February 1, 2024
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Blog, Industry news, News release

Introducing… 0% VAT battery storage systems

Breaking news: as of 01/02/2024, you can now purchase a battery storage system without paying a penny in VAT.

Earlier this year, the government announced its plans to reform VAT relief on the installation of qualifying energy-saving measures. (Such as solar panels and home storage batteries.)

Now, that reform is live and ready for billpayers to take advantage of. So, if you were thinking of investing in a home battery, there’s never been a better time.

🔅 0% VAT on ESMs

In its Spring Statement 2022, the government announced the expansion of VAT relief on energy-saving materials (ESMs). Though a step in the right direction, those expansions remained limited in scope. The industry clamoured for more comprehensive policy changes.

So, the government then launched a Call for Evidence (CfE) seeking views on potential areas of further reform. And, as a result of this CfE, the government is now rolling out its expansion of the tax relief.

From today — 01/02/2024 — the government is expanding tax relief to the following technologies:

Water-source heat pumps
Diverters retrofitted to ESMs (such as solar panels and wind turbines)

And, of most excitement to us here at GivEnergy…

Home storage batteries.

🔋 0% VAT battery storage

So, which type of battery storage projects are included in the new 0% VAT policy?

Battery storage added alongside solar PV 🔋☀️

Projects in which energy storage is fitted concurrently with a solar array — unlocking the full benefits of solar and storage combined.

Standalone battery storage 🔋

Projects in which a battery is fitted without supporting solar — taking advantage of smart tariffs to store energy when the cheapest, cleanest electricity is flowing through the wires.

Retrofit storage batteries ☀️⬅️🔋

Projects in which a battery is retrofitted to an existing solar array — maximising any prior investments on renewables.

Dave Roberts, UK MD at GivEnergy, comments:

“At GivEnergy, we have often expressed concerns that energy storage is overlooked at policy level. This oversight is hugely detrimental both to achieving net zero, and to addressing the strain on UK grid infrastructure.

So, this move is a critical step in acknowledging the important role that energy storage has to play in fostering energy independence for households and shifting to a more resilient grid.”

Jason Howlett, GivEnergy CEO, comments:

“The government has made the right move (if an overdue one) in extending tax relief on battery storage systems. The expanded VAT relief makes sense from a policy perspective – aligning perfectly with the UK’s commitment to reducing carbon emissions.

By offering financial incentives for billpayers to invest in energy storage, the government is encouraging the adoption of home green tech. A move as simple as VAT relief on home batteries, then, can help facilitate a more sustainable approach to our domestic power consumption.”

Carl Pote, Global Product Development Director at GivEnergy, comments:

“It is fair to predict that 0% VAT battery storage systems will stimulate growth across the energy storage industry. We anticipate a ripple effect across the entire supply chain – with lower costs driving increased demand, and in turn, driving technological advancements and job creation.”