Do I charge VAT on solar panels for a house?

Not until 31 March 2027. A supply-and-install of solar panels in residential accommodation in Great Britain is zero-rated, covering both the equipment and the labour. From 1 April 2027 the rate becomes 5% unless the relief is extended.

Is a commercial rooftop install zero-rated?

No. The relief covers residential accommodation and buildings used solely for a relevant charitable purpose. Commercial and industrial premises are standard rated at 20%, and so are hospitals, prisons, hotels and inns even though people live or stay in them.

What if I supply the panels but somebody else fits them?

The zero rate applies to the installation of the materials and to the supply of those materials by the person installing them. Selling hardware you are not installing is a separate supply and does not attract the relief on the same basis, so a supply-only sale needs looking at on its own terms.

Can I recover VAT on the panels I buy if my sales are zero-rated?

Yes. Zero rating is not exemption. Your sales carry VAT at 0% and you retain full recovery on your purchases, which is why domestic-focused installers often sit in a repayment position on each return.

Solar trade guidance

VAT on Solar Panel Installation

Written and reviewed by the Solar Installer Accountants editorial team. Last reviewed 22 August 2026.

British rooftop solar panels beside neatly organised VAT invoices and accounting tools

Almost every VAT question a solar installer has comes down to one thing: the rate follows the building, not the job. The same array, fitted by the same crew, in the same week, is zero-rated on a house and standard-rated on a hotel. You are the one who has to work that out, and you have to do it when you quote rather than when the return is due.

This is the rate as it applies to an installer in Great Britain, what the zero rate actually covers, and the buildings where it stops.

The Zero Rate on Domestic Installs

From 1 May 2023 to 31 March 2027, installing specified energy-saving materials in residential accommodation is zero-rated. Solar panels are on that list, and so is qualifying battery storage. The relief is set out in VAT Notice 708/6, which is the document to reach for when a job is not obvious.

Two details matter more than installers expect. The first is that the zero rate covers the supply and the installation together, so the panels, the inverter, the mounting and the labour all sit at 0% when you supply and fit them. Selling panels alone, without installing them, is a different supply and does not get the same treatment.

The second is that a zero rate is not an exemption. Your sales carry no VAT, but you keep the right to recover the VAT on everything you buy to do the work. For a domestic-only installer that usually means the VAT return is a repayment rather than a payment, which is worth reaching deliberately.

Where the Zero Rate Stops

Relief is limited to residential accommodation, and to buildings used solely for a relevant charitable purpose from 1 February 2024. Everything else is standard rated at 20%. That includes commercial and industrial premises, which is the obvious case, but the notice also names two categories that catch people out because the buildings are lived in: hospitals, prisons or similar institutions, and hotels, inns or similar establishments.

So a rooftop array on a care home, a student block run as a hotel-style operation, or a bed and breakfast is not automatically zero-rated because people sleep there. The test is what the building is, and it is worth settling before the quote goes out rather than after the invoice is paid, because you cannot usually go back to a customer and add 20%.

Mixed-use buildings are the genuinely hard case. A flat above a shop, a farmhouse with a working yard, a property that is partly let commercially: these need the reasoning written down at the time, because that is what an inspection will ask to see. This is the part of running VAT for a solar firm that repays getting right once.

Certification Does Not Change the Rate

The zero rate turns on the building and on what you install. It does not turn on your accreditation. An installer without MCS certification charges the same VAT as one with it, because Notice 708/6 sets conditions about the materials and the property, not about the installer.

Certification still matters commercially, and heavily. A solar PV installation up to 50kW has to present an MCS certificate or equivalent before the customer can claim under the Smart Export Guarantee, and most grant routes take the same line. That is a reason to be certified. It is not a VAT reason.

What This Means for Registration

Zero-rated sales are still taxable sales. They count towards the VAT registration threshold of £90,000 in the same way standard-rated ones do, so a busy domestic installer can cross the threshold without ever having charged a penny of VAT to anyone. Plenty do, and find out late.

There is a route the other way. Where most of what you sell is zero-rated, HMRC can grant an exemption from registration, and it is worth asking the question rather than registering by default. Whether you want it is a real decision rather than a formality: staying out of VAT keeps the admin down, and registering lets you recover the VAT on panels, batteries, the van and the tools. For a domestic-only installer buying a lot of hardware, registering is usually the better arithmetic.