Residential solar and battery installation VAT charges

Hi, I am in the process of seeking quotes from local companies to supply and install solar PV & battery in a residential property. I would like to check if my understanding of the VAT exempt status is correct. A local company (VAT registered) will be used to supply and install the equipment. The quote I have received for the panels and inverter seems to be inclusive of VAT (based on a Google search of wholesale suppliers). Am I correct in my understanding that as a customer, I should be paying cost of the solar and battery related supplies net of VAT? Many thanks

The zero rating applies only to the supply AND installation of energy saving materials such as PV/batteries. The contractor will buy materials from wholesaler, those materials will be plus 20% VAT as it's just materials. The contractor then installs those materials to your property - the act of installing those materials should see the whole supply (materials + labour) being zero rated. the contractor can reclaim the VAT they incur when they buy the materials. If your quote is including VAT at 20% then you should challenge the contractor and ask why they have not zero rated their quote. Note, the install of PV/batteries is zero rated, not "exempt", in your post you refer to VAT exempt status, there is no exemption from VAT, VAT is charged but at 0% so when speaking with contractor use the correct language so that there is no ambiguity with them. If you buy materials yourself from a wholesaler, they will be plus 20% VAT.

kanishka6582 .   Hi. If a company is both supplying and installing solar panels and battery as the same time as a single supply then it should benrfit from the relief and would be zero rated for VAT purposes Please see the guidance below: Energy-saving materials and heating equipment (VAT Notice 708/6)  . Thank you.

Hi, I have had solar panels installed on my roof, but due to delays installing a three phase electricity supply, the builder has not been able to install an invertor or connect the panels to the grid. As he is finishing the build he has charged me VAT on the solar panel installation because because it has not been connected or commissioned yet. In VAT Notice 708/6 installation is defined as permanent fixation, which the panels are. As the panels have not yet been commissioned is the builder correct to charge 20% VAT, or should he be charging zero rated VAT because the panels are permanently fixed to the roof? Kind regards

Hi,
Can you confirm if this is one overall supply or are a third party carrying out a separate supply of connecting it to the mains.
Thank you.

Hi, I hope it isn't too late to reply. I thought I was resolving the matter, but I have not. A third party will carry out a separate supply to connect the solar panels to the mains. This third party will be installing a second array of solar panels, and then connecting both sets of panels to the mains. VAT Notice 708/6 defines 'installation' as a process involving items being permanently fixed in place. Regarding solar (2.11) it lists the items, but the notice does not directly say that the panels must be connected to the mains. The solar which has been installed was done as one supply, and it is fixed permanently to the roof, with all wiring in place. The builder is states that as he is not completing the whole installation, he is charging 20% VAT on this work, unless I can get proof from HMRC that it should be zero-rated. Can you offer an opinion on whether the installation of PV solar panels, optimisers and cabling, which has been permanently fixed in place should be supplied at zero rated VAT? Many thanks

Hi Peter Le Feuvre,
It is down to the question of supply and who is doing what for whom. 
The key question, is who is commissioning the electrical contractor to connect the solar panels to the GRID. 
For example: 
If a customer engages a single supply of installation and connection of the panels, that would qualify. 
However, if the customer engages two separate supplies eg an installation from one party and a separate party to connect then it would not qualify. 
In this case, where the builder only fits and does not connect then it would likely be S/R. 
In some cases where the builder instals and the builder subcontracts the connection it would still be a single supply to the customer if that makes sense. 
Thank you.