Energy Saving Trust responds to Treasury consultation on VAT relief for energy saving materials

The Energy Saving Trust has published its response to the Treasury's consultation on VAT relief for energy saving materials, backing the proposal to zero-rate battery storage connected to existing solar installations and arguing for a wider list of technologies to qualify¹. The response was published on 8 October 2025¹.

Under the current rules, the Trust says, solar panels and batteries installed at the same time both receive the relief, but batteries retrofitted later do not¹. It describes that outcome as "not logical" and says it does not support households that have had to sequence installations, not least because of cost¹. The Trust also supports battery storage qualifying as a standalone technology, though it says it does not expect that route to be used often, since most battery installations support another eligible material¹.

The Trust argues that the definition of storage in scope should be widened to cover other storage and flexible demand products, naming domestic EV chargepoints and thermal storage¹. On chargepoints it says those able to export to the grid or provide in-home demand flexibility "can save households significant amounts of money while reducing the strain on the grid at peak times"¹. On thermal storage it says conventional tanks and heat battery technologies can shift peak heat load for heat pumps, but that retrofitting storage to an existing heat pump, or upgrading it, is not currently eligible¹.

"we think that the installation of domestic EV chargepoints and thermal storage technologies meet the three qualifying objectives and should receive VAT relief"

Two further technologies are put forward. The Trust says water source heat pumps work like air and ground source models but draw heat from water, and that they are "often more efficient than either ASHPs or GSHPs", with no reason to exclude them from 0% VAT¹. On controls, it says all Class VI and Class VIII multi-zonal controls should receive relief, describing Class VI as weather compensators and room sensors, and citing savings of as much as 5% for multi-zonal controls according to Delta Dore¹. It adds that Class VI controls currently retail at similar prices to lower-class controls with less functionality¹. The Trust also says all technologies that currently receive the relief should continue to qualify¹.

The Trust links battery storage to heat pump running costs, saying incentivising storage will help lower them, which it calls critical to meeting the government target of 600,000 heat pump installations a year by 2028¹.

Why it matters for households

VAT relief changes what a household pays at the point of installation, so the scope of the relief decides whether a given upgrade carries 0% or the standard rate. The Trust's central point is a sequencing one: a home that fits solar and a battery together is treated differently from one that fits solar first and adds a battery later, even though the end system is the same¹. For a household weighing up home battery storage, that difference sits in the timing rather than the technology. The same pattern appears in thermal storage retrofitted to an existing heat pump, which the Trust says is not eligible today¹. The consultation itself concerns VAT relief on energy saving materials, and the outcome will shape what an installation costs. The Trust's response is a submission to a consultation, not a decision, and no rates have changed as a result of it.

What happens next

The Treasury has not published its response to the consultation, and no date for a decision has been reported¹. The current relief has an end date, which is covered in our guide to how long the 0% VAT relief lasts.

Sources1 cited

1. VAT relief for energy saving materials - Energy Saving Trust, energysavingtrust.org.uk