Will solar panel prices go up 2027 (buy now or wait)
Will solar panel prices go up in 2027? Buy now or wait
There’s a real deadline coming on 31 March 2027. There’s also a lot of scare talk about it. Here’s what actually changes, and what I’d do about it.
The short version
Yes, solar will cost a bit more from 1 April 2027, but nowhere near as much as you’ve probably been told. The 0% VAT rate ends on 31 March 2027 and goes back to 5%, not 20%. On a £7,000 install that’s about £350. Panel prices themselves have flattened out. If you were already planning to buy, get it done before the deadline. If you’re still unsure, £350 isn’t a good enough reason to rush.
I get this question more than almost any other at the moment, and it’s usually some version of: “I’ve seen that solar is about to get much more expensive — should I panic-buy before April?”
Short answer: there’s a genuine change coming, it’s worth planning around, and most of what’s being written about it online overstates it by a factor of four. Let me walk you through the bits that matter.
What actually changes on 1 April 2027
Since April 2022, installing solar panels and home batteries in Great Britain has carried 0% VAT. That relief has an expiry date written into it. It ends on 31 March 2027, and from 1 April 2027 the rate goes back to 5%.
That’s confirmed by the House of Commons Library, which was still reporting as of this month that the government hasn’t signalled any intention to extend it. So unless something changes in a future Budget, plan on 5%.
So on a standard 4kWp system, you’re looking at a few hundred pounds. Enough to be annoying. Not enough to change whether solar makes sense for your house.
The “20% VAT” thing doing the rounds is wrong
I keep seeing posts claiming your solar bill is about to jump by a fifth. It isn’t, and it’s worth being clear why.
Before April 2022, installing energy-saving materials in a home already sat at the reduced rate of 5%, not the standard 20%. The zero rate was a temporary cut from 5% down to nothing. When it expires, it goes back to where it came from. Five per cent.
If a salesperson tells you prices are about to rise 20% and you need to sign today, that’s a pressure tactic, not a fact. The scheduled change is 0% to 5%. On most domestic jobs that’s £300 to £600.
I’d add one caveat here, because I’ve seen it go wrong. Some sites — ours included, which I’m fixing — have described the zero rate as “saving you £1,000 to £2,000”. That figure comes from comparing 0% against 20%, and it’s not the comparison that applies when the relief lapses. Always sanity-check it yourself: 5% of your quote is the number.
The deposit rule almost nobody mentions
Here’s the part I think is genuinely useful, and I haven’t seen a single one of the big comparison sites cover it properly.
The VAT rate on your installation isn’t decided by the day the scaffolders turn up. It’s decided by what HMRC calls the time of supply, or tax point. That’s the earliest of three things:
- the date the installation is completed
- the date the invoice is issued
- the date you pay
HMRC’s own guidance on how this worked when the zero rate came in back in 2022 is instructive. A job that straddled the change carried two rates: the deposit paid beforehand kept the old rate, and the balance paid afterwards got the new one. The same logic runs in reverse in 2027.
If your install is booked for, say, mid-April 2027, money you’ve genuinely paid before 1 April should still be zero-rated. Only the balance picks up 5%. A larger deposit paid in March could legitimately shrink the VAT on the job.
Two things before you go and do that, though. Get the VAT treatment written into the contract in plain terms rather than relying on a chat with the salesperson. And never hand over a big deposit to an installer you haven’t checked out properly. A few quid of VAT saved is no comfort if the firm folds in February. You can read the detail in HMRC’s guidance on the transitional rules.
Are the panels themselves getting more expensive?
A bit, earlier in the year. Then it stopped.
Module prices in Europe climbed for the first four months of 2026. The March to April step alone was around 5.5%. That was driven by China pulling its 9% export tax rebate on wafers, cells and modules from April, plus a sharp run-up in silver prices. By July the rise had run out of steam across every technology class, and prices have been broadly flat since, with TOPCon modules drifting very slightly down.
Rystad Energy’s read on it at the start of the year was that the spike would be short-lived, because the big polysilicon producers had built up inventory. That’s roughly how it’s played out.
Why this matters less than you’d think
Here’s the thing that reframes the whole question. The panels are only a small slice of what you pay.
Fraunhofer ISE puts modules at roughly a fifth of the cost of a turnkey rooftop system. pvXchange says much the same from the other direction: take the module price and multiply by four to six to get the installed cost. The rest is labour, scaffolding, the inverter, mounting, the electrical work, certification and the installer’s margin, and none of that is set in Shenzhen.
| Scenario | Panel cost | Everything else | Total |
|---|---|---|---|
| Today | £1,400 | £5,600 | £7,000 |
| Panels rise 10% | £1,540 | £5,600 | £7,140 |
| Panels fall 10% | £1,260 | £5,600 | £6,860 |
A 10% move in panel prices shifts your bill by about £140. The VAT change is worth two and a half times that. So if you’re holding off in the hope that panels get cheaper, you’re waiting on the one part of the quote that barely moves the needle.
One wildcard for next year: China brings in mandatory efficiency and energy-consumption standards across the solar supply chain on 1 January 2027. Nobody I’ve read is willing to put a number on how much manufacturing capacity that knocks out. It could firm prices up. It could do very little.
The demand squeeze is the bigger story
Two policies land within a fortnight of each other in spring 2027, and both push demand up.
The Future Homes Standard comes into force on 24 March 2027. From then, new homes in England need on-site renewable generation, and in practice that means solar — the requirement is met with an array covering 40% of the dwelling’s ground floor area. There’s a 12-month transition for projects already under way, with the rules fully biting in 2028. I’ve covered what that means for buyers in our guide to solar panels on new build homes.
