VAT on renewables remains at 5%

As no doubt you are aware in January 2011 VAT is set to rise to 20%.  However the VAT on a renewable energy installation will remain at the discounted level of 5%.  It was rumoured that the VAT on renewables would rise to 6% but we can confirm that it will remain at 5% next year.

Installation of any of the following qualifies for the lower rate of VAT:

  • controls for central heating and hot water systems
  • draught insulation (eg around windows and doors)
  • insulation on walls, floors, ceilings, lofts, etc
  • solar panels
  • wind turbines
  • water turbines
  • ground-source heat pumps
  • air-source heat pumps
  • micro combined heat and power units
  • wood-fuelled boilers

For further information visit the HMRC website.

James Eades

By: James Eades

Operations Director, James Eades is EnergyMyWay's in-house expert on renewable energy policy, microgeneration technologies and best practice in the renewable energy industry.