AceOn joins call for VAT change

Energy storage and battery pioneer AceOn has joined an industry call for a change in VAT rules which penalise new technologies which will help drive down the UK’s carbon emissions.

And AceOn is also supporting demands for the Government to introduce a national incentive scheme to promote wider use of domestic energy storage – as it has with other green energy schemes.

AceOn – which has developed a unique Virtual Power Plant which stores domestic solar energy to make the most efficient use of it, cutting bills, emissions and fuel poverty – is one of more than 30 signatories to an open letter which calls for a fair deal for energy storage from the Government.

The letter which is signed by many of the leading national names in the energy and renewables industries, was developed by the Association for Renewable Energy and Clean Technology (REA). It says a thriving storage industry could enable the delivery of up to 86,000 energy sector jobs and boost UK manufacturing. 

In the letter the coalition calls for:

• VAT rates on home energy storage to be lowered to 5%, in line with domestically used electricity from fossil fuels (for example coal burned in the home).
• A temporary incentive, developed in consultation with industry and to appropriate standards, to encourage householders to install home energy storage, such as inclusion in the Green Homes Grant or a scheme equivalent to grants available for Electric Vehicle (EV) ownership, or EV charging equipment.

Dr Nina Skorupska CBE, chief executive of REA, said: “Domestic energy storage is a key enabler for solar, heat pumps and EV charging in a smart home eco-system yet there remain challenges to deploying it at scale, including that such projects are not eligible for a reduced VAT rate, unlike other technologies, such as fossil fuel heating.

“Energy storage has so far not received any support from a dedicated Government incentive scheme, despite being acknowledged as a crucial building block for the energy transition and the UK achieving net zero. We believe energy storage should be included in the Government’s national package of stimuli measures, along with renewable energy technologies of all kinds.”

Richard Partington, managing director of Telford-based AceOn, said the company fully supported the coalition’s calls.

“There is no question that the introduction of 20 per cent VAT on home energy storage that was implemented in October 2019 has not helped the roll-out of this important renewable energy storage technology.

“This innovative technology and our Virtual Power Plant will play a huge part in cutting carbon emissions and tackling climate change and also help to cut the cost of living for many households across the UK through significantly lower electricity bills.

“We also feel incentives for homeowners to move to renewable energy technologies should apply equally so that the much-needed green revolution can take shape as quickly as possible.”

Pictured:  Richard Partington