The recent VAT exemption for domestic battery storage installations is a ‘critical step’ for the industry and is already yielding positive results, according to solutions provider GivEnergy.
Effective from 1 February this year, the UK government eliminated VAT charges for domestic battery energy storage systems (BESS). This exemption, outlined in the Value Added Tax (Installation of Energy-Saving Materials) Order 2024, applies to both new domestic BESS installations and retrofits and will remain in effect until at least 31 March 2027.
This policy allows installers to offer more competitive prices. Despite the policy’s broad application, most growth in the UK’s energy storage industry has been driven by new constructions, as there is increasing pressure for new homes to be insulated and electrified. Traditionally, batteries were purchased after solar installations, but now many households are choosing BESS as their primary technology, noted Dave Roberts, GivEnergy’s UK managing director.
In an interview with Energy-Storage.news, Roberts highlighted that time-of-use tariffs, increasingly implemented by utilities, and could lead to a payback period of four to five years for home battery installations.
The Independent Advisor’s Solar Panel Guide indicates that solar panels typically pay for themselves in 12 years, a period which can be reduced with the addition of a solar battery. Home battery storage also offers more immediate savings. However, Roberts emphasised that both installers and consumers require more education on the benefits of this technology to boost its adoption.
For Roberts, the VAT exemption signifies a “critical step” towards the wider adoption of a technology that has not yet received adequate political support. “It fosters greater energy self-sufficiency for households and represents an important (if overdue) step in the right direction,” he stated.
Roberts also mentioned that GivEnergy’s sales records already reflect the positive impact of the VAT exemption.
GivEnergy manufactures battery storage and EV charging solutions for the residential and commercial and industrial (C&I) markets in its factory in China, which are then distributed and sold in the UK market.
The full interview with Dave Roberts is available with Premium access to Energy-Storage.news.