5% VAT

You will pay 5% VAT if:

• The cost of materials is less than 60% of the total installation cost.

• You are over 60.

• You receive certain benefits.

• Your building is a housing association, care home, children’s home or hall of residence.

These rules apply to batteries when they are installed along with solar PV (ie both are included in the 60% materials cost condition). When batteries are retrofitted, the VAT will remain at 20% regardless.

Just to make it even more complex, the 5 or 20% VAT applies to the materials part of the installation cost, while the labour part will remain at 5% VAT.