THE GOVERNMENT HAS announced that the VAT rate for the supply and installation of solar panels will be abolished from 1 May. 

The Department of the Environment has stated that reducing the rate from 23 to 0% will bring the average cost of installing solar panels down by €1000, meaning that consumers will pay €8000 rather than €9000. 

The Department has stated that this permanent change is being made in order to help families and businesses deal with “high energy prices and cost of living challenges”. 

The change will cost the Government €19m annually, according to estimates from the Department of Finance. 

Minister for Finance Michael McGrath said that he believes that scrapping the VAT rate on solar panel installation will encourage more people to avail of the technology. 

“This measure underlines the Government’s commitment to help households to save money on their energy bills and reduce their carbon footprint and contribute positively to our national climate change targets,” he said. 

Minister for the Environment Eamon Ryan said that the announcement is another step towards “cleaner, cheaper, renewable energy”. 

He outlined other measures that the Government has taken to incentivise homeowners and businesses to opt for solar panels: “We have removed planning permission requirements to install solar panels on residential homes. Our Micro-generation Support Scheme is continuing to prove very successful, following record levels of installations supported in 2022 via the Domestic Solar PV Scheme – operated by the Sustainable Energy Authority of Ireland.”

“With thousands of householders also signing up to sell their excess renewable electricity back to the grid; there is now an even greater opportunity for citizens to be part of the energy transition and become active energy consumers, whilst also supporting the electricity grid and strengthening Ireland’s energy security,” he added. 

Ryan stated that there are over 50,000 homes with solar panels in Ireland, with 17,000 solar installations connecting to the grid just last year. 

“This is expected to increase further as prices come down and solar becomes more mainstream,” he added.