UK Government grants VAT relief on battery storage systems

In a significant stride towards a more energy-efficient future, the UK government has announced plans to provide VAT relief on the installation of energy storage batteries. This groundbreaking move expands upon previous policies, which had limited VAT relief to batteries installed alongside solar panels. Set for implementation on February 1, 2024, this new policy embraces standalone battery installations and retrofitted batteries, marking a pivotal moment for the UK’s clean energy transition.

What is changing?

Following the Spring Statement 2022, the government initially announced expansions of VAT relief on energy-saving materials (ESMs). However, recognising the need for further reform, a Call for Evidence (CfE) was launched to gather industry feedback. As a result of this consultation, the government is now extending VAT relief to include technologies such as electrical battery storage, water-source heat pumps, and diverters retrofitted to ESMs like solar panels and wind turbines.

Inclusion of battery storage

Of particular significance is the inclusion of battery storage systems, an aspect often overlooked in previous government initiatives. This tax relief opens doors for various types of battery storage projects:

1. Battery storage added alongside solar PV: Projects where energy storage is installed concurrently with a solar array, enabling homeowners to maximise their renewable investment and contribute to a more sustainable energy infrastructure
2. Standalone battery storage: Installations where a battery is fitted independently of supporting solar panels, allowing homeowners to take advantage of smart tariffs and optimise energy consumption during peak hours
3. Retrofit batteries: Projects involving the addition of batteries to existing solar arrays, offering homeowners greater control over energy usage and contributing to a cleaner grid

Industry Response

The announcement has been met with enthusiasm from industry leaders like Dave Roberts, UK MD at GivEnergy. Roberts highlights the significance of this move in promoting cleaner technologies and fostering greater energy self-sufficiency for households. The anticipated growth in the energy storage industry is expected to stimulate job creation and technological advancements.

Final Thoughts

The UK government’s decision to grant VAT relief on battery storage systems marks a significant step towards a more sustainable future. At Kembla, we are excited to be part of this journey towards cleaner energy solutions.

Explore the benefits of battery storage for your home or business? Contact us today at Kembla to learn more.