The UK government has revealed plans to give further VAT relief on energy storage batteries from February 1 st, 2024. The move extends beyond previous VAT relief, which was limited to batteries installed alongside solar panels. The policy now includes standalone battery installations and retrofitted batteries as well. What exactly is changing?
Effective 1 February 2024, the UK government has exempted retrofitted battery energy storage systems (BESS) from the 20% VAT. This recent and welcomed development means homeowners looking to upgrade their homes with energy storage now enjoy the same tax benefits as those incorporating energy-saving materials like heat pumps and roof-mounted solar.
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.
New and retrofitted batteries to be VAT exempt in 2024. The UK government has expanded VAT relief on energy storage batteries, effective February 1, 2024. This move goes beyond the previous policy, which only covered batteries installed with solar panels. Now, standalone and retrofitted batteries also qualify for this relief.
Lower VAT on batteries makes them more accessible and helps to tackle the energy crisis in the UK. The government's decision recognizes that electrical battery storage aligns with VAT relief objectives, qualifying for the exemption whether retrofitted or installed as a standalone technology connected to the grid.
Now, standalone and retrofitted batteries also qualify for this relief. Previously, only solar panels and certain energy-saving equipment received VAT relief. Now, the government has extended this relief to include retrofitted battery energy storage systems (BESS), exempting them from the 20% VAT. What Does This Mean for You?