VAT has been scrapped on energy saving products and home solar panels by the UK’s Chancellor in his Spring Statement aimed at easing the country’s cost of living crisis.
The relief – down from its already discounted rate of 5% – will be in place for at least fie years, Rishi Sunak said.
It covers things like insulation, triple glazing and renewable energy generation. Domestic battery energy storage is notably absent.
He said: “We know that energy efficiency will make a big difference to bills. But, if homeowners want to install energy-saving materials, at the moment, only some items qualify for a 5% VAT relief and there are complex rules about who is eligible.
“The relief used to be more generous, but, from 2019, the European Court of Justice required us to restrict its eligibility. Thanks to Brexit, we’re no longer constrained by EU law.”
Sunak also said the changes will be discussed with Northern Ireland “as a matter of urgency”.
VAT was also axed on wind and water turbines.
And the Chancellor announced a new rate relief scheme for businesses looking to fit low-carbon technologies onsite, including rooftop solar, battery storage and cycling infrastructure. Heat network installations will benefit from a 100% relief.
This was originally set to run from 2023 to 2035 but Sunak brought it forward to next month.