Jess Ralston, analyst, Energy and Climate Intelligence Unit (ECIU): “Removing VAT on energy efficiency products such as insulation is an immediate boost for families facing soaring gas bills. But there are lots more tools within the Chancellor’s grasp for getting off Russian gas and reducing household bills.

“Low interest loans have been hugely popular in Germany and could unleash private sector investment into sealing up our leaky homes, while net zero policies like incentivising the switch away from gas boilers will help to shield Brits from future fossil fuel market volatility.

“More announcements are expected in the Prime Minister’s upcoming energy security strategy, and to truly insulate homes from sky high gas bills in the longer term, more levers will need to be pulled.”

Mike Foster, chief executive, Energy and Utilities Alliance: “The Chancellor has clearly not heard the outcry over rocketing energy bills faced by millions. He has done nothing in the Spring Statement to help the vast majority of consumers who face bills doubling this year.

“His VAT cut on solar panels and heat pumps will be welcomed by those who make them and by those who can afford to fit them, but a VAT cut on energy bills would have helped everyone.

“Frankly, consumers waiting to hear good news on their energy bills will be left asking, ‘is that it Chancellor?’”

Nick Molho, executive director, Aldersgate Group: “We strongly welcome the Chancellor’s announcement to remove VAT from a broad range of energy efficiency and renewables investments in homes. These measures will help make domestic energy efficiency and clean energy projects more attractive and help lower consumer bills.

However, in light of the significant energy security and gas price crisis facing the UK, the Government should also be looking at introducing supplementary measures to drive greater investment in energy efficiency and low carbon heat in homes. These could include the introduction of regulatory energy efficiency targets, incentives introduced through the UK Infrastructure Bank such as 0% interest loans for energy efficiency measures and further grants for heat pumps, as well as a dedicated programme to accelerate skills development in energy efficiency and low carbon heat installation.”

Rt Hon Philip Dunne MP, chair, Environmental Audit Committee: “Removing VAT on energy efficiency measures – as we called for in our Energy Efficiency report – is a significant win for the sector that has been calling for this for a long time. In evidence to our Committee we heard how VAT is the largest obstacle to homeowners making low carbon improvements. Improved installation and retrofitting has the potential to reduce bills while slashing some of the 20% of emissions emanating from UK homes. Heat pumps and solar panels will then help to power our homes in an effective, low carbon way. This is a major vote of confidence in net zero, and I welcome the Chancellor’s announcement today.

“The Chancellor said this would add up to £250 million tax cut to energy efficiency. A homeowner installing rooftop solar panels could save £1,000 on installation and cut their annual energy bills by £300.”

Niamh O Regan, researcher Social Market Foundation, said on energy efficiency: “The cost-of-living crisis is being fueled by soaring gas prices and Russia’s aggression is fanning the flames. Insulating Britain’s homes will go a long way to protect households, slash bills, and lower emissions and so the Chancellor’s VAT cut for home energy efficiency improvements is a welcome intervention today.
“The duration of this relief signals confidence to industry where previous schemes have often been too short-term and unsuccessful. But in practice, it is unclear if a relief of £50 million a year is any way near enough for a country where most homes are drafty, leaky, and reliant on gas heating. With the Energy Independence Strategy expected next week, the Chancellor now has the chance to take these measures one step further to drive the UK towards cleaner, cheaper energy.”
Anthony Ainsworth, COO, npower Business Solutions: “Although the Spring Statement is always designed to be a ‘mini Budget’ ahead of the full Budget in the Autumn, it was hoped that there would be more announced to support businesses – particularly those in energy intensive industries – facing growing energy costs and increased supply chain issues while still recovering from the impact of Covid-19.
“However, the Chancellor seemed to defer to the forthcoming Energy Security Strategy, which is due to be published imminently. It is vital that this supports businesses to help them invest in measures to become more energy resilient and energy efficient to help counter the rise in prices caused by the highly volatile wholesale markets…
“Addressing the current cost of living crisis was undoubtedly the main focus for this Spring Statement. We just hope there is more to come for businesses in the coming weeks to help them become more resilient, while also supporting our long-term net zero goal.”

Jonathan Maxwell, chief executive, Sustainable Development Capital: “A cut on VAT for energy saving measures is good news, but so much more needs to be done to promote energy efficiency. Most of the public will be shocked to learn that we waste two-thirds of the world’s energy. Policymakers must grasp the potential and very real attractions of energy efficiency, and make it a priority. After all, the cheapest and cleanest energy is the energy we don’t use.

“While we are pleased to see energy efficiency rightly receiving attention in the Government’s spring statement, it must be addressed with urgency in the upcoming energy security strategy.”

Amy MacConnachie, director of external affairs, Association for Renewable Energy and Clean Technology: “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.

Deirdre Michie, chief executive, Offshore Energies UK: “The OBR figures published today show that the oil and gas industry is forecasted to pay £15.7 billion in taxes over the next three years, significantly more than expected last October. £11 billion of that is forecasted to be paid by the end of 2023.

“A predictable and stable fiscal regime will ensure industry continues to attract investment in energy supplies, support energy security, and accelerate net zero. We will work with the government as they look to encourage capital investment across the UK in support of this.

“Our industry needs long term confidence in the UK, allowing us to make major investment decisions in both oil and gas production and the new low carbon technologies including Carbon Capture and Storage, hydrogen and offshore wind.”

Phil Hurley, chair, Heat Pump Association: “The Spring Statement comes with great news for the heat pump industry and households today. The HPA has been working hard behind the scenes calling for financial incentives to tackle the barriers to heat pump uptake, and the decision to cut VAT from 5% to zero on energy-saving measures is an important step forward.
“Whilst this decision alone will not be enough to enable all households to access technologies such as heat pumps, we are confident that it will play a role in helping to accelerate the switch to low carbon heat. But we must remember that more steps still need to be taken to support the rollout of heat pumps, including the removal of illogical environmental levies on electricity.”