ECA joins call for domestic renewables VAT cut

A coalition led by the Association for Renewable Energy and Clean Technology (REA) has written to the Government, urging them to remove VAT rates on domestic renewable energy and clean technologies.

The letter also says that the Energy Savings Materials (ESM) list must now include all domestic renewable energy systems and clean technologies installed no matter the circumstances, including solar PV, heat pumps, biomass boilers, solar thermal, thermal storage, heat batteries, electric battery storage and domestic EV chargers.

It has been signed by nearly 30 companies and organisations across the energy industry including the likes of EDF, Nissan, OVO Energy, Eaton and Lightsource Labs.

The calls come in the midst of the ongoing energy crisis which has had a major impact on supply chains and businesses, and threatens a large rise in energy bills for many households. The group says that an increase in the installation of domestic renewable energy and clean technology systems would protect consumers from volatile energy prices. However, steps – such as the removal of VAT – need to be taken to increase the affordability of a number of technologies.

The coalition say that the move would support the transition to net-zero, deliver new jobs and investment and protect consumers from volatile energy prices.

Dr Nina Skorupska CBE, CEO of Association for Renewable Energy and Clean Technology (REA), said:

“The recent gas crisis has offered a sharp reminder of the severe impact that will occur if the UK’s energy transition moves without the pace or substance required. There has been a large impact on supply chains and businesses, and we are incredibly concerned about rising energy bills after this period of immense difficulty.

“The Government must take immediate action. It is our belief that one of the best ways to protect consumers from volatile energy prices is to give them the ability to install renewable energy and clean technology systems in their own homes. By reducing the dependency on gas and other fossil fuels, consumers should see their energy bills stabilise, as well as being able to contribute to the decarbonisation of the UK’s energy system.

“However, unless steps are taken to increase the affordability of a number of technologies, the aspiration to install domestic zero-carbon energy systems will remain out of reach for many.

“That is why the Government must remove VAT on domestic renewable energy and clean technologies no matter where they are installed. This would support the transition to net-zero, deliver new jobs and investment and protect consumers from volatile energy prices.”