The Government will reduce the VAT rate to zero on the installation of domestic energy saving measures. In his Spring Statement the chancellor, Rishi Sunak,said homeowners having materials like solar panels, heat pumps, or insulation installed will no longer pay five per cent VAT. Wind and water turbine installations will also be zero rated.

“A family having a solar panel installed will see tax savings worth £1,000,” Mr Sunak said. “And savings on their energy bill of over £300 per year.”

The National Federation of Builders has welcomed the announcement which it said will help to incentivise homeowners to invest in improving the energy efficiency and performance on their homes.

NFB chief executive Richard Beresford said: “The NFB, along with many others in the industry, has repeatedly, over many years, called on the Treasury to remove the VAT on measures which improve energy efficiency. To us it always seemed like a ‘no-brainer’ to help incentivise the public to ‘green’ their homes and meet our country’s Net Zero ambitions and today we can finally welcome the decision the Chancellor has taken, it is long overdue but at last it is here.”

23 March 2022