The Solar Trade Association (STA) has secured from the UK Government a 5 percent rate of VAT on battery storage for householders installing a storage system alongside a new solar PV system.
The tax break will significantly improve the economics of installing solar + storage, bringing VAT treatment of storage in line with that of household fuels, grid energy supply and other onsite technologies. The STA managed to convince HMRC that battery storage should attract a reduced VAT rate when installed alongside solar. The STA released a paper calling on the department to issue a notice providing clarity on the issue as a matter of urgency and also calling for a reduced rate.
The win comes just after the announcements by IKEA and Solarcentury of their new solar and storage offers.
“This is a helpful and welcome decision by the Treasury following a major lobbying effort from the Solar Trade Association” said Seb Berry, STA’s Vice Chair and Head of External Affairs at Solarcentury. “Reduced VAT on new systems will encourage homeowners to embrace storage technologies alongside solar. Solar remains a good investment and storage means householders can now take even greater control of their energy bills. All STA members will be delighted by this win. The policy wins are needed as solar deployment has fallen to a seven year low. The industry is struggling with a policy framework that now provides tax breaks for fossil fuels that are not applied to solar.”
Leonie Greene, Head of External Affairs at the STA, added that the policy win comes as BEIS releases its latest public opinion tracker on energy, showing solar retains its top spot as the nation’s favourite energy technology, with a massive 86 percent of the public in support. Only 1 percent of the British public is now strongly opposed to renewables.