In an open letter sent to UK Ministers on Monday (21 December), the UK’s Renewable Energy Association (REA) and a coalition of industry groups argued that VAT on home energy storage should be lowered to 5%. This is the same level of VAT currently applied in the UK to electricity delivered to homes, and to fossil fuels supplied to off-grid homes.
REA and a coalition of industry groups are urging the Government to create a level playing field for home energy storage in recognition of its benefits to the energy system and role in reducing carbon emissions.
The letter – signed by REA, Powervault, Moixa, Good Energy, Eaton, Sunamp, Nissan, EDF and more – and briefing have been sent to Chancellor of the Exchequer Rishi Sunak MP, Financial Secretary to the Treasury Jesse Norman MP (the minister responsible for VAT), the Secretary of State for Business, Energy and Industrial Strategy Alok Sharma MP, and Minister of State for Business, Energy and Growth Kwasi Kwarteng MP.
REA’s key asks:
1. VAT rates to be lowered to 5%, in line with domestically used electricity & heating from fossil fuels.
2. A temporary incentive, developed in consultation with industry and to appropriate standards, to encourage householders to install home energy storage, such as inclusion in the Green Homes Grant or a scheme equivalent to grants available for EV ownership, or EV charging equipment.
A thriving storage industry could enable the delivery of up to 86,000 jobs in the energy transition, boost UK manufacturing and help meet the UK’s net zero ambitions, REA concludes.
