If you’re considering solar panels for your home in Perth, Scone, Bridge of Earn, Blairgowrie, Crieff or Kinross, the VAT rate is worth factoring into your plans. Under current rules, qualifying residential solar installations are charged at 0% VAT until 31 March 2027. From 1 April 2027, the rate is scheduled to return to 5%.
That is a change to the tax on the installation, not a reason to rush into a decision. But if solar is already on your list, understanding the deadline, and allowing time for a survey and installation, can help you plan with fewer surprises.
What does 0% VAT on solar panels mean?
The 0% rate means you do not pay VAT on a qualifying solar installation in your home during the temporary relief period. In Great Britain, including Scotland, it has applied since April 2022.
This is a zero rate, rather than a VAT exemption. In practical terms, a qualifying installer supplying and fitting solar panels to a residential property should apply 0% VAT to the eligible work and equipment. The rules also cover associated solar equipment such as cabling, control panels and inverters.
The relief is for residential accommodation, including houses and flats. It applies to the installation itself, and to equipment supplied by the business that installs it. If you buy panels separately from a retailer, that equipment purchase does not automatically qualify for the same treatment; ask the installer how VAT will be handled across the separate supplies.
For the detail, see HMRC’s guidance on VAT for energy-saving materials.
When does 0% VAT on solar end?
Under current rules, the temporary 0% rate runs until 31 March 2027. From 1 April 2027, qualifying residential installations are scheduled to revert to the reduced rate of 5% VAT.
The important detail is that simply requesting a quote or booking a job before the deadline may not guarantee that 0% VAT will apply. The VAT treatment depends on the timing and circumstances of the supply. If your installation is planned around the changeover, ask your installer to confirm in writing which rate they expect to apply and what date matters for your contract.
For homeowners in Perthshire considering a winter or spring installation, it is sensible to start enquiries early. Survey availability, the suitability of your roof and the installation schedule all need to be considered. This is particularly useful if you live outside a larger town, where coordinating a site visit and installation may take extra planning. It is not a reason to compromise on a proper survey or choose a system that is not right for your home.
How much more could solar cost after March 2027?
After the deadline, the change is expected to be a 5% VAT charge on the qualifying supply and installation cost. It is not a sudden increase of 5% on the value of the entire home or on future energy bills.
As a simple illustration, if the pre-VAT cost of a qualifying installation were £8,000, 5% VAT would add £400, making the total £8,400. This is only an example: actual system prices vary, and your final quote may include different items or work with different VAT treatment.
Check whether a quote is before or after VAT, what it includes, and whether any additional building work is priced separately. Comparing like-for-like quotes is more useful than comparing headline prices alone.
Does 0% VAT cover battery storage?
Qualifying electrical battery storage installed in residential accommodation is also covered by the temporary 0% rate until 31 March 2027. HMRC includes batteries fitted with a solar system, batteries added later to store electricity generated by solar, and certain standalone batteries that store electricity from the grid.
When solar panels and a battery are installed together as one package, the battery will normally be treated as part of the qualifying installation. The VAT treatment can depend on the exact equipment and how the work is supplied, so confirm it with your installer. Particularly if the battery is being fitted separately or at a different time.
Explore Herofix’s solar panel and battery storage options.
Can you combine 0% VAT with funding or a loan?
VAT relief is not a grant or discount paid to you. It is the rate of VAT applied to a qualifying installation. Other funding routes have their own eligibility rules and may affect how a project is arranged, so do not assume that different offers can always be combined.
Herofix’s available grants and funding page outlines its funded-solar programme for households that meet the stated criteria, including having someone aged 65 or over or a child under five in the household, and household earnings under £31,000. The page also outlines the Warm Homes Loan route. Check the current terms and availability directly, and ask how VAT is treated in your particular offer.
A loan can help spread the cost, but it is borrowing that needs to be repaid. If you are considering a Scottish Government loan, check the live eligibility and eligible measures with Home Energy Scotland before committing to work. Do not assume that a loan will cover a standard solar PV installation.
What about earning money from surplus electricity?
Solar panels may generate more electricity than your home uses at certain times. If you export eligible surplus electricity to the grid, you may be able to receive payments through the Smart Export Guarantee (SEG).
SEG tariffs and terms are set by individual suppliers, and payments depend on how much electricity you export. They are not guaranteed savings or a fixed return. A battery can store some surplus electricity for later use, but whether one is worthwhile depends on your home, usage and system design.
Planning a solar installation in Perthshire
For homeowners in Perth, Scone, Bridge of Earn, Blairgowrie, Crieff, Kinross, Dunkeld, Aberfeldy and Highland Perthshire, the best first step is a property-specific assessment, not a decision based only on the VAT deadline.
A survey can help establish whether your roof is suitable, what system size may fit, and whether a battery makes sense for your household. Ask for a written quote that sets out the equipment, installation work, VAT rate and any finance or funding arrangements. If you are aiming for an installation before April 2027, check the survey and installation lead times early, and confirm how the installer will determine the applicable VAT rate.
Commercial properties can have different VAT treatment from residential homes. If the property is used for business, has mixed use, or your circumstances are unusual, confirm the position with your installer or a tax adviser.
To discuss a survey or quote, visit Herofix’s quote page.
FAQs
Qualifying solar panels supplied and installed in residential accommodation in Scotland are currently charged at 0% VAT under the temporary relief. Buying panels separately without installation may be treated differently.
Under current rules, the 0% rate ends on 31 March 2027. The reduced rate of 5% is scheduled to apply from 1 April 2027.
Qualifying electrical batteries installed in residential accommodation are covered until 31 March 2027. This can include batteries fitted with solar panels, retrofitted solar batteries and some standalone batteries. Check the treatment of your specific installation with your installer.
For a qualifying residential installation, the rate is expected to return to 5%. For example, 5% on a pre-VAT installation cost of £8,000 would be £400. Actual VAT depends on the price and what the quote includes.
Possibly, but the schemes and VAT rules are separate. Funding eligibility and how the installation is supplied can affect the arrangement. Ask the funding provider and installer to confirm in writing whether your specific offer can be combined with the 0% VAT rate.
