Increasing the rate of VAT on solar photovoltaic and solar thermal in the UK would add £900 to the cost of a typical residential solar PV installation, according to the Solar Trade Association.
The UK government are consulting on increasing VAT for solar to 20% from the current rate of 5%.
STA argues that fitting solar panels to homes is justified at a 5% rate of VAT because the technology should be treated the same as other energy saving measures in homes.
The government is consulting on issue following a European Court of Justice ruling in June last year that said the reduced rate is illegal under the EU’s VAT Directive.
STA says that solar, together with wind and hydro, are only three out of 11 energy saving measures that have been singled out for the VAT change by the UK government.
Image: sxc
