The government slashes VAT on solar; is now the time to pin down the panels?

Team Egg | 03/05/2022

With the government recently taking steps to make clean energy accessible to a broader audience, could now be the right time to invest?

At a Glance

If there are two things we know about at Egg, it’s clean energy and solar panels

We wanted to get down to what this VAT cut means for your journey to cleaner energy

In his Spring Statement, chancellor Rishi Sunak announced that the government are cutting VAT on energy-saving materials from 5% to 0 for the next five years. This is one of the first big steps from the government towards their goal of phasing out any new gas boilers in homes by 2025. 

These energy-efficient materials include solar panels, heat pumps and insulation. With buildings making up around 28% of overall global CO2 emissions, making our homes more efficient is an excellent first step to tackling climate change. 

It’s hoped that this move from the government will encourage more families to create more energy-efficient homes. In addition, they’ll reduce their reliance on imported energy, and save money on their household bills (something we’re all thinking about right now). 

If there are two things we know about at Egg, it’s clean energy and solar panels. 

We wanted to get down to what this VAT cut means for your journey to cleaner energy. 

How could going solar benefit me? 

While the VAT cut means you won’t be paying any additional tax on your solar panel installation, it’s still a big investment in the first instance. The cost of panels and installation ​​start at £8,157.

The average break-even time for a solar panel system is around 6-7 years, however, it can be longer, so you need to be sure it’s the right investment for you. 

Reduce your home’s carbon emissions 

The most straightforward and most significant benefit to solar power is it’s a more energy-efficient way of powering your home

Solar energy reduces your reliance on the grid. You’ll significantly bring down your usage of fossil or imported fuels to boil your kettle and keep the lights on.

Save money on your energy bills 

The amount you save will always vary depending on several factors, including the size of your system, how much electricity you use and the times of day you’re using it. 

But according to the Energy Saving Trust, the average home with a 3.5 kilowatt system could reduce their annual energy bills from anywhere between £170 and £440 off their household bills. 

You could bring money in

The Smart Export Guarantee (SEG) is a scheme that will pay customers for energy generated that they haven’t used. You may have heard this referred to as a Feed-In-Tarrif (or FIT). 

In 2020, it became compulsory for large energy companies (companies with over 150,000 customers) to participate in SEG. They must offer tariffs to their customers stating how much they could get back for their excess renewable energy. 

Don’t be afraid to shop around. Different companies will offer different tariffs. You want to make sure you get the right one for you. 

It’s important to remember that, unlike FIT, you’ll only be paid for the excess energy you don’t use.

Don’t qualify for solar? What about insulation or heat pumps? 

While you can make some fixes and tweaks, not every home is suitable for solar panels. But not to worry, you don’t necessarily have to miss out on this VAT cut completely. 

The exemption can also be applied to both insulation and heat pumps. 


Keeping your home nice and toasty with good quality insulation is an effective way to keep heating costs down. 

According to HomeHow, the average price of loft insulation is anywhere between £5-£11 per square metre. For a four-bedroom detached house, this will average out at around £1250. 

Find a complete guide to everything you need to know about insulation here.

Heat pumps 

Heat pumps seem to have been the most polarising of the three options. Some users complained of expensive installation and running costs and noisy units. 

Many homes have to pay an additional sum to upgrade their insulation to make the heat pump as effective as possible.

It’s difficult for us to tell you precisely whether a heat pump would be the right direction for your home. But there are plenty of resources out there to help you make the best decision for your greener future. 

Find out how to make sure your heat pump runs most efficiently.

Is now the right time to go solar? 

The UK is seeing some of the highest energy price caps on record. It’s understandable that many customers are left wondering whether now might be the right time to take more control of their energy and reduce their reliance on the grid.  

We get it. Things feel a little uncertain. But with Egg, you can be safe in the knowledge that your solar panels will be generating clean energy for your home for the next two decades. 

Go solar with Egg

Want to take advantage of Rishi’s offer? 

We’re here to help you do just that. 

There for you day and night 

It couldn’t be easier to get started with solar with Egg. We’ll first ask you a few simple questions to see whether your property is suitable for the panels. After that, it’s all systems go. We’ll get our expert engineers out to get you sorted, including showing you how to make the most of your energy with our smart energy app. 

If you want to take things a step further, why not install a battery to store the energy generated by your solar panels? 

You know what the UK weather is like. We can’t always rely on wall to wall sunshine, even in the height of summer. A battery will store any energy generated in good periods, meaning you’re free to use it come rain or shine. 

We’re pleased to see the government taking steps to make clean energy accessible to a broader audience. However, there’s still plenty to be done. 

Check out our tips for making sustainable changes for a better future.

Contact our expert Egg team now for more help and advice on your solar journey, switching to an electric vehicle and making the most of home charging.

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