Battery Energy Storage Just Got a Lot Cheaper!

March 08, 2024 by Greg Bishop

0% VAT Now on Domestic Battery Storage Systems

NGRE is urging homeowners interested in battery energy storage systems to strike now following the recent scrapping of VAT by the UK Government.

All domestic Battery Energy Storage Systems (BESS) are now zero-rated for VAT, slashing the cost of the technology by a massive 20%.

But homeowners only have until March 31, 2027, to take advantage with the move being described as temporary.

Managing Director of NGRE, Greg Bishop, said: “This is landmark policy change by the Government, acknowledging the important role that energy storage has to play in domestic renewable energy and is a massive boost for the industry, making this vital piece of green technology much more affordable and attractive.”

Now is the Best Time to Invest in Battery Energy Storage

Greg said: “At the moment, it is a temporary measure so now is undoubtedly the best time to invest in a battery energy storage system whether you have solar panels or not.

Up until February 1st, 2024, when the new rules came into force, BESS or solar battery storage systems as they are also known, could only avoid the 20% VAT charge if they were installed at the same time as other energy-saving materials such as solar panels.

Homeowners who either could not afford a BESS when their panels were installed or just decided that they wanted to retrofit a system at a later date, or who simply wanted a stand-alone system for storing and using energy from the grid, had to spend a lot more money.

Now the new rules mean all BESS installations are VAT free until 2027.

80% Slash to Home Energy Spend with BESS

Greg added: “These storage systems can massively increase the efficiency of a PV system, helping families reduce bills and reduce their carbon footprint.

“Generally, owners reduce their energy spend by about 25% with a standalone PV system, which can be increased to as much as 60, 70 or even 80% with the addition of a battery – it’s quite considerable.”

NGRE estimated that one of its customers would generate 31% of their own electricity needs with a PV system alone but this jumped to a massive 84% with battery storage.

BESS Crucial to PV Efficiency

The move to scrap VAT on battery storage systems follows a consultation by the Government on the issue and a push by MPs in the Environmental Audit Committee (EAC) to introduce the measure.

The group argued that widespread uptake of household battery storage is going to be crucial to realise the full benefits of solar PV” and that reducing VAT would increase uptake of the technology.

Battery storage systems allow excess energy generated by PV systems to be stored and used later, when demand exceeds production, including during the night, ensuring no energy is wasted.

Homeowners with this storage capability are also able to benefit from variable tariffs, charging the battery at night when prices are cheaper, and using the stored energy during the day when prices are more expensive.

0% VAT PV Uptake

In March 2022, the Government introduced of a zero-rate of VAT for the installation of solar PV which helped see a large growth in the uptake of the technology.

It is hoped the same will happen with BESS, with the move expected to stimulate demand for home battery storage, increase energy efficiency, reduce energy bills and ultimately help achieve net zero. Recent figures reveal a massive 1,700 per cent year-on-year increase in annual battery storage installation.

Are you Interested in a renewable solution be it a Battery Energy Storage System or Solar PV System?

If you’re interested in taking advantage of the benefits of a solar renewable energy installation, be it a commercial or domestic solar PV installation, a domestic or commercial battery storage system or an EV charging point, from an MCS and NICEIC installer, fill out our contact form, and one of our experienced team will be in touch.

NGRE specialise in the supply of the latest renewable energy solutions for homeowners, architects, builders, businesses and community projects in Oxfordshire and surrounding areas and have more than 10 years’ experience.

NGRE are solar suppliers and solar installers, battery storage suppliers and battery storage installers, EV charge point suppliers and EV charge point installers.

NGRE supply and install a range of products including Tesla Powerwall, Viridian Clearline Fusion, REC solar panels, BIPVco Flextron, SolarEdge battery storage systems and EV charging systems, GivEnergy battery storage systems, and Zappi EV charging systems.