In the race to Net Zero the government introduced a few levies, grants and schemes to encourage the public to make changes in their homes.
The most helpful of which has been to reduce the rate of VAT of any energy saving equipment to zero.

What is VAT?

VAT stands for value added tax and current rates in the UK are at 20%.
Generally added to items classed as ‘luxury’ but there are many goods and services that are exempt.
Exemptions include:

  • Insurance, finance and credit
  • Most kid’s clothing
  • Education and training
  • Fundraising events by charities
  • Subscriptions to membership organisations
  • Most food
  • Selling, leasing and letting of commercial land and buildings — this exemption can be waived

And, currently, renewable energy equipment.

VAT on Solar

On 1 April 2022 the UK government announced its 0% VAT on ‘the installation of certain specified energy-saving materials in, or in the curtilage, of residential accommodation in Great Britain until 31 March 2027’.

As with most government schemes, there are many exceptions and a whole of rules to follow but, so long as you have a solar energy system installed, you won’t be paying VAT on it.
But, and it is a big but, if you buy solar batteries that are not part of your installation you will get charged 20% VAT.

This is subject to change and the government are debating dropping the VAT on solar batteries completely.

Other grants

One of the most popular ‘grants’ the UK Government introduced was the Feed In Tariff (FIT), which guaranteed domestic solar energy producers a certain amount of money per kWh from established energy providers.
This wasn’t sustainable at the rates that were set but the contacts were for 20 years, so some people are still benefiting from FIT.
In fact, some businesses are willing to buy and manage FITs from domestic installs.
Below is a quick round up of what’s available right now, but for a more comprehensive guide, check out our solar grants guide.


The SEG, or Smart Export Guarantee, is a scheme in which energy supplies are legally obliged to offer customers cash for their excess energy. 
As it is a legal obligation, but some energy companies don’t want your energy, prices can be as low as 1p per kWh.
Not a great deal when they are selling their energy to you at 24.5p per kWh.
Octopus are offering their customers 15p per kWh, so they are by far the best company to look at.
We suggest investing in energy storage so you can use every kW you make.


One of the remaining grants the UK public can access is The Energy Company Obligation.
This is part of the governments Net Zero commitment and is open to any kind of home improvement that improves the efficiency of your home.
The ECO4 scheme is only open to households living in fuel poverty or your home has an energy efficiency rating lower than ‘D’.

Related posts

Smart Export Guarantee Rates (Updated 2023)

Appliances That Use The Most Electricity

Are Solar Panels Worth It? (UK Edition)

Solar Panel Grants and Government Schemes