Solar industry seeks 5% VAT for RETRO-FIT sun-power battery storage systems

This​ budget is particularly important for the solar industry because Treasury policies are now key to securing a sustainable recovery in the solar sector – where deployment has fallen by 85% this year compared to 2015.

So the Solar Trade Association wants the chancellor to establish a level playing field for solar power with other technologies, including fossil fuels, on tax treatment and market access in the Brit-govt budget tomorrow.

The STA said that if deployment rates returned to those of a few years ago, an extra 10GW of solar could be installed in the UK – resulting in to £8 billion in investment in the UK economy.

An STA spokesman said: “We are not looking for new subsidies.

“However, we do want urgent reform of the feed-in tariff where this is clearly failing, and a level playing field in terms of market access and tax treatment.

The association says that:

  • All domestic battery storage installations should qualify for a reduced VAT rate of 5%
  • All rooftop solar panels should be classed as ‘excepted plant and machinery’ under Class 1
  • Business Rates in the regulations
  • Solar panels and energy storage should be added to the eligibility list for Enhanced Capital
  • Allowances.
  • Government should establish a subsidy free CfD auction mechanism for mature low carbon
  • technologies, including large scale solar, as soon as possible.
  • Stamp Duty Land Tax adjustments based on Energy Performance
  • Retention of Carbon Floor Price & details of carbon pricing in 2020s

The spokesman added: “Solar and storage are increasingly being offered together, given their obvious compatibility.

“We have secured 5% VAT for storage installed alongside new solar: however we need this applied to retrofit systems too.

“There are 875,000 homes with solar in the UK. It will help the establishment of the storage market if they are treated fairly for VAT purposes. “

The STA also supports the long-advocated policy of adjusting Stamp Duty Land Tax to promote energy efficiency upgrades in existing homes.

21 Nov 2017

Pixie Energy

Pixie logo Pixie Energy is an incubator and a facilitator of strategic research and project work, focusing on energy regulation, policy and markets at the local and national level. Find out more about Pixie Energy here.

Local Energy Matters: Scotland

Local Energy Matters: Scotland is a free-to-download brochure with a focus on energy tariffs in the two Scottish electricity distribution regions, as well news on local energy and low-carbon schemes.

Previous editions can be download here.

Scottish energy market overview

You can read an overview of the Scottish energy market here.

Scottish Government energy feed