UK government extends VAT relief on battery storage
Good news alert! The UK government has revealed plans to give further VAT relief on energy storage batteries from February 1st, 2024. The move extends beyond previous VAT relief, which was limited to batteries installed alongside solar panels. The policy now includes standalone battery installations and retrofitted batteries as well.
What exactly is changing?
In its 2022 Spring Statement, the government announced the expansion of VAT relief on energy-saving materials (ESMs). Following industry calls, the government launched a ‘Call for Evidence’ (CfE) seeking views on potential areas of further reform. As a direct result of the response, the government is expanding VAT relief to include:
- Electrical battery storage
- Water-source heat pumps
- Diverters retrofitted to Energy Saving Materials, like solar panels and wind turbines
What’s included from a battery storage perspective?
The following is now subject to VAT relief:
- Standalone battery storage
Battery storage that is fitted without solar will now be exempt from 20% VAT.
- Retrofit batteries
A battery retrofitted to an existing solar array will also now be exempt from 20% VAT.
- Battery storage added alongside solar PV
A battery or batteries fitted at the same time as solar panels will still be exempt from 20% VAT.
Dr Chris Jardine, Joju Solar’s Co-founder and Technical Director commented:
“Battery storage is a crucial part of the UK’s clean energy transition, and this is a move that’s positively welcomed by Joju Solar. Homeowners should never have been penalised for doing things in stages, and it’s great that people won’t now have to have all the funds in one go to save 20% on battery installs. We hope the move will encourage greater energy self-sufficiency in homes across the UK, and that we’ll see more and more households invest in energy storage as a result, leading to a growth in the sustainable technologies that are critical for a cleaner, greener future for all.”
If you were thinking of getting battery storage for your home, or adding to your existing system, but were put off by the price, it will soon be 20% cheaper – and that’s something to feel good about.
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