VAT cut to 0% on energy saving materials

Posted by Andi

Chancellor Rishi Sunak announced that VAT on energy-saving materials such as Solar Panels and Heat Pumps is being reduced from 5% to 0%. The change will take effect from 1st April 2022 and last for five years.

Why has the VAT been cut?

With the recent developments between Russia and Ukraine as well as the energy price cap increase, energy security and the need for more renewables has been thrust even more into the spotlight. 

0% VAT on Solar

Sunak said “As energy costs rise, we know that energy efficiency will make a big difference to bills. But if homeowners want to install energy-saving materials, at the moment only some items qualify for a five per cent VAT relief and there are complex rules about who is eligible.”

How much could it save?

From April 2022 a typical family having solar panels installed will save more than £1,000 in total on installation, and then £300 annually on their energy bills. This 0% VAT saving also applies to Air Source Heat Pump installations, so there is no better time to upgrade the way you heat your home and pay less for the energy you need to do so.

With energy bills soaring act now to start generating your own electricity at an affordable price plus install a more energy-efficient heating system in your home.

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