0% VAT on Battery Storage Starting February 1st, 2024

UK Government Boosts Sustainable Energy with VAT Relief on Retrofitted Batteries

The UK government has expanded VAT relief on energy storage batteries, effective February 1, 2024. This move goes beyond the previous policy, which only covered batteries installed with solar panels. Now, standalone and retrofitted batteries also qualify for this relief.

Retrofitted Batteries Now VAT-Exempt

Previously, only solar panels and certain energy-saving equipment received VAT relief. Now, the government has extended this relief to include retrofitted battery energy storage systems (BESS), exempting them from the 20% VAT.

What Does This Mean for You?

If you're considering adopting renewable energy or enhancing your existing system, this VAT relief extension is good news. Retrofitted energy storage batteries can now be more cost-effective, offering potential savings and increased efficiency for your solar panels, wind turbines, or water turbines. Keep an eye on further developments, as the industry advocates for additional inclusions like thermal storage and electric vehicle (EV) chargepoints.

Industry Advocacy and Government Response

Critics have responded positively to this change. Lower VAT on batteries makes them more accessible and helps to tackle the energy crisis in the UK. The government's decision recognizes that electrical battery storage aligns with VAT relief objectives, qualifying for the exemption whether retrofitted or installed as a standalone technology connected to the grid.

Industry Reactions

A Positive Shift in Equal Treatment Dr. Nina Skorupska CBE from the REA commended the decision for aligning battery storage with other energy-saving materials, addressing a long-standing issue of unequal tax treatment. Chris Hewett from Solar Energy UK expressed gratitude, highlighting the potential for retrofitted energy storage to boost the efficiency of solar installations.

Conclusion: A Step Towards Greener Practices The government's decision to extend VAT relief on retrofitted batteries is a positive step towards encouraging sustainable energy adoption. This reform aligns with broader efforts to reduce reliance on the grid and supports a cleaner, more sustainable energy future in the UK.