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Zero VAT now applied to domestic energy storage systems

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If you have waited until now to buy a domestic battery energy storage system (BESS) you can now benefit from a zero VAT cost.

Following a lengthy campaign in 2023 by Solar Energy UK to remove VAT from retrofitted domestic BESS, the government announced in December that the reform will indeed go ahead from 1 February 2024.

The Value Added Tax (Installation of Energy-Saving Materials) Order 2024 applies a temporary zero rating for the installation of energy storage systems in homes. This also applies to buildings used solely for charitable purposes. 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 exemption is also being applied to water-source heat pumps and smart diverters, which can be used to transfer solar power into hot water tanks when generation exceeds consumption.

Chris Hewett, Chief Executive of Solar Energy UK, said:

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


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