How the 0% VAT on Solar Affects Your Costs in 2025

For Irish homeowners thinking about switching to solar in 2025, there’s good news: the 0% VAT rate on solar panels and installation is still in effect. This means that the upfront cost of going solar has never been more affordable. But what does the VAT exemption actually mean for your pocket, and how does it compare to grants and long-term savings? Let’s break it down.

What Is the 0% VAT Rule for Solar?

In 2023, the Irish Government introduced a 0% VAT rate on the supply and installation of solar panels for private households. Previously, solar installations were subject to the standard 13.5% VAT rate. This tax reduction is designed to encourage more homeowners to adopt renewable energy and lower their electricity bills.

The rule applies to:

• Solar PV panels
• Necessary mounting equipment
• Inverter systems
• Installation and labour costs

It does not apply to solar installations for businesses, where the standard VAT rate still applies.

How Much Can You Save with 0% VAT?

The savings are significant. For example:

• A €9,000 solar PV system with 13.5% VAT would previously have cost €10,215.
• Under the 0% VAT rule, that same system remains at €9,000 - a saving of over €1,200 upfront.

This makes solar more accessible for households who might have been put off by high initial installation costs.

Combined Benefits with SEAI Solar Grants

Alongside the VAT exemption, Irish homeowners can also benefit from the SEAI Solar PV grant, which provides up to €1,800 towards residential solar installations. When combined, these incentives dramatically lower the cost barrier:

• Without support: €9,000 system
• With SEAI grant: €7,200
• With 0% VAT applied: still €7,200, but without hidden tax add-ons

This combination often reduces payback periods to between 5 and 7 years for most Irish households.

How Does This Impact Long-Term Solar ROI?

The 0% VAT change doesn’t just make installation cheaper. It also improves long-term return on investment (ROI). With lower upfront costs, your system pays for itself faster through:

• Reduced electricity bills (30–50% lower on average)
• Savings from using self-generated solar power instead of grid electricity
• Income from exporting excess electricity back to the grid via the Clean Export Guarantee (CEG)

Will the 0% VAT Continue Beyond 2025?

As of now, the VAT reduction remains in place for 2025. While no end date has been confirmed, renewable energy incentives are a core part of Ireland’s climate policy, so it’s expected the exemption will remain for the foreseeable future.

Should You Install Solar in 2025?

If you’ve been waiting for the right time to install solar, 2025 is one of the best years to do it. With both the 0% VAT and SEAI grant available, Irish homeowners are getting maximum financial support to reduce energy bills, future-proof their homes, and lower carbon emissions.

At WattCharger, we handle everything from grant applications to expert installation, so you can take full advantage of today’s incentives with minimal hassle. Contact us using the form below for your quote.