Installing solar panels on the Isle of Man carries a 0% rate of VAT until 31 March 2027. The Isle of Man Treasury applies the zero rate to the supply and installation of energy-saving materials, and it has been in place since 1 April 2022.
What the Treasury has said
The Treasury announced the change in March 2022: wind and water turbines were added to the list of energy-saving materials, the old eligibility conditions were removed, and a time-limited zero rate was introduced for their installation from 1 April 2022. In February 2024 it widened the scope to include preparatory work for ground and water source heat pumps, and installations in buildings used solely for charitable purposes, such as village halls.
In the same announcement the Treasury confirmed the dates: the temporary zero rate “applies from 1 April 2022 to 31 March 2027 in the Island”. It also explained that the island keeps these rules in line with the UK’s under the Customs and Excise Agreement 1979.
What it covers
The UK’s list of energy-saving materials, which the island’s rules follow, includes:
- solar panels;
- home electricity storage batteries;
- smart diverters, which send spare solar power to a hot water cylinder;
- air, ground and water source heat pumps;
- insulation, draught stripping and heating controls;
- wind and water turbines.
The relief is for materials that are installed. Check the VAT rate shown on any quote, and ask your installer how the date applies to your job. Isle of Man Customs and Excise can confirm the position on 01624 648130 or at customs@gov.im.
Planning ahead
A rooftop system needs Manx Utilities’ written approval before it is connected, and a planning application if the roof is flat, in a conservation area or on a registered building. Leave time for both if you want the work done while the zero rate applies.
Our costs guide has a quote checker that works out what a system should make on the island, what that is worth at Manx Utilities’ rates and how long it takes to pay back. The installer guide covers the registration to look for, and the planning guide covers when an application is needed.
From the Isle of Man Treasury’s announcements of 23 March 2022 and 7 February 2024, and the UK list in Schedule 8, Group 23 of the Value Added Tax Act 1994, all read on 16 October 2026.