Politics · United Kingdom · 9 hrs ago
UK plans to restore VAT on home heat pumps and solar panels in April
The UK government plans to restore 5% VAT on home clean-energy systems from 1 April, ending an exemption for heat pumps, solar panels and batteries.
Demand for these upgrades has reached record levels as gas prices have risen and household energy bills have climbed.
Industry groups warn that the deadline could prompt a rush to book installations before April, putting pressure on installers and supply chains.
The Liberal Democrats say a household installing an air-source heat pump, solar panels and a battery could face up to £1,530 in extra costs if the exemption ends.
The change may also increase the cost of government-backed low-interest loans for home energy upgrades.
Industry groups are asking ministers to reverse the plan and clarify how the tax will apply to installations booked before the deadline but completed later.
The government has not said it will change course, so households and installers are waiting for more details.
The UK plans to end the 5% VAT exemption for home heat pumps, solar panels and batteries from 1 April.
Industry groups and the Liberal Democrats warn the change could raise costs and prompt a rush to book installations before the deadline.
The Liberal Democrats estimate that a household installing an air-source heat pump, a 4KW solar system and a home battery could face an extra £1,530.
Demand for home energy upgrades has reached record highs across the UK, according to the Guardian.
Industry representatives say they want clarity on how the change will affect installations booked before April but completed later.
- Who
- The UK government plans the VAT change. Industry groups and the Liberal Democrats oppose it.
- What
- The government plans to restore 5% VAT on home heat pumps, solar panels and batteries.
- When
- From 1 April. The article was published on 9 November 2026.
- Where
- The UK.
- Why
- The government’s reason is not stated. The article says the change could save the government money.
UK government
Industry groups and the Liberal Democrats
Policy
UK government
Plans to end the 5% VAT exemption on home heat pumps, solar panels and batteries from 1 April.
Industry groups and the Liberal Democrats
Say the change could raise costs and undermine efforts to encourage clean energy.
Impact
UK government
The article says the change could save the government money.
Industry groups and the Liberal Democrats
Warn it could cause a rush of applications before April, disrupt installers and make costs less predictable for consumers.
Demand for home energy upgrades reached record highs across the UK as gas market prices doubled across Europe.
The Guardian reported the planned end of the VAT exemption and concerns about its effects.
The planned VAT change is due to take effect.
- VAT rate
- 5%
- Planned start date
- 1 April
- Potential extra cost
- Up to £1,530 for a heat pump, 4KW solar system and home battery
- Demand
- Record highs across the UK
- Electricity bill VAT relief
- Zero-rated until July next year
What people are saying
It is total policy madness for the government to strip VAT from electricity bills with one hand, only to slap it straight back on to heat pumps with the other.
creating a rush of applications ahead of April, disrupting the supply chain and making the process less predictable for consumers.
With domestic electricity bills now zero-rated until July next year, saving energy will be taxed more heavily than consuming it – a perverse incentive.