The Association for Renewable Energy and Clean Technology (REA) has welcomed the Chancellor’s VAT reduction to 0% on domestic energy-saving materials.
The REA called for this change in their six-point plan to tackle the energy crisis, and were also joined by nearly 30 companies and organisations across the energy industry in writing to the Chancellor in October last year, calling for the tax reduction on energy saving materials. That call was repeated last week.
The Chancellor has also brought forward an exemption on business rates, making green technology, including solar panels and heat pumps, exempt from April 2022 – this is expected to be worth around £170m over the next five years to support the decarbonisation of buildings.
The REA said the Government could still do more to ease the energy crisis, such as expand the range of technologies included as Energy Saving Materials, such as energy storage.
Amy MacConnachie, Director of External Affairs at the Association for Renewable Energy and Clean Technology (REA), said:
“The REA warmly welcomes today’s announcement to remove VAT on domestic renewables for five years. We have long campaigned for this change because we know these installations will help protect people from volatile gas prices and reduce their energy bills, while also supporting the transition to Net Zero and providing a catalyst for new jobs and investment across the country.
“The move to bring forward business rate exemptions for green technologies from April 2022, including solar panels and heat pumps, will help to further drive down costs and support the decarbonisation of buildings.
“We now want to see the Government clarify and go further on the range of technologies included as Energy Saving Materials, particularly energy storage, but this is a positive package of measures for our sector.
“We stand ready to deliver an energy future which is independent, secure, and stable.”