April 4, 2023
Minister must address chilling effect of solar VAT announcement – Darren O’Rourke TD

Sinn Féin spokesperson on Environment and Climate Action, Darren O’Rourke TD, has called on the government to provide urgent clarification on the roll-out of the recently announced introduction of a 0% VAT rate on the supply and installation of solar panels following reports that many projects are being paused or cancelled in anticipation of the new regime.  

The Meath East TD said:

“While the announcement of a 0% VAT regime for solar panels was certainly welcome, it is clear the government has failed to carry out the necessary preparatory work to avoid unintended consequences and uncertainty within the industry. 

“Key industry stakeholders have already reported a chilling effect, with a significant number of scheduled projects being postponed or cancelled in anticipation of a €1000 saving later in the year. 

“In a move that seems to be a common feature of all government policy, Minister Ryan has yet again managed to announce a policy while simultaneously failing to provide any detail of just how it will be implemented. 

“This poses a risk not only to the workforce and to the progress of individual projects, but to the development of the burgeoning solar industry here in the short term.

“It is a welcome move to introduce a 0% VAT rate, but without any detail as to how it will operate in practice, any possible benefits to industry run the risk of being cancelled out by the uncertainty that it has produced.

“Among the long list of things that remain unclear are; if the policy change impacts solar panels only or does it apply to the supply and installation of storage batteries also? if there will be a 0% VAT rate on invoice or if the introduction will be implemented via a relief from income tax?; how VAT will be treated on the current grant offering? And if any short- or medium-term steps are being taken to mitigate any possible chilling effect, will the scheme be back-dated and extended to existing projects, for example?

“I have written to Minister Ryan alerting him of these concerns and asked that he provide urgent clarification.

“The government has to start taking seriously the translation of policies from their abstract to policies in their day-to-day operation; it is simply not good enough to make ‘cliff edge’ announcements and to worry about the details later.” 

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