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.
In a much-needed move towards energy efficiency, the government has unveiled plans to grant tax relief on battery storage systems.
“It’s fantastic that the government has extended tax relief on battery storage systems. The expanded VAT relief aligns with the UK’s commitment to reducing carbon emissions and promoting green energy solutions.
The tax relief initiative, focusing on battery storage systems, is pioneering. It recognises the indispensable role that battery storage plays in bolstering the clean energy sector and propels the UK towards achieving more sustainable energy solutions. Tax relief eligibility for battery storage Projects
VAT on a range of domestic energy efficiency and renewable energy installations, including solar, is now 0% in Great Britain. This is a reduction from the previous rate of between 5% and 20% Eligible installations are those included on the Government’s list of Energy Saving Measures (ESMs).
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.