What to know about the solar battery VAT cut

February 2024 saw the introduction of zero percent VAT on solar storage batteries. This applies in the UK whether they form part of your solar panel system, or you use them on their own. This follows on from a significant reduction from previous VAT rates of 5 to 20 per cent on solar panels. The news has been welcomed by the solar industry and looks set to boost interest and savings amongst users.

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More Savings on Offer

The UK government made solar panels Cheltenham and elsewhere in the UK VAT exempt in April 2022 and this has now been extended to cover standalone batteries and those installed retroactively.

Zero percent VAT now applies to all solar storage batteries, whether they are used to store electricity provided by the grid, retrofitted, or installed alongside microgeneration systems, such as domestic wind turbines and solar panels in Cheltenham and beyond.

Further Scope for Users

The cut in VAT also applies to a wide variety of other energy savers. These include water source heat pumps, ground source heat pumps, and air source heat pumps. The cut should now be applied automatically by installers.

Chris Hewit, Solar Energy UK’s chief executive, has welcomed the new VAT level, saying that it is likely to increase interest in home battery storage that allows solar power to provide electricity after dark and will double the savings potential for users of domestic solar power systems. You can read more about this issue on the organisation’s website here.

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Solar Energy UK, which is a non-profit organisation that represents solar industry businesses, had previously launched a campaign to solve the zero percent VAT ‘anomaly’. The new rules are now in place until April 1, 2027.

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