Home battery costs
Do you pay VAT on a home battery in the UK? (0% VAT rule)
Home batteries are becoming increasingly popular in the UK, but the price of a system depends on more than just the battery itself. VAT can also make a noticeable difference to the total cost.
At the moment, qualifying home battery installations can benefit from a 0% VAT rate, which means you do not pay VAT on the battery and installation when the conditions are met. In this article, we explain when the 0% VAT rule applies, when you still have to pay VAT, what will change after March 2027 and what this could mean for the cost of a home battery.
The short answer
A professionally supplied and installed home battery can currently qualify for 0% VAT in the UK. If you buy a battery separately and install it yourself, you will normally still have to pay VAT. The current 0% rate is scheduled to end on 31 March 2027.
How can you get 0% VAT on a home battery?
To benefit from the 0% VAT rate, the home battery needs to be supplied and installed as part of an installation by a professional. In most cases, this means you cannot simply buy a battery yourself and expect the zero VAT rate to apply. The installer normally supplies the battery and includes the installation in the same package.
The battery does not have to be installed together with new solar panels. You can also qualify if the battery is added to an existing solar panel system. A standalone home battery can also be eligible, even if you do not have solar panels at all.
The 0% VAT rate applies to qualifying residential installations across the UK, including England, Scotland, Wales and Northern Ireland. The main thing to remember is that the battery should be part of a professional installation package rather than bought as a separate product for self-installation.
When do you have to pay VAT for the battery?
The 0% VAT rule does not apply in every situation. For example, if you buy a plug-in home battery and install it yourself, you normally cannot benefit from the zero VAT rate. This is because the battery is purchased as a standalone product rather than as part of a professional installation.
However, plug-in batteries have other advantages. They are usually much easier to get started with because you can install them yourself, without needing an electrician or professional installer. This also means you avoid installation costs, and plug-in batteries are often cheaper to buy than a fully installed system. The downside is that you will usually have to pay VAT on the battery itself.
Professional installation vs self-installation
A professionally supplied and installed battery may qualify for the 0% VAT rate. A plug-in battery purchased as a separate product for self-installation normally does not.
From April 2027
What happens to the 0% VAT rule that’s currently in place on March 31 of 2027?
The 0% VAT rule was introduced by the UK government to make qualifying energy-saving measures more affordable for households. It temporarily reduced the VAT rate on the installation of certain energy-saving materials from 5% to 0%.
The current 0% VAT relief is scheduled to remain in place until 31 March 2027. From 1 April 2027, qualifying installations are expected to return to the reduced VAT rate of 5%. This means that eligible home battery installations and other qualifying energy-saving measures would no longer be completely VAT-free, although they would still be taxed at a much lower rate than the standard 20% VAT rate.
In practice, this means professionally installed home batteries could become slightly more expensive from April 2027 onwards. For homeowners already considering an installation, completing it before the end of March 2027 could benefit you financially.
0%
Current qualifying rate
Until 31 March 2027
5%
Reduced rate
Expected from 1 April 2027
20%
Standard VAT rate
The normal UK VAT rate
Why is the 0% VAT rule disappearing?
The 0% VAT rate was introduced as a temporary measure, instead of a permanent change to VAT. The UK government introduced the 0% rate in 2022 to make energy-saving improvements more affordable and encourage more households to invest in technologies such as solar panels. Home battery installations were later added to the list of qualifying energy saving materials from February 2024.
From the start, the 0% rate was scheduled to run only until 31 March 2027. Unless the government decides to extend the rule, qualifying installations will automatically return to the reduced 5% VAT rate from 1 April 2027. This does not mean that the government is removing the VAT benefit completely. Home batteries that meet the conditions will still receive a lower rate than the normal 20% VAT rate; the temporary extra reduction from 5% to 0% is just due to end.
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