During a recent Dáil Éireann Debate on Tuesday, 18 April 2023, the proposed zero rate of VAT for the supply and installation of solar panels in Ireland was a topic of discussion (We wrote about this here). The Minister of Finance was questioned on several aspects of the proposed measure, including its implementation date, the potential cost savings for consumers, and the impact on reducing carbon emissions. Several notes of importance were highlighted during the debate, which shed light on the potential benefits and limitations of the proposed zero rate of VAT for solar panels.
The proposed measure, which is set to take effect from 1 May 2023, and will not be available retroactively, is expected to bring down the cost of solar panel installation from an average of €9,000 to €8,000 for consumers. This reduction in cost could encourage more households to adopt solar panels as a means of generating electricity, ultimately helping to reduce their electricity bills and promote sustainable energy practices.
However, the Minister for Finance noted that there is no guarantee that the reduction in VAT will be passed on to the consumer. This is due to the current inflationary pressures and supply chain issues affecting the global economy, which could lead to some suppliers retaining the reduction in VAT to offset other costs. Therefore, it is important for consumers to shop around and compare prices to ensure they are getting the best deal possible. On this point, Caldor Solar’s owner and CEO Eoin O’Flaherty has responded.
“Caldor Solar is committed to providing cost-effective and sustainable energy solutions. As a solar installation provider, we’re very pleased with the proposed zero VAT rate, and we assure our clients that they will absolutely benefit from this reduction in costs. The benefits will be passed on, in full, to ensure that our clients can continue to make informed and responsible choices toward reducing their carbon footprint. Transparency is key in this instance and we would hope and expect reputable suppliers to follow suit.”
It is worth keeping in mind that the zero rate of VAT for solar panels also applies to the ancillary equipment supplied and installed with the solar panels as part of the same supply and install contracts, such as the wiring, controller, combiner box, and batteries.
To assist, the Revenue Commissioners are in the process of preparing guidelines concerning the tax treatment of solar panels, and these guidelines are expected to be available on the Revenue website when this measure comes into effect.
The proposed zero VAT rate for solar panel installation is an exciting prospect for households in Ireland, offering a more affordable way to adopt sustainable energy practices and reduce carbon emissions. Caldor Solar’s commitment to passing on the benefits of this measure in full is a positive step towards transparency and hopes to help set the bar across the industry. With the implementation date set for 1 May 2023 and the Revenue Commissioners’ guidelines on solar panel tax treatment to come, this zero VAT rate is poised to make a significant impact in promoting sustainable energy practices and reducing carbon emissions in Ireland.
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