Zero VAT on solar panels will save families €1,000 - Daly

Fianna Fáil Senator Paul Daly has said the new zero VAT rate on solar panels will save households an average of €1000 with the upfront cost of installation.

Earlier this week the government approved a report stage amendment brought forward by Minister for Finance Michael McGrath to the Finance Bill 2023. The bill gives legislative effect to the taxation measures recently announced, the purpose of which is to continue to assist families and businesses deal with high energy prices and cost of living challenges.

Senator Daly said: “I'm delighted to see the government taking action to reduce the cost of installing solar panels for households. This zero VAT rate will make a real difference, saving households an average of €1000. It's a smart move towards reducing energy costs and promoting more sustainable energy sources.

“With a reduction of €1000 on the cost of installing solar panels, more and more families will be able to make the switch. It's an important step towards creating a more sustainable and affordable energy system.”

The Department of the Environment, Climate and Communications has estimated that if a zero rate of VAT was passed on to consumers, it would reduce the average cost of the supply and installation of solar panels for consumers from €9000 to €8000 and would thus help households reduce their electricity bills. At €0.32c per KWh, this will reduce the payback period for installation from 7 to 6.2 years.

This is a permanent change and it will come into effect from May 1. The Department of Finance has estimated that the measure will cost €19m annually.