Trevor Sargent (Dublin North, Green Party)
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Question 266: To ask the Minister for Finance if he will support the removal of VAT on investments in renewable energy projects, in order to make it a more attractive proposition for farmers to convert to domestic biofuel boilers, and to install solar panels. [34398/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The VAT treatment of goods and services is governed by EU law with which Irish VAT law must comply. While we can retain the zero rating provisions which were in existence on 1 January 1991, we cannot introduce new ones. Therefore, it is not possible to apply a zero rate to the supply of alternative energy systems. In addition, while a reduced rate can be applied to certain goods and services, there is no mechanism which would allow for the reduced rating of such systems. The sale of alternative energy products is therefore chargeable at the standard VAT rate of 21%.