 1500 *Includes: -Service installation -Solar panel modules -Inverters -Batteries I am most interested to know if I can invoice the whole installation project as a "pack" that has a closed price and then listing what it includes. Or on the contrary I need to specify the quantities of each piece? like this: Solar panels installation / QTY 1 / PRICE 400 Solar panels / QTY 2 / PRICE 400 Inverters / QTY4 / PRICE 200 Battery / QTY 1 / PRICE 200

Hi,

You can see information at section 2.3 of the following guidance:  

Installations of energy-saving materials

As long as you meet the conditions in this notice the supply will be zero rated for goods and services.

Thank you.

I'm an installer. I have a large domestic installationto do, 3 phase, 36kwp. Inverter and batteries will be in the garden, but theground mount solar array wil be in his field, ie outside the curtilage. Is this still zero reated?

Hi if the solar panels are outside thecurtilage of the property, but inverter and batteries inside, what is the VAT position please? I am an installer. many thanks

Hi,
Please see section 2.1 of the following guidance:
Installations of energy-saving materials
Thank you

Thanks but that does not answer the specific question I posted!! I am fully aware of the zero rate for installations within the curtilage. My question is this, "if the solar panels are OUTSIDE thecurtilage of the property, but inverter and batteries INSIDE, what is the VAT position please? I am an installer."

Is the whole job zero-rated, or do I just apportion VAT to the equipment OUTSIDE the curtilage??

Hi John boyce,
The location of the solar panels does not change the purpose or use so would still fall within the relief of the single supply.
Thank you.

HI, The legislation refers to 'Supply of Materials' and separately to 'installation' and both being exempt VAT, if part of an installation. It makes no reference to qualification or indeed to MSC or other certification. In light of the fact that now one does not need to be accredited to instal PV systems ( see Octopus who are already accepting feed-in systems from non-accredited persons). Can you consider this scenario. Of course when accreditation was a requirement of installation the VAT issue would be similar if I bought all the materials and an accredited person fitted them. I assume then I would get VAT exemption direct from supplier and no vat on installation bill as well. I am a qualified electrician ( part P domestic). I have planning permission of 10Kw of ground-based array. I shall have 3 batteries, inverter and be feeding into the grid. Thus, I am buying the goods for an energy saving system, thus is seems I should qualify for VAT exemption for all the materials (including Inverter and cable). Am I mistaken and if I am can you tell me why, given I am complying with B Regs, Planning and Electrical rules? Also do I get exemption at purchase for materials (no charge for my own installation labour) or must I reclaim the VAT later. It is worth noting that the reason the electric companies can now accept non accredited (but demonstrably qualified electricians) to DIY is to kerb the greed of PV installers. My own system costs £6.5k in materials… I was quoted £32k (ex VAT which they included!!) by an accredited provider. Looks like the gravy train is hitting the buffers.