On Tuesday, July 1st, the VAT rate on the purchase of solar panels, heat pumps, wind turbines, and geothermal systems will increase to 23%, above the 6% applied since 2022. This change marks the end of a measure implemented by the Government of António Costa, which was initially intended for three years.
In the explanatory memorandum of the bill submitted today by IL in the Assembly of the Republic, the party expresses regret over the end of this program, viewing it as a “strong, clear, and positive signal of the State’s commitment to decarbonization and energy justice.”
The party argues that eliminating the reduced VAT for these items contradicts recent public programs, such as Efficiency Vouchers and the Sustainable Neighborhoods program, creating an “economic barrier to green solutions” by the State.
“In this context, the permanent maintenance of the reduced VAT rate is a just and strategic measure. It promotes social justice, stimulates the green economy, and unequivocally contributes to meeting Portugal’s energy and climate targets,” the statement reads.
Proposing a permanent 6% VAT rate for these items, the IL warns that failing to do so would “penalize sustainable behaviors, hinder the country’s energy modernization, and compromise the collective effort constantly requested from civil society to combat climate change.”
In addition to this bill, IL also submitted a resolution in the Assembly of the Republic, calling on the Government to extend the reduced VAT rate on these items until the end of 2025.
The party requests that the Government take this step “so that the discussion for a more permanent extension of the public policy can occur without severely affecting pending investments.”
