Removing Vat for installing solar panels 'would save households €700'
Under a directive adopted by the European Council earlier this year, member states have the ability to lower Vat on solar panels on housing to between 0% and 5%.
The Government has been urged to give “as many incentives as possible” to people retrofitting their homes, as campaigners called for a Vat cut on solar panels and similar measures in the upcoming budget.
Under the grants available from the Sustainable Energy Authority of Ireland (SEAI), funding is provided for a wide range of retrofitting options as part of Government plans targeting hundreds of thousands of homes.
Removing Vat on a standard household rooftop solar system would save Irish households €700 that invest in such a system, according to the Irish Solar Energy Association. Its CEO Conall Bolger said: “Irish householders currently pay 13.5% Vat for the installation of solar panels on their homes.
“At a time of crisis, it is unfair to tax those investing in the solution. Thanks to a recent decision by the European Council, Vat could be reduced to as low as 5% or eliminated completely.”
Mr Bolger also called for a 100% grant for the cost of installing solar PV panels for anyone receiving the fuel allowance to be announced in September’s Budget. Last month, it was reported that Environment Minister Eamon Ryan had written to Finance Minister Paschal Donohoe on the matter earlier in the summer.
The Green Party leader asked his coalition colleague to consider reducing Vat “on certain products to stimulate the decarbonisation of the residential sector and reduce energy costs for households”.
He said the affordability of retrofitting measures are a “significant barrier” to increasing take-up among households. Under a directive adopted by the European Council earlier this year, member states have the ability to lower Vat on solar panels on housing to between 0% and 5%.
The directive would give the Irish Government the power to implement such a measure in next month’s Budget.
Cork Green Party councillor, Dan Boyle, said the Government should use that opportunity and give as many incentives as possible to people looking to retrofit, through either a Vat reduction or through tax credits to claim back the cost.
“It’s important the take-up is quick and as early as possible,” he said. “Not only for the incentives for homeowners, but service providers. If there’s a fear, it’s in capacity and being able to deliver quickly.”
Mr Boyle said that decarbonising and investing in measures such as this now will yield a greater long-term return, and these should be prioritised in the Budget.