Then there’s the Warm Homes Plan, launched in January 2026: £15bn over five years, with £600m of it earmarked to fully fund solar and batteries for low-income households, plus low and zero-interest loans. The stated aim is to triple the number of UK homes with solar panels.
Put those together and you get a lot of new work chasing the same installers. And the market is already running hot.
March 2026 was the busiest single month ever recorded, at 28,861 installations. There are now more than 2.1 million MCS-certified systems on UK roofs. Installers are not short of work, and firms that are busy don’t tend to discount.
The risk in waiting isn’t really that panels cost more. It’s that you join a longer queue, with less room to haggle, at the exact moment every other homeowner has worked out the VAT deadline is coming.
What rising electricity prices do to the sums
This one cuts the other way, and it’s the strongest argument for not hanging about.
Under the current Ofgem cap, running 1 October to 31 December 2026, electricity is 26.32p per kWh with a standing charge of 54.83p a day. Cornwall Insight’s latest modelling, published on 14 October, has the January 2027 cap taking a typical dual-fuel bill to just under £2,000 a year, with electricity around 30p per kWh.
Every penny on the unit rate makes the electricity your roof produces more valuable. A system knocking £700 a year off your bill at 26p is worth closer to £800 at 30p, without you doing anything. That’s a year of savings you don’t get back by waiting, and it’s worth more than the VAT you’d save by buying early.
Export rates matter too, though less than people expect. Without changing supplier you’re looking at around 6p per kWh from the better standard tariffs. Switch to your installer’s or supplier’s premium deal and 12p to 18p is realistic, with some introductory offers higher. We keep a running comparison of SEG rates if you want to see where the good ones are right now.
Buy now or wait: the actual numbers
Let’s stop talking in generalities. Take a 4kWp system quoted at £7,000 today, saving £700 a year on bills plus a bit of export income.
| Install by March 2027 | Install mid-2027 | |
|---|---|---|
| System price before VAT | £7,000 | £7,000 |
| VAT | £0 | £350 |
| What you pay | £7,000 | £7,350 |
| Savings banked in the first year | £700+ | £0 |
| Net position after 12 months | −£6,300 | −£7,350 |
Waiting a year leaves you roughly £1,050 worse off on this example: the £350 of VAT, plus the £700 of savings you simply didn’t make. And that’s before you factor in electricity getting dearer in January, which widens the gap further.
For the avoidance of doubt, I’m not saying this to hurry anyone along. I’m saying it because the “wait and see if it gets cheaper” instinct quietly costs money in a market where the main variable going down is nothing to do with panels. If you want to run your own numbers rather than take mine, our solar panel calculator will do it for your house, and there’s more detail on the arithmetic in our guide to solar panel payback periods.
When waiting genuinely is the right call
I’d be doing you a disservice if I pretended the answer is always “buy now”. It isn’t. Here’s when I’d hold off, VAT deadline or no VAT deadline.
- Your roof needs work. Putting panels on tiles that need replacing in three years means paying to take them off and put them back. Fix the roof first. Always.
- You might qualify for a grant. If you’re on a low income or certain benefits, fully funded solar is a far bigger prize than a few hundred quid of VAT. Check our guide to solar panel grants before you spend anything.
- You’re moving within a couple of years. You won’t see the payback, and the uplift on sale price rarely covers the install.
- You’d be borrowing at a rate you’re uneasy about. The Warm Homes low and zero-interest loans are expected around early 2027. Waiting a few months for cheap credit can beat rushing into expensive credit.
- You only have one quote. The spread between quotes in the same postcode is routinely bigger than the VAT change. Get three.
We’ve long recommended February to April as the quiet, cheap window for an install. In 2027 that advice needs a tweak: a job completed in April 2027 falls the wrong side of the VAT change. Aim for February or March, or make sure the tax point lands before 1 April. There’s more on seasonal timing in our piece on the best month to install solar panels.
My verdict
Prices will nudge up in 2027, mostly because of VAT and partly because the industry is going to be very busy. They are not about to leap.
If solar already stacks up for your house — decent roof, you’re staying put, you’ve had a few quotes — then getting it done before 31 March 2027 is the sensible play. You avoid the 5%, you bank a year of savings, and you get in ahead of the rush. That’s a better reason to act than any sales pitch about a 20% rise.
If it doesn’t stack up yet, the VAT change won’t make it stack up, and £350 is a poor reason to commit to a £7,000 purchase you’re not sure about. Sort the roof, chase the grant, get the quotes. The maths will still be there in 2028, and so will the sun.
If you want the current baseline before you start ringing round, our breakdown of what solar panels cost in the UK has the regional figures.
Frequently asked questions
Will solar panels cost more after 1 April 2027?
Yes, a little. The 0% VAT rate on home solar ends on 31 March 2027 and returns to 5%. On a £7,000 installation that adds about £350, and on a £12,000 solar-and-battery job about £600. VAT is going back to the reduced rate of 5%, not the standard 20%, so the jump is much smaller than some sites suggest.
If I pay a deposit before April 2027, do I still get 0% VAT?
On the part you have paid for, usually yes. HMRC works out the VAT rate from the time of supply, which is the earliest of the date the work finishes, the date the invoice is issued, or the date you pay. A deposit paid before 1 April 2027 is normally zero-rated, while the balance you pay afterwards picks up 5%. Get it written into the contract before you sign.
Should I wait to see if solar panels get cheaper?
Probably not, if you were going to buy anyway. Panels are only about a fifth of what you pay for an installation, so even a decent drop in panel prices barely moves the final bill. Meanwhile the VAT relief ends, electricity is forecast to get dearer, and installer diaries fill up as the new-build rules arrive. Waiting saves you very little and costs you a year of savings.
