Longford households could save up to €1,000 on solar panels
The new Zero VAT rate on solar panels could on average save households €1,000 with the upfront cost of installation.
That's according to Longford / Westmeath Fianna Fáil TD Joe Flaherty who has welcomed the measure.
The Government recently approved a report stage amendment brought forward by Minister for Finance Michael McGrath to Finance Bill 2023.
The Bill gives legislative effect to the taxation measures recently announced by the Government, the purpose of which is to continue to assist families and businesses deal with high energy prices and cost of living challenges.
Deputy Flaherty commented, “I'm really happy to see that the Government is doing something about the cost of installing solar panels for homes. They're now not going to charge any VAT, which means households will save around €1,000.”
The Longford TD believes this is 'a really smart move' because it'll help people save money on energy costs and use more sustainable energy sources.
He added, “Basically, it's a step in the right direction towards a cheaper and greener energy system.”
The Department of the Environment, Climate and Communications has estimated that if a zero rate of VAT was passed on to consumers, it would reduce the average cost of the supply and installation of solar panels for consumers from €9000 to €8000 and would thus help households reduce their electricity bills.
At €0.32c per KWh, this will reduce the payback period for installation from 7 to 6.2 years.
This is a permanent change and Minister McGrath secured Government agreement that it will come into effect from 1 May 2023. Minister McGrath will bring forward a Financial Resolution and an amendment at Report Stage of Finance Bill 2023 to give effect to the proposal.
The Department of Finance has estimated that the measure will cost €19m annually.