Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will make an assessment of the potential merits of including solar batteries used for energy-storage purposes which are installed as standalone products on the list of energy saving measures that qualify for zero per cent VAT; and if he will make an assessment of the potential impact of that policy on (a) the deployment of domestic low carbon technologies, (b) energy efficiency and (c) household energy bills.

At Spring Statement 2022, the Government announced the expansion of the VAT relief on the installation of energy saving materials (ESMs) to residential accommodation in Great Britain. The expansion of the relief, which includes the zero-rating of solar panel installations, represents an additional £280 million of support for investment in ESMs.

VAT is the UK’s third largest tax, forecast to raise £154 billion in 2022-23, helping to fund key spending priorities such as important public services, including the NHS and policing. Extending the ESMs relief to battery storage as a standalone technology would have a fiscal cost and should be viewed in the context of over £50 billion of requests for relief from VAT received since the EU referendum.

However, the Government keeps all taxes under review, and recognises the importance of ensuring that policy remains in step with the rapid pace of technological development in the ESMs market and the changing policy context since this particular relief was introduced.