The UK has cut value-added tax (VAT) to zero for individuals installing battery storage in their homes, effective from February 1, 2024.
UK battery storage cost drops 20%
Previously, domestic battery storage was only VAT-free when combined with solar. The new VAT-free rate will also be applicable to retrofitted residential battery storage, significantly benefiting more than 1.2 million homes with rooftop solar.
In addition to battery storage, the VAT exemption also applies to water-source heat pumps and smart diverters that transfer solar power into hot water tanks when generation exceeds consumption.
This tax break is part of the UK’s plan to reach the Paris Agreement goal of net zero by 2050. Chris Hewett, chief executive of Solar Energy UK, noted that the VAT cut will significantly increase demand for home battery energy storage, allowing solar power to be used after dark, thus doubling the savings offered by home solar power systems.
Electrek’s Take
For UK residents, this VAT cut translates to an upfront 20% discount when purchasing solar and storage, making it a much more wallet-friendly investment.
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