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VAT and Solar

VAT and Solar

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My client is considering having solar panels installed and is expecting to produce about £7kpa of income.

Is there any VAT chargeable on this and is it payable to HMRC.

My client is already VAT registered.


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07th May 2015 16:38


What is the nature of the income? (Generation tariff or export tariff)

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07th May 2015 16:53

A few of the generating companies produce self billing invoices which should show the vat on it where applicable

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07th May 2015 17:08

The Feed in Tariff is outside the scope of VAT.

The Export Tariff is subject to VAT where the electricity is supplied by a VAT registered entity.  Eon, for example, do self billing arrangements and their documents can be googled,


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08th May 2015 12:16

thanks nautical

The income is a mix of feed in and export but only at weekends because they use all of the generated power during the week

i assume that it will be at the 5% rate subject to volume?


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08th May 2015 14:36

You misunderstand and should really read it up.

The Feed in Tariff (FIT) is paid for what you generate. It does not matter whether you then use that generated electricity or export it, you get paid for generating it.

The Export Tariff is paid on what you export, in principle.  Unless you are talking of a large commercial installation >30 kW, then the actual export is not measured it is 'deemed' to be half of what you generate.

So normally, you have installed one 'total generation meter' from which the FIT and Export tariff are both calculated. VAT self billing arrangements then apply where appropriate on the Export tariff.

So the weekday/weekend issue only becomes a factor on large  >30 kW installations.  For comparison, a standard domestic installation is 4 kW.

Whether VAT is 5% or 20% depends on domestic/residential/business factors all covered in the HMRC docs

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08th May 2015 14:44

salesmans schedules

I am already reading up further on this.

My question simply related to is VAT chargeable?

The reason for splitting the income out in the way i did in the question was because that is how it has been portrayed by the solar salesman, who i will be discussing things with at length...

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10th Dec 2018 07:13

I understand you only pay 5% VAT on the Solar panels and batteries purchased at the same time as the panels.

Do you know if I also install a Airsource heat pump to heat a swimming pool and also a new hot water tank at the same time as the solar installation do I only pay 5% not 20% on the hardware and install costs?

Many thanks.

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