ECA welcomes Government battery storage response

ECA has welcomed Government's announcement that electrical battery storage systems will be subject to VAT relief when either retrofitted to a qualifying energy saving material, or installed as a stand alone technology connected to the grid.

The move represents a significant win for ECA. It follows ECA's lobbying efforts to better align policy with Net Zero targets. Learn more about ECA's work in this area, here.

A statement issued buy HMRC reads:

"The government recognises the integral role that electrical battery storage can play in reducing households’ reliance on the grid, both when retrofitted to a qualifying ESM and when used as a stand alone technology connected to the grid."

"This technology already qualifies for VAT relief when installed alongside a qualifying ESM, as it is ancillary to a zero-rated supply. The government agrees with respondents, though, that 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, or installed as a stand alone technology connected to the grid."

"The government hopes this reform will enable more consumers to retrofit electrical battery storage to existing ESMs, allowing households to maximise the efficiency of their solar panels, wind turbines, and water turbines. Government response. The government recognises the integral role that electrical battery storage can play in reducing households’ reliance on the grid, both when retrofitted to a qualifying ESM and when used as a stand alone technology connected to the grid. This technology already qualifies for VAT relief when installed alongside a qualifying ESM, as it is ancillary to a zero-rated supply."

Read the full outcome of the consultation here.

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