Guide
0% VAT on battery storage: the relief explained, 2024 to 2027
Updated
The quiet 20% discount: battery storage joined the VAT zero rate for energy-saving materials in February 2024, and unlike most green incentives there is no application, no scheme, no queue. Here is how it works and the small print that matters.
What changed and when
Installations of energy-saving materials in homes have carried a temporary VAT zero rate since April 2022. From 1 February 2024, the government extended the relief to battery storage in its own right: batteries retrofitted to existing solar systems and standalone batteries with no solar at all now qualify, where previously a battery only sailed through as part of a new solar installation. The rules sit in HMRC's VAT Notice 708/6.
The shape of the relief
- 0% VAT on the whole installed job: hardware and labour together, when a business supplies and installs the battery in residential premises.
- Zero rate runs to 31 March 2027; from 1 April 2027 the rate for energy-saving materials is scheduled to revert to the reduced rate of 5%, still below standard, but 5% of a £5,000 install is £250, so the calendar is worth knowing.
- No application needed: the installer simply doesn't charge VAT. If a quote for a supply-and-install battery job shows 20% VAT, question it.
- Covers retrofit, standalone and solar-plus-battery: all three routes qualify since February 2024.
The small print that catches people
- DIY doesn't qualify. Buy the battery yourself and you pay standard-rate VAT on the hardware; the zero rate attaches to the installation service. This is a genuine argument for supply-and-install quotes.
- Residential premises: the relief covers installations in homes (and certain charity buildings), not commercial premises.
- Check quotes line by line: the zero rate should appear as 0% VAT on the battery installation, not as a vague discount. A clean quote shows it explicitly.
What it means for your price
The typical 2026 installed ranges on this site, £2,500–£4,500 for 5kWh, £4,500–£7,000 for 10kWh, are quotes with the zero rate already in effect, which is part of why installed battery prices look better than they did a few years ago. If you are weighing up timing: the zero rate is scheduled until 31 March 2027, and nobody can promise what happens after that beyond the legislated reversion to 5%. Get quotes while the maths is at its friendliest.