Ireland has decided to abolish Value Added Tax (VAT) on new solar panels and their installation for households which is estimated to save them €1,000, announced the country's Minister of Environment Eamon Ryan on his social media account.
According to local media reports, the current VAT rate is 23% and will be lowered to 0% once the government discusses it in the Spring Finance Bill and signs on the rule. It is estimated to bring down the average cost of installation from €9,000 to €8,000.
Ryan added that with the addition of the Sustainable Energy Authority of Ireland (SEAI) solar grant of up to €2,400, total cost of solar panels and their installation should go down further to about €5,600.
According to the Irish Solar Energy Association (ISEA), that welcomed the move', this will bring down payback period of solar systems. "Clean energy hits the rooftops of every building in Ireland every day. Now with this announcement more of this energy can captured and converted into useable electricity. This announcement is a very positive development. We look forward to continuing our work with government to deliver more sensible climate solutions," said ISEA CEO Conall Bolger.
Ireland aims to install 5 GW of total solar energy capacity by 2025. According to the International Renewable Energy Agency (IRENA), till the end of 2022 Ireland's total installed solar PV capacity was only 135 MW.
Before Ireland, Romania enacted a law in January 2023 to bring down VAT on solar panels and their installation to 5% from 19% towing the line that the European Council set in December 2021 (see Romania Lowers Value Added Tax On Solar PV Panels).
Earlier Montenegro too brought down VAT on solar panels from 21% to 7% (see Montenegro Launches 70 MW Rooftop Solar Tender).
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