VAT on solar panels will be abolished, ‘saves households € 1,000’

Environment Minister Eamon Ryan says a reduction in VAT on solar panels from 23% to zero will save around €1,000 in costs and provide a faster return on investment.

The leader of the Green Party also said suspended dissident Neasa Hourigan remained a valued member of the Green Party and would be a full member again at the end of the TD’s 15-month suspension term.

He declined to say whether he had demanded a tougher sentence for her failure to vote with the government to end the deportation ban.

Mr Ryan said the government was ready to sign off on the elimination of VAT on the supply and installation of solar panels for domestic use. This change is expected to result in an average saving of approximately € 1,000 on the installation costs of solar panels.

When this VAT saving is combined with subsidies from the Sustainable Energy Authority of Ireland of up to €2,400 per home, it could mean that the cost of “solar energy” could average €5,600 per home. However, these costs will be contested and industry sources said some operators would inevitably “price in” the VAT elimination and the relatively generous subsidies.

These changes come as the government wants to make it cheaper for people to generate their own electricity.

Mr Ryan told Newstalk yesterday that removing VAT would mean solar panels would “pay for themselves” in six years, after which they could produce “free electricity” for another 20 years.

The measure is expected in the Finance Bill that will reach the cabinet soon, maybe even this week.

The government has already removed the building permit requirement for residential solar panels, while a micro-generation scheme allows households to sell additional energy back to the grid.

Mr Ryan has also announced plans to install solar panels in every school in the country to help protect them from rising energy prices.