Government to slash VAT on solar panels to zero
Daragh Cassidy
Head Writer

The move could see a typical household save around €1,000 on the cost and installation of solar panels.

When it comes to the transition towards a greener and cleaner future, we all know that we need to play our part. 

However a big problem for many consumers is the cost of things like electric vehicles (Evs), heat pumps and retrofitting. Most EVs can cost a minimum of €20,000 while a deep retrofit could easily set you back tens of thousands. If not more. Households often don’t have this sort of money. 

Solar panels can also involve a significant outlay. But through a combination of grants and now a reduced rate of VAT, the cost is getting more affordable. 

But first a reminder…

What are solar panels?

Many of us often use the term "solar panel" as a catch-all term for solar-generated electricity. 

However there are two types of solar panels that you can install in your home: solar thermal (ST) collectors which just heat water and solar photovoltaic (PV) modules which are used to generate electricity for multipurpose use.

Solar PV panels are the rooftop panels you see on homes and businesses across the country. They turn daylight into free electricity and provide you with free energy to power various appliances in your home. 

And under recent measures by the Government you can also sell any surplus electricity that you generate back into the grid

You can find out more information on solar panels and why you should consider getting them in our in-depth guide here.

What’s happening?

In an effort to reduce the cost of getting solar panels, Green Party leader Eamon Ryan is slashing the rate of VAT on the supply and installation of solar panels from 13.50% to 0%.

It follows the decision last year by the EU to allow member states to reduce VAT on various environmentally friendly products and initiatives.

The zero VAT rating will be implemented in the Finance Bill which is going through the Dáil this week.

It’s forecast that the measure will save a typical household around €1,000.

On top of this, there is a grant of up to €2,400 from the Sustainable Energy Authority of Ireland (SEAI) for the installation of solar PV panels and €1,200 for the installation of solar thermal/water heating panels. You can read more about the grants that are available here

This means the cost for getting panels installed will drop to between €5,000 and €6,000 on average. And the payback period will fall from seven years to around six years.

And as solar panels will last for around 20 years, it means you're looking at around 14 years of largely free use.  

This welcome Government move is yet another step on Ireland’s journey to cleaner, cheaper, renewable energy. It comes on the back of our on-target retrofitting programme and our micro-generation scheme which is seeing thousands of householders signing up to sell their excess renewable energy back to the grid.

Green Party leader, Eamon Ryan

Will the VAT reduction be passed on?

Hopefully. But there's no guarantee.

The fear whenever VAT is reduced is that businesses will just keep the savings and not pass on the reduction. Or at least not all of it. 

This is what happened when the Government reduced the rate of VAT in the hospitality sector from 13.5% to 9%. Hotels and accommodation didn't get cheaper. In fact they even got more expensive! And when the rate of VAT on newspapers was reduced to 0% in the last budget, the price of the Indo or the Irish Times etc didn't go down. 

So it'll be interesting to see what happens here.  

Switch to a cheaper energy deal today

If you're still unsure about getting solar panels, remember there are lots of other ways to save on your energy costs. 

You can start off by switching supplier. It’s quick and easy on Head over to our free energy comparison service to compare the best deals across all energy suppliers nationwide in just a few clicks!

If you’re seeking advice when it comes to switching supplier, make sure you check out our energy Quickstart Guide here. Our guide will equip you with all you need to know to make the switch. 

And if you're looking for ways to further reduce your costs, here are 16 ways to use less electricity and save money.

Don’t forget you can also get the best broadband deals, insurance policies, banking products and mortgage rates here on 

Let's hear from you!

Are you considering getting solar panels installed? Does this news make it more likely? Or is cost still an issue?

Let us know in the comments below or reach out to us on social media.