0% VAT on Solar & Battery — Expires 1 May 2027 (London Guide)

Solar PV panels and inverters, battery storage (PV-coupled or standalone retrofit), air-source and ground-source heat pumps, immersion diverters, insulation materials, draught-stripping, central heating system controls, hot-water system controls, water turbines and wind turbines. The list is defined in VAT Notice 708/6 and applies to the full installed price where it forms a single supply with the energy-saving material.

Standalone smart meters supplied by the energy supplier, like-for-like boiler swaps without efficiency upgrade, and any work on commercial premises. Repairs and routine maintenance of existing ESMs are also outside the zero rate — they remain standard-rated at 20% unless part of a qualifying upgrade.

Yes, but only to the residential portion. A shop with a flat above qualifies for zero rate on works to the residential flat — solar panels feeding the flat, a battery sited in the flat. Where a single PV array serves both the shop and the flat, the installer apportions the supply by output share, and only the residential share is zero-rated.

Yes. The relief attaches to residential use, not to ownership status. Leasehold flats with the freeholder’s consent for the install qualify in full. The lease and any block-management consent letter should be retained to evidence eligibility if HMRC queries the supply.

The tax point — the date of supply — controls. For installation services that is typically the date of commission and energisation, not the date of quote, deposit or contract. Installs commissioned on or before 30 April 2027 qualify for the 0% rate even if the contract was signed earlier; installs commissioned from 1 May 2027 onward are standard-rated at 20%.

Yes. BTL stock is residential accommodation and the relief applies. The landlord is the customer for VAT purposes — the invoice is raised in the landlord’s name with the zero rate. This is one of the strongest financial cases for a landlord-funded solar install before the 1 May 2027 cliff.

No. Pure commercial premises — offices, retail, warehouses, factories — fall outside the residential ESM relief and are charged at standard 20% VAT. Commercial PV is still attractive on payback grounds (faster business-rate amortisation and capital allowances) but does not benefit from the 0% rate.

Yes. The relief is applied by a VAT-registered supplier at the point of invoice. A non-VAT-registered sole trader cannot apply zero rate — they do not charge VAT at all, but they also cannot pass through the input VAT they pay on materials. For an installed solar system the VAT-registered route is materially cheaper to the customer while the relief is open.

No. The 0% rate is applied by the supplier at the point of supply. If the invoice was raised at the standard 20% rate the relief cannot be claimed back by the customer afterwards. Domestic customers are not VAT-registered and have no reclaim mechanism. The relief only works if applied correctly on the original invoice.

The standard 20% VAT rate returns on the same materials and same labour. A 4kWp solar install with a 9.5 kWh battery moves from approximately £10,290 (0% VAT) to £12,348 (20% VAT) — a £2,058 increase on the same scope. No replacement relief has been announced. We expect a brief surge in installer demand through Q1 2027, which will further pressure pricing and lead times.