The recent VAT exemption for domestic battery storage installations is a ‘critical step’ for the industry and is already having a positive impact, according to solutions provider GivEnergy.
With effect from February 1 this year, the UK government has removed VAT charges on domestic battery energy storage systems (BESS).
To enable 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 March 31, 2027.
Yet much of the growth in the UK energy storage industry from new construction is seen as increasing pressure to insulate and electrify new homes. While historically the market has seen battery purchases follow solar installations, many households are now choosing BESS over other technologies, said Dave Roberts, managing director of GivEnergy in the UK.
In conversation with our sister site Energy storage.newsAccording to Roberts, the time-of-use rates that are increasingly being introduced by utilities could mean a payback period of four or five years on home battery installations.
The Independent Advisor’s Solar Panel Guide states that solar panels pay for themselves on average after twelve years – this time this decreases with a solar battery. The savings offered by home battery storage are also more accessible. According to Roberts, installers and consumers need more education about the benefits to increase adoption.
For Roberts, the VAT exemption represents a “crucial step” for the introduction of a technology that is not yet sufficiently on the political agenda.
“It promotes greater energy self-sufficiency for households and represents an important (although overdue) step in the right direction,” he said.
Roberts added that his own sales data shows the sales tax exemption is already having an impact.
GivEnergy produces battery storage and EV charging solutions for the residential, commercial and industrial (C&I) markets from its factory in China, which it then sells through distributors in the UK market.
The full interview with Dave Roberts is available with Premium access to Energy-Storage.news.
