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VAT on home battery systems cut to zero

Solar Energy UK 
1 February 2024

Credit: Solar Shed

From today, VAT will no longer be charged on domestic battery energy storage systems (BESS) under any circumstance.

The move, announced in December, came after a lengthy campaign by Solar Energy UK and parliamentarians alike.[1]

The Value Added Tax (Installation of Energy-Saving Materials) Order 2024 applies a temporary zero rating for their installation of BESS in homes and buildings used solely for charitable purposes.[2] This resolves an anomaly where fitting them at the same time as a new solar energy system was VAT-free but not when retrofitted to an existing installation. This left more than 1.2 million solar-powered homes unable to benefit from the tax cut.

The law also extends the same exemption to water-source heat pumps and smart diverters, which can be used to transfer solar power into hot water tanks when generation exceeds consumption.

The zero-rating period will end on 31 March 2027 across the UK.

“The cut in VAT is exceedingly welcome, and we have every expectation that it will increase demand for home battery energy storage. Allowing solar power to be used after dark, can double the savings offered by home solar power systems. There has never been a better time to upgrade than today,” said Chris Hewett, Chief Executive of Solar Energy UK.

[1] Victory for campaign against VAT on home energy storage

[2] The Value Added Tax (Installation of Energy-Saving Materials) Order 2024

– ENDS –

Editor’s notes:

For more information or to request an interview, please contact:

Gareth Simkins, Senior Communications Adviser |

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