Whether you are thinking about getting solar panels in Ireland or already have them, you should know about what the current tax policy is surrounding solar power.

There are a number of rules on VAT and Income Tax which can make home solar panels considerably more affordable.

It is also worth being aware of what tax bills will be directly impacted by the value and savings from solar panels once you have them.

There are two main areas of tax that appear on energy bills in Ireland: VAT and the Carbon Tax. You will see the amount of VAT and Carbon Tax you are being charged as a separate item on any electricity or gas bill.

Solar power can be used in one of two ways that can affect your energy usage:

The latter of these requires you to have a Power Diverter installed to use excess solar electricity on the immersion for hot water production.

This does not affect any central heating system. The only way solar energy can affect your space heating costs is if you use an electric boiler or heat pump.

All energy products in Ireland are subject to a VAT rate of 9%. This applies to household gas and electricity.

If you use gas or oil for heating and hot water in your home, you will also have to pay the Carbon Tax. The current Carbon Tax rate for Ireland is 1.148 cent per kWh.

When you use less electricity and gas due to your home solar PV system, your are paying less tax on both of those, as well as saving on the energy cost itself.

One of the simplest ways to increase your savings from solar power in Ireland is to export any unused electricity back to the grid.

For this, you will be paid a Feed-in Tariff per kWh of exported electricity, the price of which is set by your electricity provider.

Read more in our guide to Selling Excess Solar Electricity.

As with any other form of income, money made from selling surplus solar electricity is subject to Income Tax, the Universal Social Charge (USC), and Pay Related Social Insurance (PRSI).

This is combined with your other forms of income in the year to find your total taxable income. However, tax only comes into play after the microgeneration exemption has been exceeded.

One major area of importance is the existence of a tax exemption for homeowners selling solar energy under the Clean Export Guarantee (CEG).

With this exemption, the first €400 worth of income generated from selling surplus solar is exempt from these three areas of taxation.

Any income in excess of that €400 threshold is then subsequently subject to tax at your normal rate.

In Budget 2026, this tax exemption was extended to the end of 2028, meaning that it will be valid for at least another three years.

A very important part of the tax exemption for microgeneration is that it is applied per person on the electricity bill, not per household.

For a single person household, this won’t make a difference. But in a household with two people on the electricity bill, you could earn up to €800 tax free from solar power.

Local property tax is paid on the self-assessed value of your home or business, with tax rates set by the local authority.

Installing solar panels on your home will increase your LPT bill, as they increase the value of the property.

Studies have shown that installing solar panels on a home can increase its value by approximately 4%, which could result in a noticeable bump in your tax liability.

The level of LPT you owe is determined by where your home is located and what valuation band it falls into. There is a basic rate of annual LPT set by the property valuation bands. However, local councils may also vary that rate by +/- 15% each year.

Depending on the value of your home, adding solar panels might see no change in your LPT, or it could bump you up to the next band.

The good news is that the cost of installing solar panels on your home has been made significantly cheaper due to a 0% VAT rate.

This 0% VAT rate on domestic solar panel installations applies all of the material costs, e.g. solar panels and other equipment, as well as to the installation work itself.

This zero rate applies only in the following circumstances:

This 0% VAT rate was introduced by the government in late 2023. For many households, it knocked approximately €1,000 off the cost of getting solar panels in Ireland.

Aside from private households, the 0% VAT rate also applies in the following scenarios:

Revenue guidance states that the 0% VAT rate applies to any and all ancillary equipment being installed as part of the solar panels supply and service contract. This includes items such as the inverter, wiring, or a solar battery.

If you’ve got experience working with wiring and home improvements, you might be tempted to install solar panels yourself to save some money.

But you should be aware that if you do this, buy and install solar panels yourself, you cannot get the 0% VAT rate. That zero rate only applies for installations carried out via contract by a professional installer.

If you buy solar panels to install yourself, everything is subject to the standard 13.5% VAT rate.

You have to decide for yourself if higher materials costs with tax included are worth avoiding the cost of paying an installer. It should also be noted that if you don’t use an SEAI-registered installer, you won’t be able to get the domestic Solar Panel Grant.

The 0% VAT rate would not apply in other circumstances. This may include buildings that are not eligible or equipment that isn’t part of a package deal.