Is VAT on Solar Panels Going Up? What the 2026 Budget Means for Solar, Batteries, Heat Pumps and EV Charging (Essex 2026)
Yesterday's Budget (28 October 2026) contained one line that matters to anyone in Essex thinking about solar panels, a home battery or a heat pump: the 0% VAT rate on energy-saving materials installed in homes will end, with the reduced rate of 5% applying from 1 April 2027. This guide explains what was announced, what it means for homes in Thurrock, Stanford-le-Hope, Corringham, Upminster and across Essex, and what else in the Budget affects your bills. It is accurate as of 29 October 2026.
Is VAT on solar panels and batteries going up?
Yes. The Budget document confirms the government will "revert to reduced rate on energy saving materials (ESMs) as planned", meaning the 5% rate applies from 1 April 2027 when the materials are installed in residential accommodation and charitable buildings. Until then, the temporary 0% rate continues.
Energy-saving materials include solar panels, battery storage and heat pumps, among others. Solar Energy UK says consumers currently pay no VAT on home solar and battery installations, and that this will rise to 5% from 1 April. The trade body has criticised the change and says it will urge the government to reverse course, but as of today the change is planned.
The Budget also adds heat batteries to the list of materials that qualify for the 5% rate from 1 April 2027.
Should I install solar or a battery before April 2027?
If you were already planning solar panels or a battery, installing while the 0% rate applies avoids the 5% VAT that would apply afterwards. Exactly how VAT is applied to a job that is booked, paid for or completed close to the change depends on HMRC's rules, so ask your installer to confirm the VAT position in writing before you commit.
Bear in mind that surveys, design, any network operator notification and installation all take time, and demand is likely to rise in the run-up to April. Starting early gives you a better chance of the work being completed while the 0% rate still applies. WinSolar, our solar and battery service, offers free surveys. Find out more on our solar panel and battery installation page.
Does the VAT change affect businesses?
The 0% and 5% reduced rates for energy-saving materials apply to residential accommodation and charitable buildings, not to most commercial premises. If you run a business in Essex and are considering solar, a battery or EV charging, speak to your accountant about the VAT position. See our commercial electrician page for the work we do for businesses.
What did the Budget say about heat pumps?
The government says it "remains committed to heat pump deployment" and will keep the Boiler Upgrade Scheme at its current funding level of £400 million in 2027-28, rising broadly in line with inflation after that. Solar Energy UK notes this is a reduction on previous commitments. Grants are issued while funding lasts, so check GOV.UK for current grant amounts and eligibility. The Budget also points to the Warm Homes Loan Scheme, launched on 27 October, which offers no- and low-interest loans for solar, batteries and heat pumps. We explained it in our guide to the Warm Homes Loan.
Heat pumps count as energy-saving materials too, so the move to 5% VAT from 1 April 2027 applies to them as well. Read more on our heat pumps and air conditioning page.
What does the Budget mean for my electricity bill?
The main household measures announced were:
the temporary 0% VAT on household electricity in Great Britain is extended to July 2027, which the government expects to take around £50 off the annual Ofgem price cap in April 2027
a £100 Household Energy Payment, paid directly into bank accounts from January 2027, for households in England in council tax bands A to D
a request for Ofgem to abolish gas standing charges and move them onto unit rates, with electricity standing charges to be reformed and details due next year
Solar Energy UK points out that with electricity bills zero-rated and solar and batteries moving to 5%, saving energy will soon be taxed more heavily than using it.
Will EV charging get cheaper?
From spring 2027, the government will provide £100 million over two years to cut charging costs at local, lower-powered public chargers, which it says will save drivers who rely on them around £150 a year. It will also set up a taskforce to explore letting drivers use their cheaper home energy tariff at some public chargers. For most drivers with off-street parking, a home charger on a suitable tariff is still likely to be the cheapest way to charge. CPW is a certified Tesla installer for Wall Connector chargers and Powerwall batteries. See our EV charger installation page.
FAQ
When does VAT on solar panels go up?
The Budget confirms the 5% reduced rate will apply to energy-saving materials installed in homes from 1 April 2027. Until then, the 0% rate applies.
Does the VAT rise apply to batteries and heat pumps?
Yes. Batteries and heat pumps are energy-saving materials, so the same change applies. Heat batteries are being added to the list.
Is there still a heat pump grant?
Yes. The Boiler Upgrade Scheme continues, with £400 million of funding in 2027-28. Check GOV.UK for current grant amounts.
Who installs solar and batteries in Thurrock?
CPW Electrical Solutions LTD is a Thurrock-based electrical contractor, NICEIC Approved (607863000) and MCS certified (NIC602214), with £2m public liability and £300k professional indemnity insurance. See the areas we cover.
Plan your installation before April
Call 07545 571230 (answered 7am to 7pm; 24-hour emergency call-outs also available) or request a quote. If you are unsure whether your wiring is ready for solar, a battery or a heat pump, an electrical inspection and test can flag problems early.
Information is accurate as of 29 October 2026 and can change. Sources: GOV.UK Budget 2026 (28 October 2026), Solar Energy UK (28 October 2026) and GOV.UK "Cutting electric vehicle charging costs" (28 October 2026). Always check current VAT, grant and scheme rules before you commit.
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