Rates at a glance
| Work or supply | Rate |
|---|---|
| Installation of qualifying energy-saving materials in residential accommodation, until 31 March 2027 | 0% |
| The same installation from 1 April 2027 | 5% |
| Installation in a building used solely for a relevant charitable purpose, until 31 March 2027 | 0% |
| Energy-saving materials supplied without installation | 20% |
| Installation in a commercial building | 20% |
| Products that are not on the qualifying list | 20% |
The rate for your project depends on its facts. Each line of a quote is rated on its own.
Does yours qualify?
The headline tests. All of them have to hold.
- The product is a qualifying energy-saving material, such as insulation, draught stripping, heating and hot water controls, solar panels, heat pumps, micro combined heat and power units, wood-fuelled boilers, wind and water turbines, or batteries.
- The supplier installs it, because the relief is for installation with the materials included.
- The building is residential accommodation, or is used solely for a relevant charitable purpose.
Plus 2 further points we test. These are the ones that are easy to miss, and any one of them can change the answer. A qualification report works through every one against your documents.
About the qualification reportWhere projects go wrong
- Buying the kit yourself. Panels, batteries or a heat pump bought on a supply-only basis are 20%, whoever fits them afterwards.
- Installing in a commercial building. Offices, shops and other business premises are outside the relief.
We check for 4 more pitfalls on every project of this kind. Most only come to light once the work has been invoiced, which is the expensive time to find them.
What it can be worth
An energy upgrade to a semi-detached house
In 2026 an installer quotes £32,100 before VAT for an energy upgrade to an occupied semi-detached house. The owner adds a bathroom replacement to the same order, and asks for two spare panels to fit to a garden building later.
| Item | Net | Rate | VAT |
|---|---|---|---|
| Solar panels, supplied and installed | £7,200 | 0% | £0 |
| Battery storage, supplied and installed | £4,800 | 0% | £0 |
| Air source heat pump, supplied and installed | £11,500 | 0% | £0 |
| Heating and hot water controls, supplied and installed | £900 | 0% | £0 |
| Loft insulation and draught stripping, supplied and installed | £1,900 | 0% | £0 |
| Two additional solar panels, supplied only | £600 | 20% | £120 |
| Replacement bathroom suite, supplied and fitted | £5,200 | 20% | £1,040 |
| Total | £32,100 | £1,160 |
- VAT if quoted at 20% throughout
- £6,420
- VAT rated line by line
- £1,160
- Difference
- £5,260
An example to show how the rates fall on an installation supplied before 1 April 2027. It is not a figure for your project.
How we help with energy-saving installations
We establish which items in your quote are installations of qualifying energy-saving materials and which are ordinary building work at the standard rate. You get a clear answer on whether each installation qualifies, with the reasoning written down so the installer or builder can see the basis for each rate. Where the rest of the job is correctly 20%, we say so.
A line-by-line analysis then gives you the right rate for each part of the quote and a letter for your installer or builder. It is best done before you agree the price, particularly if the work may run past 31 March 2027. Our guide to VAT on solar panels and heat pumps covers the common cases. To start, send us your quote.
Questions
Is there VAT on solar panels?
Solar panels installed in a home are zero rated until 31 March 2027, and from 1 April 2027 the rate is 5%. Both rates depend on the supplier installing the panels. Panels bought on a supply-only basis are 20%.
Is there VAT on heat pumps?
Air source and ground source heat pumps installed in a home are zero rated until 31 March 2027, then 5%. Water-source heat pumps have qualified since 1 February 2024. As with every energy-saving material, the lower rate is for installation, not for the unit bought on its own.
When does the 0% VAT rate on energy-saving materials end?
On 31 March 2027. From 1 April 2027 installations of qualifying energy-saving materials in residential accommodation return to the 5% reduced rate. If your project runs across that date, check which rate applies to each stage before you agree the price.
Based on the Value Added Tax Act 1994 and HMRC's published guidance. This page explains how the rules work in general. It is not advice on your project, and no rate applies until the facts have been analysed.
