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Changes to VAT on Battery Storage Systems

In recent years, the UK government has made significant efforts to promote renewable energy sources and encourage the adoption of clean energy technologies.

One such technology is solar battery storage systems, which enable homeowners to store surplus solar energy for future use. However, the VAT regulations surrounding these systems have caused confusion and concern.

The UK government has exempted retrofitted battery energy storage systems (BESS) from its 20% VAT, from 1 February 2024.

GivEnergy Battery Storage System now 0% VAT

What’s Changed?

Previously in the Spring Statement of 2022, certain energy-saving domestic appliances like heat pumps and roof-mounted solar panels were made exempt from VAT. Initially, battery energy storage systems (BESS) were also exempt, but only if they were installed together with other energy-saving materials, such as solar panels.

However, in a recent announcement by the government on December 11th, it was revealed that retrofitted BESS will now also be exempt from the tax. This means that homeowners who choose to retrofit their homes with battery energy storage systems will also benefit from the VAT exemption.

To provide clarity and support the growth of renewable energy, the UK government has implemented new VAT rules for solar battery storage systems. As of February 1st, 2024, the installation of battery storage systems are eligible for the 0% VAT rate. This change aims to incentivise homeowners to invest in solar battery storage systems, thereby maximising the benefits of their solar installations.

SolarEdge Battery Storage System now 0% VAT

What does this mean for me?

The new VAT rules offer significant advantages for homeowners contemplating battery storage systems. By reducing the VAT rate, the cost of installing these systems becomes more affordable. This makes them an appealing choice for households seeking to lower their energy expenses and enhance their energy independence.

In addition to the new VAT rules for solar battery storage systems, it is important to note that this change includes various battery storage systems, including popular brands such as the Tesla Powerwall, SolarEdge, and GivEnergy.

These well-known battery storage solutions are now eligible for the 0% VAT rate, aligning with the government’s commitment to promoting renewable energy and supporting homeowners in their transition to clean energy technologies.