VAT reduction on Solar Panels

National press reported Sunday that the government intends to reduce VAT on the sale and installation of solar panels. VAT is currently charged at a rate of 13.5%. This saving will reduce the time it will take to recover the costs of your solar panel installation. Press coverage reports that this will reduce payback time from 7 years to 6 years.

While if true, this news is welcome, after many years of lobbying, an official announcement from government clarifying the details of when and how the change will take affect has not been made. Will the reduction only be for the panels? What about the batteries, the inverter and the mounting rails for the panels.

Eliminating 13.5% VAT would reduce the cost of a solar PV installation that costs €11,350 to €10,000. When you add to this the solar panel grant of up to €2400 then the final cost of such an installation will be €7600.

There is now over 50,000 homes with solar panels installed in Ireland and it is hoped this move will help encourage more people to do so.

vat reduction on solar panels

The Minsister for the Environment Eamon Ryan said “This welcome Government move is yet another step on Ireland’s journey to cleaner, cheaper, renewable energy.” He added: “It also comes as we begin our major plans to put solar panels on all of our schools by 2025, starting this summer break”

This move became possible due to recent changes to the EU VAT directive and the reduction in VAT will be introduced in the Spring Finance Bill.

The government is proposing to remove the VAT charged for both the purchase and installation of solar panels. This is great news as according to Eamonn Ryan as it could reduce the cost of a solar panel installation by around €1000. This applies to homes and public buildings.

Thanks to this cost reduction in solar panel installation, there has never been a better time to sign up for a SolarSurvey to find out what the potential of your home is for generating electricity.

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