The recent VAT exemption for domestic battery storage installations is a ‘critical step’ for the industry and is already having a positive impact, solutions provider GivEnergy said.
As of 1 February this year, the UK government removed VAT charges for domestic battery energy storage systems (BESS).
Enabling installers to offer competitive prices, the Value Added Tax (Installation of Energy-Saving Materials) Order 2024 applies to new domestic BESS installations and retrofits and will continue to do so until at least 31 March 2027.
Still, much of the growth in the UK’s energy storage industry has been seen by new builds as pressure mounts for new homes to be insulated and electrified. Where the market historically saw battery purchase follow solar installation, many households now opt for BESS ahead of other technologies, GivEnergy’s UK managing director Dave Roberts said.
In conversation with our sister site Energy-Storage.news, Roberts said that time-of-use tariffs increasingly being brought in by utilities could mean a payback of four or five years on home battery installs.
Independent Advisor’s Solar Panel Guide states that, on average, solar panels pay back after 12 years – this time drops with a solar battery.The savings offered by home battery storage are more accessible, too. According to Roberts, installers and consumers need more education on the benefits for uptake to increase.
The VAT exemption, for Roberts, represents a “critical step” for the uptake of a technology that has not yet been sufficiently included in the political agenda.
“It fosters greater energy self-sufficiency for households and represents an important (if overdue) step in the right direction,” he said.
Roberts added that its own sales records show the VAT exemption already having an impact.
GivEnergy manufactures battery storage and EV charging solutions for the residential and commercial and industrial (C&I) markets from its factory in China, which it then sells into the UK market via distributors.
The full interview with Dave Roberts is available with Premium access to Energy-Storage.news.