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Will the government grant VAT relief on energy storage batteries?

In a much-needed move towards energy efficiency, the government has unveiled plans to grant VAT relief on the installation of energy storage batteries. This welcome move extends far beyond the previous VAT relief policy, which was limited to batteries installed concurrently with solar panels.

Why has the UK extended tax relief on battery storage systems?

“It’s fantastic that the government has extended tax relief on battery storage systems. The expanded VAT relief aligns with the UK’s commitment to reducing carbon emissions and promoting green energy solutions.

What is battery storage tax relief?

The tax relief initiative, focusing on battery storage systems, is pioneering. It recognises the indispensable role that battery storage plays in bolstering the clean energy sector and propels the UK towards achieving more sustainable energy solutions. Tax relief eligibility for battery storage Projects

Is a battery energy storage system exempt from VAT?

Image: Eaton. The UK government has removed the 20% for retrofitted battery energy storage systems (BESS), effective 1 February 2023. From the Spring Statement in 2022, energy saving domestic equipment such as heat pumps and roof-mounted solar have been exempt from the VAT.

Are solar and energy storage installations subject to VAT?

All solar and energy storage installations, including maintenance to existing sites, should be subject to 0% VAT. This should include residential energy storage when installed as a standalone measure.

What does the new energy storage policy mean for the UK?

Effective 1 February 2024, this new policy encompasses standalone battery installations and retrofitted batteries. This decision marks a crucial turning point for the energy storage sector, signifying a pivotal moment in the UK's transition toward cleaner energy.

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