From the 1st of Febuaury 2024 the government have introduce 0% VAT rate on the installation of new and/or retro-fit Battery energy storage units (BESS) which until now were subject to full VAT unless they were installed at the same time as the SolarPV, so this is a great incentive for those who already have SolarPV fitted and wanted to add battery storage.
The UK must decarbonize 29 million homes to meet its 2050 net zero target. This requires deploying clean energy and efficiency upgrades nationwide. The new VAT reduction should help by making solar panels, batteries, and other upgrades more affordable.
However, batteries still face a disincentive, as they are not on the VAT exemption list. Consumers who cannot afford full retrofits in one go are penalized. Batteries’ tax status should not depend on timing. Solar Energy UK and others have called to add batteries to the VAT exemption list.
To boost uptake of home solar and batteries, Solar Energy UK recommends:
- 0% VAT on all solar, batteries, and related maintenance
- A long-term retrofit support scheme for homeowners, through at least 2030
- Building regulations that incentivize onsite solar and storage
The key is ensuring affordability of the technologies to reach net zero goals. VAT exemptions, robust support schemes, and enabling regulations are crucial steps.