Leaders of the UK’s thousands of solar installers were today hailing a rare lobbying win conceded by the Treasury.
Among measures related to the spring budget, the finance ministry on Wednesday issued a call for evidence on scrapping its anomaly, whereby battery installations attract VAT if installed as a later upgrade to rooftop panels, but are VAT-free when installed with them.
Trade bodies including SolarEnergyUK have complained about the inconsistency introduced in the Johnson administration. They say it depresses take-up of power storage systems by commercial customers as well as by Britain’s 1.1 million PV-equipped homes.
The House of Lords has also heard criticism of the irregularity. “There should not be a fiscal incentive to install a battery at one time but not at another,” said Lord Foster of Bath last September, when advocating an amendment to the Energy Bill that would remove the anomaly.
“We should not penalise homeowners and occupiers looking to protect themselves from the energy price crisis”, said the LibDem peer.
In a post-Budget note to members, SolarEnergyUK welcomed the consultation, while decrying Hunt’s prioritising of nuclear and Carbon Capture & Storage over grid enhancements. It decried too Hunt’s failure to spend to upgrade Britain’s transmission networks.
The lobbyists welcomed the Chancellor’s promotion until 2026 of ‘full expensing”. In a bid to boost Britain’s low business investment and low output productivity, ‘full expensing” allows the cost of new equipment to be 100% set off against tax in only one year.
SolarEnergyUK leader Chris Hewett was generally dismissive of Hunt’s measures. Short-term opportunities such as a £63 million incentive for solar heated public swimming pools didn’t compensate for Hunt’s self-congratulation, he implied.
“(The) Budget was out of step with the mainstream trends in the global energy transition, where investment is pouring into solar, wind and energy storage“, said Hewett.
“The Chancellor appeared to conclude ‘Job done on renewables, now we will focus on CCS and nuclear’. He’s quite wrong.”