VAT on solar panels to be abolished, ‘saving householders €1,000’

Environment Minister Eamon Ryan says cutting VAT on solar panels from 23pc to zero will trim about €1,000 off costs and deliver a quicker pay-back on investment.

he Green Party leader also said that suspended dissident Neasa Hourigan remained a valued member of the Green Party and would be back in full membership at the end of the TD’s 15-month suspension term.

He declined to say whether he had demanded a tougher penalty for her failure to vote with Government over ending the eviction ban.

Mr Ryan said the Government was ready to sign off on the abolition of VAT on the supply and installation of domestic solar panels. This change is expected to deliver average savings of about €1,000 on the cost of installing solar panels.

When this VAT saving is combined with Sustainable Energy Authority of Ireland grants of up to €2,400 per home, it could mean the cost of “going solar” could average €5,600 per home. However, these costings will be disputed and industry sources said some operators would inevitably “price in” the VAT abolition and the relatively generous grants.

These changes come as the Government aims to make it cheaper for people to generate their own electricity.

Mr Ryan told Newstalk yesterday that scrapping VAT would mean solar panels could “pay for themselves” in six years, after which they could produce “free electricity” for another 20 years.

The measure is expected in the Finance Bill which will come before Cabinet shortly, perhaps even this week.

The Government has already scrapped the requirement for planning permission for solar panels on residential homes, while a microgeneration scheme allows households to sell extra energy back into the grid.

Mr Ryan has also announced plans to put solar panels on every school in the country to help protect them against rising energy prices.