Government cuts VAT on Solar Panels to 0%

Solar panels on residential roofing

Green Party leader and Minister for the Environment, Eamon Ryan has announced government plans to abolish VAT charges on solar panels in Ireland. This could reduce the cost of purchasing solar panels by up to €1,000. The change is due to be brought to Cabinet this week with the intention that it would be introduced as part of the Spring Finance Bill.

Initiatives like this are part of the plan to move Ireland towards its target of 80% of energy generated from renewable sources by 2030. Cost is consistently one of the biggest barriers in the way of Irish homeowners upgrading their home’s energy efficiency. This move will be welcomed by homeowners across the country as everyone seeks to reduce their soaring energy bills in this cost of living crisis.

Currently, solar energy only accounts for a small fraction of Ireland’s electricity generation, but the government has big plans to increase this. With the declining cost of solar technology and increasing public awareness of the urgency of climate change, solar energy is becoming an increasingly attractive option for the country.

In addition to this VAT cut, homeowners can avail of Solar PV grants from SEAI worth up to €2,400 – you can see all grants available for renewables in Step 3 of our Home Energy Upgrade Guide here. Depending on your house & energy usage, solar panels can significantly reduce the cost of your energy bills. In some situations, you can even receive money back from your energy supplier for surplus electricity you’ve generated and sold back to the grid as part of the Microgeneration Scheme. One of the prevailing myths about solar panels in Ireland is that you can’t sell excess electricity back to the grid. This changed last year and homeowners have been getting payments from their energy suppliers in 2022 – you can read Anne’s story of her first year with solar panels in Wexford Town & how much she received back at the end of 2022. 

While the upfront costs of installing solar panels may seem daunting, the long-term cost savings can outweigh the initial investment. In addition to the cost savings, installing solar panels can also increase the value of your home, as more and more homebuyers are looking for energy-efficient features when purchasing a property according to Dr. Ciaran Byrne, Direct of the National Retrofit programme (SEAI)

Overall, the government’s plan to boost solar energy generation is a positive step towards a more sustainable and cleaner energy future. Homeowners who are considering installing solar panels can take advantage of the potential cost savings and SEAI grants to make this investment more accessible and affordable. So why not take the first step towards a cleaner, greener future and start exploring your options for solar panel installation today?

In addition to the news about solar panels, Eamon Ryan also confirmed the plan to fit solar panels to every Irish school by 2025. This would be an important action with impact all across Ireland. 

With the above VAT abolition and the SEAI grants available, solar panels for the average Irish home could cost around €5,600. At this pricing, Eamon Ryan estimates that installing solar panels now could see them pay for themselves in “six years”. After this point, depending on your home & location, you could have decades of very low-cost or even free electricity.

Since 2022, planning permission is not needed for solar panels in Ireland. However, there are a few limits to be aware of.

Yes, solar panels still work effectively on cloudy or rainy days – which we get plenty of here in Ireland!

Solar panel efficiency is reduced on cloudy days but the actual % reduction will be dependent on your location & panel orientation.

Solar panels are definitely suitable for the Irish climate and will produce plenty of clean electricity for your home.