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Calling Time on VAT for Residential Storage

3-minute read Earlier this week, members of the UK energy industry, including Solar Energy UK and the Association for Renewable Energy & Clean Technology (REA) celebrated the success of the campaign to remove VAT from retrofitted domestic battery energy storage systems (BESS). On 11th December, the UK government announced, “… this technology meets all of the stated objectives for this VAT relief in its own right, and will therefore bring electrical battery storage within the scope of the relief. This means that the technology will now also qualify for VAT relief when either retrofitted to a qualifying ESM (Energy Saving Materials), or installed as a standalone technology connected to the grid.” With net zero targets looming and the revisions to Part L beginning to make an impact on the new build sector, this will bring a welcome boost to the retrofit sector early next year. The reforms to VAT on batteries are planned to be implemented from 1^st February 2024. This will give the one million plus homes with solar already fitted in the UK, the opportunity to benefit from the same cut in VAT that new installs of PV plus storage have enjoyed since the 2022 Spring Statement.

Which battery system should a homeowner choose?

At CCL we have a wide range of standalone and modular energy storage systems starting from 2.4kWh, that are suitable for retrofitting residential PV systems and offer the ability to store energy from the grid and excess generation from a PV system. Both modular and standalone systems allow for system expansion – either by adding more battery modules to the battery system, or batteries to the inverter, so your customer can expand their storage capacity as their needs grow. Dyness, Pylontech, and BYD batteries are widely compatibly with a number of other manufacturers’ inverters. For retrofit, the existing inverter could be replaced with a hybrid version, or an ac-coupled inverter can be installed to communicate between the PV system and the battery. The SolarEdge Home Battery is compatible with the series of HD-Wave inverters* that have SetApp as well as the newer, Home Wave and Home Hub inverters. Whatever your customers’ needs, the CCL team are on hand to help with product selection and advice.  

Why you should fit an energy meter with every installation

For those householders unsure of whether a battery would be beneficial to them, the zero VAT rate will provide a degree of breathing space. Manufacturers such as SolarEdge often recommend that every residential install – whether it’s with or without a battery - should include an energy meter. By installing the SolarEdge Energy Meter, you can return to the customer a few months after the PV install and look at their energy consumption to see if a battery would be appropriate. With information from the SolarEdge Monitoring Platform, you can demonstrate the value of installing a battery from actual PV yield and usage data - without the homeowner missing out on a lower price.  

Redressing the balance

With a mixed response to the outcomes of COP28, the news about our global journey to net zero has dominated the recent headlines. And whilst the news on VAT exemption for BESS may have gone unnoticed by the wider press, this small but significant announcement will undoubtedly help the UK’s plans to decarbonise. It feels like a degree of fairness is being restored and with it, we can help more homeowners make even greater energy savings.   Useful Information & Links: CCL Battery storage manufacturers BYD Dyness Pylontech SolarEdge HM Customs & Revenue Consultation outcome, Summary of responses, Updated 11 December 2023 Solar Energy UK announcement REA announcement * Please contact us for full details of compatibility with Single Phase Inverters with HD-Wave Technology. [/vc_column_text][/vc_column][/vc_row]