Can I get VAT relief for energy storage devices?

In this announcement, we capture the key factors that will allow you to get VAT Relief for energy storage devices and specifically batteries The relief applies to the services of installing energy-saving materials in residential accommodation and charitable buildings.

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.

Are battery storage systems exempt from VAT?

Effective 1st February 2024, battery storage systems will be exempt from 20% VAT and charged 0% instead. The tax break aims to incentivise consumer uptake and support the transition to renewable energy. It applies to all battery storage deployments including retrofitted and off-grid systems.

Do energy suppliers have to pay VAT?

Energy suppliers are required to account for VAT under the normal rules as the payment is made for a taxable supply of energy. Any VAT incurred by suppliers in relation to the operation of the scheme relates to the taxable supply of energy and is therefore recoverable, subject to normal rules.

Are fuel and power supplies subject to VAT?

Unless otherwise specified legal references will be from the VAT Act 1994 (VATA 1994). Under the act supplies of fuel and power are subject to the standard rate of VAT unless they are eligible for the reduced rate under schedule 7A or being exported outside the UK under the conditions set out in VAT on goods exported from the UK (VAT Notice 703).

How does VAT affect energy independence?

Enhances Energy Independence In addition to grid-connected systems, the VAT reduction applies to off-grid and backup storage solutions that allow homes and businesses to disconnect from the mains electricity grid. This supports the deployment of self-sufficient solar and storage systems that can provide energy independence.