How do you apply 0% VAT correctly on a domestic solar supply-and-install contract?

When does the zero rate apply to solar PV?

The zero rate applies when one business supplies and installs solar panels on or beside a private dwelling under a single supply-and-install contract. Revenue's Tax and Duty Manual says it has applied since 1 May 2023, and eBrief 105/23 announced the new rate on 28 April 2023. Before that date, a reduced rate applied where the panels did not exceed two-thirds of the total value of the supply.

Revenue's wording is "on or adjacent to", so a roof system and a ground-mounted array next to the house are treated alike. Private dwellings include houses (including a domestic residence on a farm), apartments, duplexes, and caravans or mobile homes fixed to the ground in a way that effectively immobilises them. For this purpose "solar panels" covers photovoltaic panels, solar windows and solar walls.

The table summarises the main contract set-ups, using Revenue's manual and SEAI's battery guidance. It does not replace either.

Source: Revenue, Tax and Duty Manual "Supply and installation of solar panels", last reviewed May 2025; SEAI, Homeowner Guidance for Battery Energy Storage, 9 October 2026.

Why must supply and installation be in one contract?

Because the zero rate depends on the same business being responsible for both the panels and their installation in the same supply. Revenue's manual says the standard rate applies to the panels if there is no installation contract in place with the supply of the goods.

If a customer buys panels from one firm and has another fit them, the sale is a standard-rated supply of goods. The fitting firm's separate installation contract may attract the reduced rate, but only under the two-thirds rule: where the cost of the goods used exceeds two-thirds of the total price, the rate on the goods applies to the whole transaction.

Keep it one job from one business. Present panels, mounting, electrical work and commissioning in one supply-and-install contract. Take advice before you split the supply and the fitting between two companies.

Subcontracting is fine, as long as you stay the principal. In Revenue's example, the principal zero-rates the whole supply and install to the homeowner, while the subcontractor's installation service to the principal is charged at the reduced rate. Your subcontractors should not invoice you at the zero rate.

Are batteries, wiring and other equipment zero-rated too?

Yes, when they are supplied and installed under the same supply-and-install contract as the panels. Revenue's manual says the zero rate applies to ancillary equipment such as the wiring, the controller, the combiner box and the batteries, and it adds that the list is not exhaustive.

The manual does not name inverters. The list ends with "etc.", but if an item is borderline, ask your accountant or Revenue instead of assuming.

Do not assume 0% on a battery retrofit. SEAI's homeowner guidance, dated 9 October 2026, says a battery installed at the same time as solar panels carries 0% VAT, while a standalone installation has VAT on top. It gives no rate, and Revenue's manual does not address a battery added to an existing system under a later contract. Confirm the rate before you quote.

For selling batteries with panels, see selling solar batteries.

What about farm buildings, B&Bs and commercial premises?

The zero rate does not apply to buildings that are not private dwellings. Revenue's list includes commercial, industrial and retail buildings, farm buildings, hotels, B&Bs, guest houses and holiday homes used for short-term accommodation. Public buildings are on the list too, other than recognised schools, which are zero-rated from 1 January 2024.

On those buildings a supply-and-install contract may carry the reduced rate. If the value of the solar panels and other goods does not exceed two-thirds of the total contract value, the reduced rate applies to the whole contract. Otherwise the standard rate applies.

Farms split in two. Panels on or beside a private dwelling on a farm, such as the farmhouse, are zero-rated. Panels on farm buildings that are not a private dwelling may be reduced-rated under the two-thirds rule. Flat-rate farmers may also be able to reclaim VAT on qualifying micro-generation equipment used solely or mainly for the farm business. The equipment must be on the Triple E Product Register, and Revenue explains the claim on its website.

Mixed-use buildings such as B&Bs can use the zero rate for the private residential part. The contract must specify that the panels serve that part fully or partially, and where use is partial, the price is apportioned. In Revenue's example, 10% of the floor space is private residential, and this is set out in the contract and on the invoice. The zero rate may then apply to 10% of the consideration, and the reduced rate may apply to the balance, subject to the two-thirds rule.

What happens when solar is part of a bigger job?

The solar element can stay zero-rated while the other work in the same contract is taxed at its own rate. Revenue says the zero rate may continue to apply to the panels and their ancillary equipment, with the other fixtures taxed at the reduced or standard rate.

Revenue defines a fixture as a good which, once installed, cannot be removed without causing structural damage to the building or damage to the good itself. Fixtures are generally standard-rated. Inside a supply-and-install contract they may be reduced-rated, but only if the value of the fixtures other than the solar equipment does not exceed two-thirds of the total contract value. The zero rate continues to apply to the solar part either way.

In practice, quote the solar element and the other works as separate lines, so each carries its own rate and the split is easy to defend.

Checklist: what your quote and invoice should show

Show the conditions for zero-rating on the page, line by line. Revenue's manual does not prescribe an invoice layout, so this list is good practice built on its conditions, not a Revenue form.

• One contract, one business. Panels and installation are supplied together by the contracting business.
• The property. The address, and a clear statement that it is a private dwelling. For a farm or mixed-use building, say which part the panels serve.
• Scope lines for the solar element. Panels, mounting, wiring, controller, combiner box, battery if included, and commissioning, all inside the same contract.
• Separate lines for anything else. Other fixtures or non-solar work each get their own line and their own VAT rate.
• Mixed use. The private residential share is stated in the contract and on the invoice, with the price apportioned.
• Rate shown per line. Your accountant can then follow each line without asking you.

For where the grant sits next to your quote, read selling with the SEAI solar grant.

Typical VAT mistakes on solar jobs

Each of these applies the wrong rate, so check them before an invoice goes out.

• Zero-rating a supply-only sale. Without an installation contract, the panels are standard-rated.
• Splitting supply and installation across two businesses. The zero rate needs both to be the responsibility of the same business in the same supply.
• Treating a farm building, B&B or holiday let as a dwelling. These sit outside the zero rate, apart from the apportioned private share of a mixed-use building.
• Letting a subcontractor invoice at the zero rate. Their installation service to you is charged at the reduced rate.
• Zero-rating a later battery add-on without checking. The manual covers batteries in the same contract as the panels, and SEAI says a standalone battery installation has VAT.
• Applying one rate to a mixed job. Other fixtures in the contract follow their own rate.
• Working from pre-May-2023 rules. The old reduced rate tied to the two-thirds test no longer applies to private dwellings.

Rules and guidance can change. Revenue's web page on solar panels was published on 16 March 2026 and the manual was last reviewed in May 2025, so check the current revision before you finalise a template. If you are still setting up your firm, starting a solar installation company covers the wider steps, and the solar installer guide for Ireland links the rest of this series.

Smart Solar passes on solar PV enquiries from private homeowners to installers and installs nothing itself. We are not tax advisers, so talk to your accountant or Revenue if a contract does not fit the cases above.