UK Government Announces Tax Relief for Battery Storage Systems

UK Government Announces Tax Relief for Battery Storage Systems

The UK government has recently announced that starting from February 2024, batteries for storing energy in homes and businesses will have a zero rating for VAT in their own right. This is a significant development for the renewable energy industry, as it will make solar batteries more affordable for consumers and businesses alike.
 
Previously, batteries were only exempt from VAT when installed alongside a solar panel array, at the same time of installation. However, from February 2024, batteries will be eligible for VAT relief regardless of whether they are installed with a solar panel array or independently.
 
This means that consumers who have already installed solar panels can add a battery storage system to their setup and qualify for the VAT exemption. Additionally, those who are interested in installing a solar battery system without a solar panel array can also benefit from the tax relief.
 
The UK government's decision to introduce tax relief for solar batteries is a recognition of the important role that battery storage plays in enabling users to store energy and reduce reliance on the electricity grid. With the cost of solar batteries decreasing rapidly over the past few years, this tax relief will make it even more affordable for consumers to invest in renewable energy technology.
 
Solar batteries are an excellent way to maximise the use of solar power and reduce reliance on the grid. By storing excess energy generated by solar panels during the day, batteries can provide power during periods of low solar generation or at night. This not only reduces energy bills but also helps to reduce carbon emissions.
 
In our opinion, the UK government's announcement regarding tax relief for solar batteries is very welcome and is a really positive step towards encouraging the adoption of renewable energy technology. With the cost of solar batteries becoming more affordable, this tax relief will make it even easier for consumers to invest in renewable energy and reduce their carbon footprint. However, at the moment the relief is only in place until 31st March 2027, plans to extend it further will be considered before that date.

The reduction in VAT is not applied to the retail cost of the product itself. If you are a residential customer and want to benefit from the 0% you will need to get your installer to purchase the equipment from us (at 20% VAT), install it on your residential property and charge you the 0% VAT (the installer would reclaim the VAT paid on their VAT return).

What is battery storage?

Battery storage is a technology that allows solar panel users to store excess energy they generate during the day. This energy can then be used during times when the sun isn't shining, or when energy demand is higher than the solar production. By storing excess solar energy in batteries, users can reduce their reliance on energy from the grid and lower their energy bills. Battery storage systems can be incorporated into solar panel installations, allowing homeowners and businesses to store and use the energy they generate on-site, rather than sending it back to the grid.

See our battery storage range.

Do I need solar panels to use battery storage?

No, batteries can store energy without being part of a solar panel system. Using batteries to store energy from the grid is becoming increasingly popular as a way to reduce reliance on traditional energy sources and lower energy bills. With a battery storage system, energy from the grid can be stored in batteries during off-peak hours when energy demand and costs can be lower. The stored energy can then be used during peak hours when energy demand and costs can be higher, allowing users to reduce their energy bills by relying less on expensive grid energy. Energy providers such as Octopus Energy provide tariffs with low off-peak charges designed specifically for this purpose. Battery storage can be also used as a backup power source during power outages, providing users with more energy security.

Need help with your solar panel or battery project? Get in touch.

By Admin HDM Solar
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UK Government Announces Tax Relief for Battery Storage Systems


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