Before December 2023, all solar batteries were subjected to 20% VAT. However, in December 2023, the government acknowledged that implementing a 0% VAT on solar batteries would be beneficial in encouraging householders to embrace new technologies and work towards a greener Great Britain. This will help to make it more affordable for the average household to invest in a battery storage system and utilise their solar panels more efficiently.
VAT Exemption For Battery Storage Now Implemented
The change in VAT on solar batteries occurred on February 1, 2024. Any solar battery now purchased is under the new VAT rate and will be significantly cheaper. This change in VAT has reduced the price to the consumer, thus encouraging more households to invest in greener residential energy systems.
What Does 0% VAT on Battery Installations Mean for Homeowners?
VAT is passed from the supplier onto the consumer and applies to all non-essential goods sold within the UK. This change in VAT illustrates the change in views around residential solar energy. Greener energy is essential to safeguard the future of our planet and reduce our reliance on fossil fuels. It is a necessity, not a luxury, and it is pleasing to see this reflected in the VAT status of solar batteries. Effectively, the reduction in VAT will decrease homeowners’ costs for energy installations, making them more affordable and financially efficient for the average household.
When Will The VAT Exemption on Battery Storage Start?
The VAT change occurred in February 2024, meaning that any solar batteries bought after this date will be sold under the new VAT rate. This change has already seen an increase in the sales of solar battery storage systems as homeowners take advantage of this substantial saving. Reducing the price of solar batteries will, in turn, improve the return on investment, making it more financially viable for many people to change their household energy system to a greener, more sustainable and affordable energy solution.
How Long Will VAT on Battery Storage be 0% For?
As with many government initiatives, the VAT-free status of solar batteries is only set to last for a while. The deadline to enjoy the 0% VAT lasts until the 31st of March 2027. However, at this point, it will be subjected to 5% VAT rather than returning to the previous 20% VAT rate. You will save more money by investing in your home solar energy system before this date, but even after this cut-off, the VAT is still lower than it was previously.
What Type of Battery Storage Installations Are VAT Free?
Understanding where you can obtain the savings under this VAT reduction is essential. The best system to invest in is a complete solar energy system with solar panels and a solar battery to generate your power during daylight hours and save it in your solar battery until you need it during the evening. This is the best setup for the average household out of the house during the daylight hours. If you are considering investing in a standalone battery system to store power bought from the grid during off-peak hours, which can help reduce your reliance on the grid during peak times and lower your energy bill, then now is a good time. Suppose you have existing solar panels and are looking to retrofit a solar battery to optimise the energy generated by the panels. In that case, you can still benefit from the reduction in VAT.
Choose Solar Energy in the UK
Remember, you don’t need perfect sunshine to generate solar power through your solar panels. Solar panels are still an excellent way to generate power even on a cloudy day. Storing the energy generated by your solar panels maximises their usefulness. If you want to reduce your energy bills, environmental impact, and reliance on the grid, then a solar battery system is the answer. When you come to us, you can rest assured that our batteries are designed and manufactured to a high standard. Simply fill in our online quote calculator to help you choose the best solar battery storage set-up for your home and enjoy a brighter tomorrow.