If you're trying to decide between booking solar now or waiting another year or two, the most concrete change to factor in is the VAT shift on 1 April 2027. Here's what it actually does to typical install pricing, and why "VAT will be back at 5%" isn't quite the same conversation as "VAT will be back to 20%" — which it isn't.
What ends, what doesn't
On 1 April 2027, the 0% rate on qualifying domestic energy-saving materials reverts to 5%. The full 20% rate does not return. Solar, batteries, heat pumps and insulation all stay in the reduced-rate bracket — they just lose the temporary 0% boost.
Like-for-like cost comparison
Identical 2026-spec installs, priced before and after the VAT change. These assume install prices stay flat (which they may not — panel prices could keep softening, or installer costs could rise; treat as the VAT-only delta):
- 4kW solar only: £7,500 (today) → £7,875 (April 2027)
- 4kW + 10kWh battery: £11,500 → £12,075
- 6kW + 10kWh + smart EV charger: £14,500 → ~£15,100 (charger separately rated)
- Heat pump + 8kW solar: £20,000 → £21,000
A few hundred to roughly a thousand pounds depending on system size. Significant for any household, but not the difference between a sensible decision and a foolish one.
Don't fall for the lock-in trick
HMRC sets VAT based on the tax point — the install commissioning date, not the contract or deposit date. Some installers will pitch a "book now to lock in the 0% rate" deal where the actual install lands months into the 5% rate. Legally and practically, you'll be charged at the higher rate. The only way to genuinely bank the 0% rate is to have the system commissioned by 31 March 2027.
The practical decision window
Reputable installers typically run an 8–12 week timeline from design sign-off to commissioned install. Working backwards from 31 March 2027, that means a contract signed by mid-January 2027 is the latest safe window. Slot availability tends to compress sharply in Q1 of any year, so realistically you want your decision finalised by late autumn 2026 if you want the 0% rate.
What this means
If you've already decided solar is on the cards within the next 12–18 months, the VAT change is a real reason to commit earlier rather than later. If you're still 50/50 on whether solar is right for your home, £500 of VAT shouldn't push you into a decision — get the system designed properly first, and worry about timing second.