A call for evidence issued by the Treasury yesterday proposes extending the existing zero VAT rating for solar panels, heat pumps and insulation to battery storage, when either retrofitted to a solar photovoltaic system or fitted as a standalone unit.
The Treasury said that the action is in response to “multiple requests”, showing that lobbying from both Solar Energy UK and Parliament on this matter has paid off.
Adding a battery system to an existing solar array improves its value by allowing energy generated during the day to be used when needed. However, under current rules, an exemption from VAT is only available when they are both fitted simultaneously. Discouraging upgrades makes existing solar homes and commercial premises more reliant on expensive, high-carbon, grid power.
Close-up of a Tanjent Powerbanx home battery system (Image: Tanjent)
“This does not really make sense” said Lord Foster of Bath last September, when advocating an amendment to the Energy Bill that would remove the anomaly. “There should not be a fiscal incentive to install a battery at one time but not at another. We should not penalise homeowners and occupiers looking to protect themselves from the energy price crisis by adding batteries to their existing home solar systems as a stand-alone item to improve the benefits. Nor should we penalise those who could not afford to do both at the same time.”
Read more: RenewableEnergyMagazine
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