Solar panels in the UK currently benefit from a tax break due to the Government’s legislation on energy saving products. But this could all be changed after the European Commission stepped in and ordered the Coalition to change rules.
VAT for ‘green’ goods and services stands at 5%, reduced from the normal 20% rate. The Government hope this reduced rate will also help the Green Deal scheme on its launch in October.
And this is yet another incentive to install solar panels on your home, joining the feed-in tariff scheme.
But industry experts fear that increasing the VAT on solar panels could crash the market and put many homeowners off investing in this energy saving product. They also worry for the Green Deal’s success, as it’s based on homeowners paying back what they save on energy bills – and not a penny more
This means that if you’re interested in solar panels it’s best to look into this renewable technology sooner rather than later. With their energy saving and income earning potential, there are plenty of opportunities to cut your bills and see a huge return of investment.
With solar panels on your roof:
- Cut your electricity bills and escape fuel poverty worries. Solar PV systems capture the sun’s natural energy, turning it into usable electricity for the home. This can be used for all appliances including lighting and TVs
- Earn an added income with the Government’s lucrative feed-in tariff scheme. This scheme pays out 21p/kWh, meaning a return of investment between 10% and 15% annually is possible. However, the installation needs to be completed by an MCS accredited company for you to receive the tariff
- Reduce your home’s carbon footprint and help the Government to meet tough EU targets. Cutting carbon is also crucial to reducing global warming problems
- Put more value on your property because of the energy saving potential and financial rewards of solar panels. Potential buyers will see the opportunity presented by solar panels
But if the green tax is to be scrapped in the future, you’ll end up paying 15% more VAT for your installation. This will see you paying hundreds of pounds more on solar panels, whereas installing now would mean you pay out just 5% VAT rates.
With the benefits attached to solar panels there’s no reason not to invest if you want to reduce your energy bills and earn a fixed, guaranteed income for 25 years.