That’s when 0% VAT on installing solar panels, home batteries and heat pumps comes to an end. From 1 April 2027, the rate goes up to 5%, according to HMRC’s guidance (opens in a new tab).
The Budget on 28 October didn’t extend it, so the deadline stands. Here’s what the change will cost you, which date actually counts and why leaving it until March is a gamble.
The change
What’s Changing on 1 April 2027?
Since April 2022, installing energy saving equipment in homes has been zero-rated for VAT. That includes the main things we install:
- Solar panels
- Home batteries, including a battery added to an existing solar system (these were brought into the scheme in February 2024)
- Air source heat pumps
From 1 April 2027, all of these go back to the reduced rate of 5%. That’s well below the standard 20%, but it’s still money you don’t need to spend.
Not the same thing
Don’t Confuse It With VAT on Your Electricity Bill
There’s been another VAT change in the news. The government took VAT off household electricity bills from 1 October 2026, and the Budget (opens in a new tab) extended that cut until July 2027.
That’s a separate measure. It lowers the price of the electricity you buy from the grid; it does nothing to the VAT on installing solar panels, a battery or a heat pump, which still rises on 1 April 2027.
The cost
How Much Will 5% VAT Add?
Here’s the difference on our typical prices for a solar-only system:
| System size | With 0% VAT (until 31 March 2027) | With 5% VAT (from 1 April 2027) | Extra cost |
|---|---|---|---|
| 3 kWp (6 panels) | £4,500 | £4,725 | £225 |
| 4 kWp (8 panels) | £5,500 | £5,775 | £275 |
| 5 kWp (10 panels) | £6,000 | £6,300 | £300 |
| 6 kWp (12 panels) | £6,500 | £6,825 | £325 |
Add a battery and the gap widens. The rule of thumb is simple: every £10,000 of qualifying work will cost an extra £500 from April.
Those sums won’t make or break the decision on their own. But there’s no reason to hand them over if you’re planning to go ahead anyway.
The tax point
Which Date Counts: Your Order or Your Installation?
This is the bit that could catch people out. Accepting a quote or signing a contract doesn’t lock in 0% VAT.
For VAT purposes, an installation normally counts as taking place when the work is finished. HMRC calls this the ‘tax point’, and its VAT guide (opens in a new tab) sets out the rules. If your system is fully installed by 31 March 2027, the whole job is zero-rated.
What about deposits? Under HMRC’s rules, a payment made before the work is finished usually creates its own tax point for the amount paid. So in principle, a March deposit could be zero-rated even if the installation slips into April, with the balance charged at 5%.
But that isn’t guaranteed. When VAT changes, the law lets the business doing the work choose to charge the rate in force when the job is actually carried out, as HMRC’s manual (opens in a new tab) sets out.
Timing
Why “Before 31 March” Really Means Sooner
Five months sounds like plenty of time. But a solar installation isn’t something you can arrange for next week:
- The survey: We look at your roof, its direction and any shading, along with your wiring and how you use electricity.
- The design and quote: You get an itemised price, and time to think it over.
- Approval from the network operator: Smaller systems can be fitted and reported afterwards. Larger ones, and many set-ups with a battery, need the local network operator’s approval before they’re switched on, and the industry process allows up to 45 days for a response (although some combined solar and storage installations have a faster route).
- Installation day: Booked around the weather, which in winter doesn’t always cooperate.
Christmas takes a chunk out of December, too. And if you wait until March, you’ll be competing for installation dates with everyone else who has left it late.
Is winter a bad time to have panels fitted? Not at all. A system installed in December or January is ready and waiting for the spring, when output climbs quickly. Our article on solar panels in winter explains what to expect from the darker months.
Off-gas homes
A Double Deadline for Oil and LPG Homes
If your home is heated by oil or LPG and isn’t connected to mains gas, 31 March 2027 matters for two reasons.
It’s also the end of the extra £1,500 on the Boiler Upgrade Scheme. Until then, GOV.UK (opens in a new tab) lists £9,000 towards an air source heat pump for off-gas homes in England and Wales, rather than the standard £7,500.
Much of rural Devon and Cornwall is off the gas grid, so for many households here, getting a heat pump in before the end of March means benefiting from both. Our guide to the £9,000 heat pump grant for oil and LPG homes explains who qualifies.
Book early
Get Ahead of the Deadline
“Five months goes by quickly, especially with Christmas in the middle. If you’re weighing up solar, a battery or a heat pump, get the survey booked now, so there’s time to have everything installed well before the end of March.”
We install solar panels, home batteries and air source heat pumps across Devon, Cornwall and Somerset. Book a free survey and we’ll give you an itemised quote, with an installation date before 31 March 2027.
For the background on the relief, read our full guide to 0% VAT on solar and batteries. And if you’d rather spread the cost, finance is available.
Book your free survey or call us on 01752 916 013.
Your questions answered
0% VAT Deadline FAQs
When does 0% VAT on solar panels end?
On 31 March 2027. From 1 April 2027, installing solar panels, batteries and heat pumps in homes will be charged at 5% VAT.
Does paying a deposit before April lock in 0% VAT?
Not necessarily. A deposit made before 1 April 2027 can usually be zero-rated for that amount, but installers can choose to charge the rate in force when the work is done. The safest way to get 0% on the whole job is to have it installed by 31 March 2027.
Can I get 0% VAT on a battery for my existing solar panels?
Yes. Since February 2024, home batteries have qualified for 0% VAT, including one added to an existing solar system. The relief ends on 31 March 2027.
Did the Budget extend 0% VAT on solar panels?
No. The 28 October 2026 Budget extended 0% VAT on household electricity bills to July 2027, but the relief on installing solar panels, batteries and heat pumps still ends on 31 March 2027.