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VAT: Turbines

Volume 459: debated on Tuesday 1 May 2007

To ask the Chancellor of the Exchequer whether he has any plans to remove VAT from domestic wind turbines generating green energy. (133470)

[holding answer 24 April 2007]: Under the VAT agreements with our European partners, signed by successive Governments, we can retain our existing VAT zero rates, but we may not extend them or introduce new ones. It is therefore not possible to remove VAT entirely from domestic wind turbines.

Under the same European agreements, a reduced rate of VAT of not less than 5 per cent. is available for the construction, renovation and alteration of housing provided as part of a social policy. We have used this provision to introduce a reduced rate of VAT for the installation by contractors of a range of energy-saving and energy-efficient products and microgeneration technologies, including solar panels and wind turbines, in houses and other residential accommodation.