HM Revenue and Customs (HMRC) has confirmed that 5% rather than 20% VAT will be applied on residential battery storage installations when paired with new solar PV systems.

Currently, the 5% rate will only apply to a single indivisible supply and installation of solar panels with a battery in residential accommodation, where the battery is ancillary to the solar panels. The Solar Trade Association said it would continue to argue for a 5% rate for all household battery storage installations.