Not grants, but real
Solar export payments and 0% VAT in Wales
Whatever your income, two things lower the cost of solar for a North Wales home or add to its value. One is a tax relief with an end date; the other is a payment for electricity you don't use. Neither is a grant, and both are often described as one.
In brief
Installing solar panels, batteries or heat pumps in a home is zero-rated for VAT until 31 March 2027; from 1 April 2027 the rate is 5%. Under the SEG, larger suppliers must pay a rate above zero for electricity you export, if the installation is MCS certified and exports are metered. Both apply across Wales.
Checked at source on 3 November 2026 · An independent guide from SEO-DONS LTD, not the Welsh Government, Nest or a council
The tax relief
0% VAT on installed solar
HMRC's Notice 708/6 sets a zero rate of VAT for installing qualifying energy-saving materials in homes until 31 March 2027. Solar panels, batteries and heat pumps all qualify; since 1 February 2024 that includes a battery installed on its own and charged from the grid. From 1 April 2027 the rate becomes 5%.
Three conditions matter. The equipment must be installed, not just supplied: panels bought to fit yourself are charged at the standard rate. The installation must be in a home. And the relief is applied by the installer on the invoice, so there's nothing for you to claim. Gas boilers don't qualify.
VAT is a UK-wide tax, so the rules are identical in Wales. If an installation will straddle 1 April 2027, ask the installer in writing which rate applies to each payment.
The payments
Export payments under the SEG
The SEG covers Great Britain, including Wales. Licensed electricity suppliers above a size threshold must offer at least one tariff paying for electricity small-scale generators export to the grid, at a rate above zero; smaller suppliers can choose to offer one. Beyond that, suppliers set their own rates and terms, so there's no single "SEG rate".
Ofgem's guidance sets out what's needed on your side: exports must be metered, in practice by a smart meter able to record half-hourly readings, with an export MPAN; and for solar up to 50kW, the installation and installer must be MCS certified or equivalent. You can choose an export tariff from a supplier other than the one you buy from.
What exports are worth
Exports are the smaller part
A south-facing kWp in North Wales makes roughly 883 to 995 kWh a year by PVGIS's estimates for the six administrative towns. Some of that you'll use as it's generated, displacing electricity you'd otherwise buy; the rest is exported. Because the price you pay for a unit of electricity is usually higher than the export rate, self-use is usually worth more per unit.
So the value of export payments depends on your day. A household out at work exports more; one at home in daylight uses more. A battery can store some surplus for the evening. When comparing quotes, ask how any figure splits between self-use and exports, and which rates were assumed.
Side by side
The two reliefs compared
| 0% VAT | SEG export payments | |
|---|---|---|
| What it is | A tax relief on installation | Payment for electricity exported |
| When | On the invoice, until 31 March 2027 | After installation, for as long as you export |
| Who gets it | Every home having qualifying equipment installed | Certified, metered installations |
| Set by | HMRC | Each supplier, above zero |
| A grant? | No | No |
The end date
Should 31 March 2027 change your timing?
The change is from 0% to 5%, not to 20%. On a few thousand pounds that's a real but modest difference, and it's no reason to sign a contract you haven't checked. It is a reason to be wary of "beat the deadline" sales pitches in early 2027, and to make sure a quote shows VAT correctly.
Misdescribed
"Government grant" claims about these
Both reliefs are sometimes sold as grants. Neither is: the VAT relief removes a tax, and export payments are income from a supplier. Calling either a grant is misleading, and an offer that does so is worth questioning on everything else too. The genuine grant routes in Wales are Nest for eligible low-income households and, for heat pumps, the Boiler Upgrade Scheme.
VAT and export questions
Is there VAT on solar panels in Wales?
Not on panels installed in a home until 31 March 2027. From 1 April 2027 the rate is 5%. VAT is a UK-wide tax, so the rule is the same in Wales.
Do Welsh suppliers pay for exported solar electricity?
Under the SEG, which covers Great Britain including Wales, larger licensed suppliers must offer a rate above zero for exports from a certified, metered system.
Is a battery zero-rated too?
Yes, when installed in a home, including a battery installed on its own since 1 February 2024.
Are export payments a grant?
No. They pay for electricity you send to the grid, at a rate your supplier sets.
Setting up exports
Getting export payments started
Export payments don't start automatically. Once the system is installed, you'll need the MCS certificate, which the installer should provide within 30 days of completion, and a meter that can record exports half-hourly. Then choose an export tariff and apply to the supplier offering it. Compare more than one: some pay a fixed rate, some vary with the time of day, and some require you to buy your electricity from the same supplier. If you have a battery, ask how the tariff treats exports from it. Keep the certificate safe, because a new supplier will ask for it if you switch.
In short
Neither needs an application to the government
VAT relief is applied by the installer on the invoice; export payments come from the supplier you choose. Neither involves applying to the Welsh Government or the UK government, so anyone offering to apply for them on your behalf for a fee is offering nothing of value.
Checked against
- VAT Notice 708/6, energy-saving materials (HMRC), read 3 November 2026
- SEG guidance for generators (PDF) (Ofgem), read 2 November 2026
- PVGIS solar estimates (SARAH3, 2005 to 2023) (EU Joint Research Centre), read 3 November 2026
- find a certified installer (MCS), read 3 November 2026
Not sure which scheme, if any, fits your home?
Tell us which council area you're in and what you're looking into. Your message reaches SEO-DONS LTD, the publisher of this guide, and we answer by email. We're not a scheme and can't approve anything, but we can point you to the right one.
What happens next
- Your message reaches SEO-DONS LTD, which publishes this guide.
- We reply by email with the scheme page that fits, if there is one.
- Any application is between you and that scheme.