Are you, as an entrepreneur in The Hague or elsewhere, considering investing in solar panels or a home battery? An important question that is often asked in this context is whether you can reclaim the VAT you have paid. In this blog, we explain clearly and practically how VAT refund on home batteries and solar panels works according to the rules of the Dutch Tax and Customs Administration. For many entrepreneurs, VAT recovery on a home battery and solar panels is in fact an essential topic. VAT refund on home batteries and solar panels can be a significant financial advantage for business owners.

Solar panels and VAT

Since 1 January 2023, a VAT rate of 0 percent applies to the supply and installation of solar panels on or at a home. This means you do not pay VAT and therefore do not need to reclaim anything. There is simply no VAT on the invoice, so VAT recovery on a home battery and solar panels does not play a role here.

This zero rate applies only to solar panels that are supplied and installed on or at a home. When solar panels are part of a newly built home and are installed at the time of delivery, the regular VAT rate of 21 percent usually applies.

In short, this means that entrepreneurs who have solar panels installed on their home generally do not pay VAT and therefore cannot deduct any VAT.

Home battery and VAT

The situation is different for a home battery. On the purchase and installation of a home battery, you pay 21 percent VAT. Under certain conditions, this VAT can be reclaimed. In that case, it is important to understand exactly how VAT recovery on a home battery and solar panels works in this situation. In fact, VAT refund on home batteries and solar panels depends largely on your status as a VAT entrepreneur and your business activities.

To be able to deduct the VAT, you must be regarded as a VAT entrepreneur. This is the case when you use the home battery to trade electricity. You then feed electricity back to your energy supplier and receive a fee in return.

In addition, it is important that you have a dynamic energy contract and make use of an Energy Management System. The invoice must also be in your name, and at the time of purchase you may not be using the small businesses scheme.

When these conditions are met, you can fully reclaim the VAT on the purchase and installation of the home battery via your VAT return, provided that you include the battery in your business assets. In this way, VAT recovery on a home battery and solar panels is certainly possible. To clarify, VAT refund on home batteries and solar panels is not always automatic, but requires meeting all criteria.

Private use of the home battery

If the home battery is also used privately, you must pay VAT on this private use. The Dutch Tax and Customs Administration applies a revision period of several years. This may mean that in later years you have to repay part of the VAT that was previously reclaimed.

What does this mean in practice?

For solar panels on a home, you pay 0 percent VAT and reclaiming VAT is not applicable.
For a home battery, you pay 21 percent VAT and reclaiming VAT is possible, provided that you meet the conditions and are regarded as a VAT entrepreneur.

Practical points of attention for entrepreneurs

It is wise to check in advance how your energy contract is structured and whether you will actually feed electricity back to the grid. Participation in the small businesses scheme can also affect the possibility of reclaiming VAT. So think carefully about this before you invest. In short, VAT recovery on a home battery and solar panels requires good preparation. VAT refund on home batteries and solar panels should therefore be considered an integral part of your investment decision.

Do you have doubts about your situation or do you want to be sure that you are processing VAT correctly? Feel free to contact Luca Book. As an accounting firm in The Hague, we are happy to think along with you.