Solar power on Britain’s home rooftops has a greater capacity than the country’s largest single power station. Yet earlier this year HMRC confirmed a proposed VAT increase for the installation of solar and storage, creating a higher barrier for homeowner adoption and industry innovation. Over 17,500 people signed a petition to stop the move. Now we are calling on the new administration take action.
To: The Rt Hon Sajid Javid MP
CC: Prime Minister Boris Johnson, Secretary of State for Business Energy and Industrial Strategy Andrea Leadsom MP, Minister of State for Business Energy and Industrial Strategy Kwasi Kwarteng MP
Re: Proposed VAT changes to solar and storage
Addressing the climate emergency should be top of the government’s to do list. The legally binding target to reduce UK greenhouse gas emissions to net zero by 2050 is an immediate challenge, not a distant goal.
Solar power coupled with battery storage is not just a solution to climate change. It is an economic opportunity which can address the balance of payments whilst creating a sustainable economy fit for the future. However, the UK risks losing out if policy blockers are put in the way.
There are more than one million solar PV installations now in operation across the UK. Their sum capacity totals more than our single biggest power station. This has grown from near-zero within 10 years, showing what can be achieved when we encourage people to be part of the solution to climate change.We need to ensure that this momentum is not lost.
Consequently, this government must not support the proposed VAT increase to 20% on clean energy solutions for households, including solar and storage, whilst it remains at 5% for coal and gas.
Thousands of people have come forward and put their name to a petition that calls on this government to rectify the mistakes of the previous administration, and reverse this change.
The increase in VAT for low carbon products was framed as ‘ensuring UK rules are in line with EU law’. However, the Action Plan on VAT will allow Member States greater flexibility on how the rate is levied across the European Union. This new plan will inevitably impact the UK regardless of our future relationship with the bloc.
Solar power coupled with battery storage is not just a solution to climate change. It is an economic opportunity which can address the balance of payments whilst creating a sustainable economy fit for the future.
Meanwhile the UK’s proposed VAT increase on solar and storage is set to be implemented from the 1stof October — why? Government should ensure any new guidance does not block consumers from generating and storing their own power. The benefits of these clean technologies are too great to waste, especially at a time of such urgency.
The decisions we make now matter if we care about achieving net-zero emissions within a generation. We urge the Treasury to remove this damaging policy and get behind the British solar industry.
Juliet Davenport OBE
CEO and Founder
InnovateUK Council Member
Vice President, Energy Institute
Grantham Institute Advisory Board Member
Renewable Energy Association Board Member
Dr Nina Skorupska CBE, Chief Executive, Renewable Energy Association
Alice Bell, Director, 10:10 Climate Action
Aaron Kiely, Climate Campaign Lead, Friends of the Earth