For many people looking at solar energy systems – domestic or commercial – the financial side is very confusing. Over the past twenty years schemes have been introduced, extended, changed, and discontinued. As such, making the jump to solar power feels like a decision where you don’t have all the information you need.
We recently looked at the break-even point for solar panel systems, and the cost effectiveness of their installation is a huge draw for many customers. We’ve always supported our customers in identifying and applying for any solar panel funding relevant to their case. And recently we partnered with credit brokers to provide flexible finance on solar panels. But one topic we haven’t covered is VAT reductions on solar power.
Residential vs. Commercial
To touch on the most important question first, almost all VAT reductions are residential. The exception is that business energy grants are not subject to VAT, so if you can secure a grant for your business you will not pay VAT on the project.
However, for residential projects the VAT rate for a set list of energy saving materials (ESMs) is 0%, and will be until March 2027 (unless extended further). Solar PV systems are included on that list, which means that in Great Britain, supply and installation of PV systems is subject to 0% VAT.
Seizing the Opportunity
Once in place, a solar PV system rapidly starts earning back its costs, as already seen. Reduced costs, whether through a solar business grant or through a 0% VAT rate for residential solar power, obviously help to reach the break-even point more swiftly.
That means the best time to install a new solar system is now, so you can start earning those costs back as soon as possible. To discuss the best solution for your situation, including whether having a solar battery installed would be beneficial, and to get the process started, contact us today. Our mission is to help you harness solar power.