The solar industry installed 1.3 GW of rooftop capacity in 2023, a 60% jump on the previous year. Yet one of the UK’s largest solar firms has just told the BBC that future policy uncertainty is now the biggest brake on growth, not technology or cost.
As reported by the BBC, the firm’s plea is blunt: give us a stable policy framework beyond 2027, or the installation boom will stall. For homeowners, the stakes are concrete, every month of delay is a month of higher bills and a lower EPC rating.
Why policy dithering hits your wallet
The current support package is a patchwork. The 0% VAT on solar panels, introduced in April 2022, expires in March 2027. The Smart Export Guarantee pays households for surplus electricity, but at rates set by individual suppliers, typically 5–15p per kWh, far below the 28p you pay to import. There is no long-term contract, no floor price, no guarantee that the next government won’t scrap the scheme.
Installers need to hire electricians, buy stock, and plan marketing. Without a clear pipeline of demand backed by policy, they keep prices higher than they would be in a stable market. The Energy Saving Trust estimates that a typical 4 kW system costs £5,000–£6,000 installed today. In Germany, where policy has been stable for a decade, the same system costs roughly 20% less.
The catch is that households cannot wait. The 0% VAT window closes in under three years. If you delay, you pay 20% VAT on the full installation cost, an extra £1,000–£1,200 on a typical system.
Who qualifies, and who doesn’t
Anyone with a south-facing or east-west roof can install solar panels. But not every home benefits equally. Ofgem data shows that homes with smart meters and an export agreement earn an average £180 a year from the Smart Export Guarantee. Homes without a smart meter cannot export at all, they simply lose the surplus.
Renters and leaseholders face a harder path. Only the building owner can authorise roof work. The government’s Boiler Upgrade Scheme, which offers £7,500 for heat pumps, does not cover solar alone. Solar is treated as a standalone measure, not part of a whole-home retrofit package.
Homeowners with an EPC rating of D or below stand to gain the most. The Energy Company Obligation (ECO4) scheme can fund solar panels for low-income households in inefficient homes, but eligibility is means-tested and limited to those on certain benefits.
What a stable policy would look like
Industry bodies have asked for three things: extend the 0% VAT beyond 2027, introduce a minimum export price of 15p per kWh, and include solar in a single national retrofit scheme alongside insulation and heat pumps. The Climate Change Committee has recommended all three.
Yet the government’s Heat and Buildings Strategy, published in 2021, contained no long-term solar target. The current target is 70 GW of solar capacity by 2035, but that includes large-scale farms. The rooftop contribution remains vague.
For comparison, Germany targets 215 GW of solar by 2030, with a specific mandate for solar on new homes. The UK has no such mandate. The result is that British installers operate in a boom-bust cycle, and households pay the premium.
What you can do now
If you are considering solar, act before March 2027 to lock in 0% VAT. Get at least three quotes from MCS-certified installers, the Microgeneration Certification Scheme is the only quality mark recognised by Ofgem and the Smart Export Guarantee.
Check your EPC rating first. A home with loft insulation, cavity wall insulation, and double glazing will get more value from solar than a draughty Victorian terrace. The Energy Saving Trust recommends addressing fabric efficiency before generating your own power.
Finally, write to your MP. Ask them to support the Solar Homes Bill, a private member’s bill that would mandate solar on all new homes and extend the 0% VAT scheme to 2032. The bill has cross-party support but has not yet had a second reading.
Frequently Asked Questions
Yes, but less. Without 0% VAT, a £6,000 system costs £7,200, an extra £1,200. Your payback period lengthens from roughly 10 years to 12–13 years, depending on your electricity usage and export tariff. Installing before March 2027 avoids the surcharge.
Yes, but only if you own your home and receive qualifying benefits such as Pension Credit or Universal Credit. ECO4 funds solar panels for homes with an EPC rating of D or below. You must apply through a local authority or approved installer. The scheme runs until March 2026.
