This week’s government gazette confirmed the extension of a policy removing Value Added Tax (VAT) on sanitary products and photovoltaic (PV) system components, a measure aimed at reducing household expenses and encouraging greater adoption of solar energy.
The amendment to the Value Added Tax Act was passed in the House of Assembly on August 19 and in the Senate on August 21, 2025. It grants an additional year of zero-rated status, until August 1, 2026, for both categories of goods.
Initially introduced in August 2023 for a two-year period, the policy removed VAT on sanitary napkins, tampons and similar products, as well as a wide list of PV components such as solar panels, mounts, charge controllers, inverters, deep-cycle batteries, communication cabling, protective devices, isolator switches, MC4 connectors, junction boxes, combiner boxes and control devices.
Finance Minister Wayne D. Girard and Prime Minister Philip J. Pierre said the decision to extend the VAT waiver reflects both the government’s social priorities and Saint Lucia’s regional energy commitments.
“Mr Speaker, the desire to increase the level of adoption of PV systems is consistent with the Eastern Caribbean Solar Challenge, ‘Race to the Sun,’” Pierre told Parliament during debate on the measure last month.
He noted that the cost of solar installations in Saint Lucia remains higher than global averages.
“In Saint Lucia, solar PV prices [average] $7,000 per kilowatt-hour and consequently most residential PV systems are often in the region of $20,000 to $25,000,” Pierre said.
While, according to the Prime Minister, uptake has increased since the VAT removal took effect, he argued that “not sufficient time was given for most people to take advantage of the initiative.”
This guided the decision of the government to extend the zero-rating for a further year.
According to Pierre, eliminating VAT could reduce system prices by more than 12.5%, with government estimates projecting an overall cost reduction of about 30.5%. He said calculations from the Department of Energy suggest that if 500 households install PV systems, the country could lower its annual carbon emissions by 526.3 tons, save 1,800 megawatt-hours of electricity, and avoid using more than 44,000 gallons of diesel fuel.
