Do I need solar panels to get VAT-free battery storage?

The relief is a 0% rate, not a reduction, and it applies across Great Britain until 31 March 2027³. It covers both the supply of the materials and the cost of the installation labour, provided the work is carried out by a VAT-registered professional installer⁴. There is nothing to claim yourself: the installer applies the 0% rate automatically⁵.

Items eligible for the 0% VAT rate

The relief applies to the installation of solar panels and battery storage systems, and it means no VAT on either the supply of the energy-saving materials or the fitting work itself⁴. The condition that matters is who does the work: the relief applies provided the installation is carried out by a professional installer⁷. A battery bought as a product and fitted by someone outside this framework does not fall within it.

HMRC's own guidance treats an installation of solar panels with an ancillary battery as a single supply that qualifies for the relief, and the same single-supply principle applies to the installation of solar panels on their own⁸. In other words, the VAT position follows the installation as a whole, not a shopping list of components.

The rate is 0%, a cut from the previous 5% rate that applied to energy-saving materials⁹. The zero rate is set to remain in effect until 31 March 2027¹⁰, and the same end date is given for the 0% rate on solar and battery storage installations across Great Britain³.

VAT treatment of retrofit batteries compared with standalone systems

The history here explains a lot of the confusion. Batteries installed at the same time as solar panels have always been subject to 0% VAT². But when the Treasury first consulted on the relief, the response from the Energy Saving Trust noted that batteries retrofitted later did not receive VAT relief¹¹, and industry commentary at the time confirmed that batteries sold separately and retrofitted to existing solar systems would most likely attract the standard rate².

That changed in February 2024. The government extended the exemption so that battery storage now also qualifies for VAT relief when either retrofitted to qualifying energy-saving materials or installed as a standalone technology connected to the grid¹. The legislation adds electrical batteries that store electricity generated by certain energy-saving materials and from the National Grid to the list of qualifying goods¹². A maker's account of the change describes it as extending the VAT removal to retrofit installations and standalone purchases, not just new installations¹³.

So the position today, in plain terms:

• Battery with a new solar installation: 0% VAT, and always has been²
• Battery added to an existing solar system: 0% VAT; until February 2024 it was 20%²
• Standalone battery, no solar at all: 0% VAT, connected to the grid¹

Industry guidance goes further and states that all solar and energy storage installations, including maintenance to existing sites, should be subject to 0% VAT⁹.

Qualifying properties and where the relief can be used

The relief applies to installations in residential accommodation. The legislation confirms that the combined installation of solar panels with battery storage in residential accommodation continues to benefit from the relief, and the 2024 amendment extends the qualifying list to electrical batteries¹². Guidance describing the scheme refers to it applying to residential properties, and in the case of solar and battery work, to homeowners in Great Britain⁷.

The nations differ in one respect. The 0% rate on solar and battery storage installations applies across Great Britain³. In Northern Ireland, the position has changed over time: a 2022 government publication stated that the list of qualifying goods and the rate of VAT due on installations in Northern Ireland would remain unchanged¹⁴. Under the Windsor Framework, the VAT relief for energy-saving materials, previously available only in Britain, has since been extended to Northern Ireland⁶.

There is no application form and nothing to reclaim. The supplier applies the 0% VAT rate automatically when installing⁵, and independent guidance confirms the relief is applied automatically by installers¹⁵.

Battery storage and greater independence from the grid

A home battery stores electricity to use later, which makes your energy system more independent from the National Grid². Where solar panels are present, free electricity generated during the day can be stored in a household battery and used at night¹⁶. The same logic extends to heating: combining solar panels with a home battery lets you store renewable electricity to power a heat pump, making you less reliant on grid electricity¹⁷.

A battery also changes what happens to surplus. Without one, unused solar electricity is wasted or exported to the grid, often at a relatively low rate; with one, that surplus is captured and held for when you actually need it, including overnight charging of an electric car¹⁸.

The independence is real but partial. A standalone battery with no generation still depends entirely on the grid for what it stores, typically charging on imported electricity; it shifts when you buy power, not whether you buy it. A battery paired with solar reduces both the amount you import and your exposure to import prices, but the household remains connected to the grid, to a supplier for any import and export, and to the manufacturer of the battery itself. The VAT relief lowers the upfront cost of that setup; it does not remove any of those dependencies.

The VAT relief alongside export tariffs and supplier schemes

A battery changes the arithmetic of export payments. Installing battery storage lowers the amount of electricity you export, meaning you get less money from export payments; however, the overall savings are generally greater than relying on export payments alone¹⁹. Under the Smart Export Guarantee, your exports and therefore your payments reduce if you have a storage battery, and having one may render you ineligible for some SEG tariffs². Some SEG tariffs do accommodate storage: at least one Export Variable tariff includes battery storage²⁰.

The VAT relief sits alongside supplier-funded schemes rather than replacing them. Energy companies of a certain size are responsible for ensuring low-income households get support for energy-saving upgrades under the Energy Company Obligation²¹, and that obligation operates separately from the VAT position on a battery you pay for yourself. For a fuller picture of both, see home energy grants and the pages on VAT relief on energy-saving materials and grants and funding for home battery storage.

The practical point for a household weighing a battery: the 0% rate reduces the purchase cost until 31 March 2027³, the installer applies it without any claim⁵, and the effect on export income should be checked against the specific SEG tariff on offer, since tariffs differ on whether storage is accepted².