Dáil Éireann Debate, Tuesday - 18 April 2023
384. Deputy Jennifer Whitmore asked the Minister for Finance when the zero-rate for solar products will be in place; if it will be applied retrospectively to products purchased in 2023; if legislation is required to apply the rate; and if he will make a statement on the matter. [17134/23]
View answer392. Deputy Robert Troy asked the Minister for Finance if he is considering schemes to refund homeowners who have recently installed PV systems the VAT that they have paid, given they were unaware that the PV scheme would be amended and would not have known they could have waited to avail themselves of the 0% VAT rate. [17307/23]
View answer393. Deputy Darren O'Rourke asked the Minister for Finance if he will provide an update on the forthcoming introduction of a 0% VAT rate on the supply and installation of solar panels; and if this will apply to solar panels only or solar panels and batteries. [17314/23]
View answer394. Deputy Darren O'Rourke asked the Minister for Finance if he will provide an update on the forthcoming introduction of a 0% VAT rate on the supply and installation of solar panels; how it will be implemented; and if there will be a 0% VAT on invoice. [17315/23]
View answer395. Deputy Darren O'Rourke asked the Minister for Finance if he will provide an update on the forthcoming introduction of a 0% VAT rate on the supply and installation of solar panels; if he is aware of the concerns of the solar industry that installations will be postponed until the policy is rolled out; and what steps, if any, are being taken to mitigate them. [17317/23]
View answer400. Deputy Michael Healy-Rae asked the Minister for Finance his views on the VAT rate on solar panels being reduced (details supplied); and if he will make a statement on the matter. [17458/23]
View answer404. Deputy Darren O'Rourke asked the Minister for Finance if he will provide details of the announced measure to introduce a 0% VAT regime on solar panels; if the measure will be backdated to include past or ongoing projects; and if he will make a statement on the matter. [17602/23]
View answerI propose to take Questions Nos. 384, 392 to 395, inclusive, and 400 and 404 together.
The Deputies should note that the background to the introduction of a zero rate of VAT for solar panels relates to an amendment to Annex III of the VAT Directive in 2022 which added a number of new categories to which Member States can apply a zero or reduced rate of VAT. One such option is to apply a zero rate within category 10c which is for the ‘Supply and installation of solar panels on and adjacent to public and other buildings used for activities in the public interest, housing and private dwellings’.
The Department of Environment, Climate and Communications has proposed the introduction of a zero rate of VAT for supply and installation of solar panels for households and private dwellings. If passed to consumers they estimate it would reduce the average cost for such supply and installation for consumers from €9,000 to €8,000 and would support households reducing their electricity bills.
In line with this proposal, an amendment is being made at Report Stage of the Finance Bill (Cost of Living measures) to reduce the VAT rate on the supply and installation of solar panels for private dwellings to zero from 1 May 2023. This rate will remain at zero unless the Government make a decision in the future to change it.
It is important to note that there is no requirement or guarantee that a reduction in the VAT rate will be passed on to the consumer, especially given the current inflationary pressures and supply chain issues prevalent in the global economy.
Deputies should note that VAT operates in two monthly cycles which means that there are only certain dates from which this measure can commence. Under normal circumstances, therefore this zero rate measure would commence at the start of the first two month VAT period after the enactment of this legislation which would be 1 July 2023. However, I am conscious of the importance of preventing market dislocation though an extended lead in period and consequently I secured cabinet approval for the use of a Financial Resolution to bring forward the implementation date to 1 May. The zero rate of VAT for solar panels can only operate from this date forward. I have no discretion to apply this measure on a retrospective basis.
The zero rate will also apply to ancillary equipment supplied and installed with the solar panels as part of the same supply and install contract for the solar panels, such as the wiring, the controller, the combiner box, the batteries, etc.
The Revenue Commissioners are in the process of preparing guidelines concerning the tax treatment of solar panels and it is expected that these will be available on the Revenue website when this measure comes into effect.
