VAT on solar panels

At present VAT is charged at the reduced 5% rate on the installation of energy saving materials (ESMs), including solar panels, in residential accommodation. The Government has introduced secondary legislation to amend the scope of the 5% rate to comply with European VAT rules (SI 2019/958). This took effect from 1 October 2019, although the Government has stated that the majority of solar panel installations is expected to be unaffected.