Government answers ECA and industry calls for 0% VAT on renewables

ECA has welcomed the announcement by Chancellor Rishi Sunak to cut VAT on energy efficiency and renewable technologies to 0%.

In line with ECA’s recent calls for government to take urgent action against rising energy bills, the Chancellor today announced that, for the next five years, VAT will no longer be paid on domestic renewable energy installations and energy efficiency measures. This includes solar PV panels, heat pumps, and insulation.

ECA recently joined the Renewable Energy Association (REA), Solar Energy UK, and an unprecedented coalition of organisations calling on government to take action in its Spring Statement.

The Chancellor said that a family with a solar PV panel would see tax savings worth £1,000, and a reduction of £300 per year on their energy bills.

ECA’s Energy and Emerging Technologies Solutions Advisor Luke Osborne says: “The industry breathes a sigh of relief at today’s announcement by the Chancellor. These are measures that will ultimately boost long-term growth for the economy, leaving families better-off, and our nation better protected from the impacts of global crises on energy prices.

“However, there is no time to rest easy – the electrotechnical sector must seize this opportunity to focus on delivering the installations and energy efficiency measures that will result in cheaper bills and lower carbon emissions for consumers.

“Only with the right investment in apprenticeships, skills and competence will that ambition be realised. While it is reassuring to have backing from the government, there is a lot more that needs to be done.”

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