What Is and Isn’t Covered by the 0% VAT for Solar Panels?
No More VAT Refunds – But What’s Included?
For several months now, there’s been no need to request a VAT refund on a solar power system—VAT simply isn’t charged on the installation at all. However, some uncertainty remained about specific components of the installation. After all, some items might not clearly be part of the solar panel setup. To clarify, the Dutch Tax Authorities have published a list.
What’s Not Covered by the 0% VAT Rate?
It’s especially important to know what doesn’t fall under the 0% rate so that these items aren’t incorrectly priced. The list is quite extensive:
- The supply and installation of non-integrated multifunctional solar panels, such as PVT systems, solar collectors, or solar panels embedded in windows.
- The supply and installation of solar collectors that convert sunlight into heat.
- The supply and installation of solar panels on commercial buildings without a residential function.
- The supply and installation of solar panels on public buildings or other facilities used for general-interest activities.
- Roof reinforcements required for solar panel installation.
- Cable embedding in walls or floors.
- The supply of a smart meter.
- The supply and installation of bird deterrents or snow guards.
- Goods that are not specifically purchased for solar panel installation, such as:
- A new inverter replacing a broken one.
- Cables that are not supplied or installed as part of the solar panel installation.
- The supply and installation of a heat pump.
- The supply and installation of a battery storage system.
What Is Covered by the 0% VAT Rate?
Fortunately, the vast majority of new installations do fall under the 0% VAT rule, making things much easier. The Dutch Tax Authorities specify:
- The supply and installation of non-integrated solar panels, the most commonly used type, which are mounted on the roof or elsewhere near the home.
- The supply and installation of integrated solar panels, which also function as roofing material. Note: Integrated solar panels on a newly built home are subject to the 21% VAT rate.
- Work and materials directly necessary for installing and operating the solar panels, such as:
- (Installation of) cables, a PV distributor, mounting materials, optimizers, and inverters.
- Meter box adjustments or cutting roof tiles to accommodate solar panel installation.
- Dismantling and reinstalling solar panels on another home, for example:
- When moving house and taking the solar panels along.
- Temporarily removing panels due to roof replacement—the 0% VAT rate still applies to the removal and reinstallation.
- Replacing solar panels that are damaged or outdated.
- ‘Plug and play’ solar panels, as long as they are installed on or near a home.
How Does This Affect Your Invoice?
At Zonnefabriek, we already apply the 0% VAT rate to our quotes, so you generally won’t see a 21% VAT charge unless items from the first list are included. However, the 0% VAT rule has required some adjustments for installation companies.
We still have to pay VAT on products we purchase from suppliers but only get it refunded later. Previously, this wasn’t an issue, as we received full VAT-inclusive payments from customers upfront. Now, some installation companies face cash flow challenges, as they must pre-finance VAT while waiting for a refund.
This has led some solar companies to increase down payments or require them immediately after signing the contract. Fortunately, Zonnefabriek maintains a strong financial position, so we haven’t had to change our process. You still pay 40% of the total amount no later than two weeks before installation, with the remaining balance due after completion.
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