0% VAT On Battery Storage

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Did you know there is now no VAT on Battery storage? As of 1st February 2024 battery storage now benefits from the same rate of 0% VAT as solar panel installations. This is a welcome change by the UK government helping thousands of homeowners to further reduce their electricity costs.

Battery storage now 0% VAT

In an announcement by the UK government in December 2023, reforms to the current VAT relief on qualifying energy measures were made. This was the announcement of 0% VAT on battery storage systems. This was a moment of joy for energy fans and homeowners. Following on from the chancellor’s announcement back in September 2022, which allowed all homeowners to gain tax relief on solar installation. The UK government has now gone a step further, and it’s about time! There is now 0% VAT on solar batteries! This marks a huge step forward to reducing carbon emissions and getting closer to net zero within the UK.

Which Renewable Energy Technology is VAT Free?

So along with solar panels having already been VAT free we now have the following that have been added.

  • Battery storage systems
  • Water source heat pumps
  • Immersion diverters which are retrofitted to either solar or wind turbines.

When does No VAT on battery storage begin?

This new policy for the exemption of VAT on all battery storage systems installed in domestic homes is active as of the 1st of February 2024.

How long does 0% VAT on battery storage last?

You as a homeowner will be able to benefit from 0% VAT on any battery storage installation until 31st March 2027. After this date, VAT will be increased to just 5%, rather than return to the original VAT rate of 20%.

Which battery storage options are 0% VAT?

Solar and Battery Storage

Any installation that contains a battery is now VAT-free. This includes solar panel installations where the homeowner is having a battery fitted at the same time. Having a battery storage system installed alongside solar panels is generally the best type of solar installation for optimising your energy usage.

Standalone Battery Storage

You can also install a battery storage system as a standalone system without solar panels. This type of installation before 1st February 2024 would have incurred 20% VAT but now benefits from 0% VAT off the installation. A standalone battery system is a great way to save money on your electricity bill, as you can store energy at cheaper off-peak rates for use during on-peak periods. You can also sell stored energy back to the Grid and benefit from creating a passive income.

Retrofitting Renewable Technologies

If you already have a solar panel system fitted to your home you can still receive the VAT exemption retrofitting a battery storage system. This 0% VAT relief is also available for the retrofitting of other renewable technologies such as wind turbines, water and immersion devices such as the Marlec solar boost.

Should you invest in battery storage?

As there is now 0% VAT available on all battery storage installations there’s no time like the present to take advantage! This allows any homeowners who did opt for battery storage when having solar panels installed to improve their energy optimisation without having to pay even more. The inclusion of immersion devices will further allow homeowners to reduce their overall energy bills as they can utilise excess solar to heat hot water.

If you’d like to find out more about 0% VAT on battery storage or other technology please contact our expert renewable energy team.

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