Green Building Forum - Proposed 15% VAT increase on PV and/or battery storage in UK

Proposed 15% VAT increase on PV and/or battery storage in UK

TimSmall — Fri, 14 Jun 2019 10:05:08 +0100

The government plans to increase VAT from 5% to 20% for solar PV and/or battery storage from 1st October. Some low income groups and housing associations are exempt.

"The changes will apply to projects where the technology costs of installation are above 60 per cent of the total price. Labour costs will still benefit from the reduced rate of 5 per cent VAT."

https://www.independent.co.uk/environment/climate-change-solar-panels-vat-government-fossil-fuels-sian-berry-a8906361.html

Petition opposing:

https://petition.parliament.uk/petitions/260903

Proposed 15% VAT increase on PV and/or battery storage in UK

djh — Fri, 14 Jun 2019 10:43:14 +0100

Proposed 15% VAT increase on PV and/or battery storage in UK

jamesingram — Fri, 14 Jun 2019 12:43:55 +0100

whilst on this topic
new export tariff to come in Jan 2020
https://www.gov.uk/government/news/new-laws-to-guarantee-payment-for-solar-homes-providing-excess-electricity

Proposed 15% VAT increase on PV and/or battery storage in UK

djh — Fri, 14 Jun 2019 13:03:28 +0100

"At peak, solar has provided more than a quarter of the UKâ€™s energy demands."

Do they mean that, or do they mean electricity demand?

Proposed 15% VAT increase on PV and/or battery storage in UK

CWatters — Fri, 14 Jun 2019 17:34:12 +0100

Posted By: jamesingramwhilst on this topic
new export tariff to come in Jan 2020
https://www.gov.uk/government/news/new-laws-to-guarantee-payment-for-solar-homes-providing-excess-electricity" rel="nofollow" >https://www.gov.uk/government/news/new-laws-to-guarantee-payment-for-solar-homes-providing-excess-electricity

Quote: The government is keen to support households and businesses in being able to store energy in batteries in their homes, which consumers will monitor on their smart meters,...

Have they told the smart meter companies to include a battery meter?

Proposed 15% VAT increase on PV and/or battery storage in UK

djh — Fri, 14 Jun 2019 20:08:11 +0100

Posted By: CWattersHave they told the smart meter companies to include a battery meter?

I don't think they care. They just measure what is imported from the grid and what is exported to it and when. Managing the battery, if any, is a task for the individual.

So I agree their support for batteries looks fairly equivocal.

Proposed 15% VAT increase on PV and/or battery storage in UK

tony — Sun, 16 Jun 2019 07:49:01 +0100

.... "The government is keen to support households and businesses in being able to store energy in batteries in their homes,"

Why? this is the opposite of energy efficiency, it actually encourages wasting energy, storage is inefficient,

We cannot afford to waste energy by storing it! As a nation.

Proposed 15% VAT increase on PV and/or battery storage in UK

jms452 — Sun, 16 Jun 2019 09:39:32 +0100

Posted By: tonythis is the opposite of energy efficiency, it actually encourages wasting energy, storage is inefficient

If you're just using your day generated solar electricity at night then agree you take a hit on the battery inefficiencies.

As we move forwards batteries have the potential to stabilise the grid increasing the efficiency of the whole. e.g.
Charging up off heavy wind at 4am when the grid price is negative.
Kicking in if a power station goes down unexpectedly.
This can make the whole grid more resilient and efficient as power stations don't need to be kept running with no output ready to go as a buffer in case of emergencies.

As I understand it that's the vision anyway

Proposed 15% VAT increase on PV and/or battery storage in UK

SteveZ — Sun, 16 Jun 2019 12:13:32 +0100

When I got a quote recently, I was surprised to find that adding a battery to my existing PV set-up would incur the 20% VAT already. Is it to discourage the practice or is just short term tax revenue generation behind it?
Although I still may go ahead with the Tesla 2 and Gateway idea, I am already looking at my next vehicle being electric, and if it is able to act as a domestic storage battery (Tesla 2 @13kWh versus say Kia eNiro @64kWh). The necessary intelligent 2 way chargers are out there in prototype form already. Nissan is working on one system, and Kia and some others are developing another.
These are based on the Chademo recharging plugs and sockets, but I imagine the rest will be following on. The idea is that your car battery is connected to your domestic supply and can take over if required during a power cut. Also it may be accessed by the utility and power is drawn off down to an agreed level and at an agreed price when the mains supply is under stress. Recharging is at off-peak times and rates or from your own sources, PV, wind etc. Apart from the cost, which might change if the tax regime changes, it seems like a good strategy to me. Any comments?

Proposed 15% VAT increase on PV and/or battery storage in UK

gyrogear — Sun, 16 Jun 2019 12:17:38 +0100

Posted By: jms452As we move forwards batteries have the potential to stabilise the grid increasing the efficiency of the whole.

Agree, but for 'batteries', I suggest reading, ''electric cars"

gg

Proposed 15% VAT increase on PV and/or battery storage in UK

tony — Sun, 16 Jun 2019 13:31:06 +0100

I canâ€™t see the grid efficiency case coming into plat for twenty years or more.

Proposed 15% VAT increase on PV and/or battery storage in UK

djh — Sun, 16 Jun 2019 15:07:46 +0100

Posted By: jms452If you're just using your day generated solar electricity at night then agree you take a hit on the battery inefficiencies.

The most likely case would probably be using solar power stored during the day to power the early evening peak, which is THE peak time for the network, and so should help shaving peak generation capacity. Any surplus solar power generated after that peak would help overnight or could be kept until the following evening.

Proposed 15% VAT increase on PV and/or battery storage in UK

philedge — Sun, 16 Jun 2019 15:21:30 +0100

There would need to be massively more solar PV than we have at the moment to do any charging during the day. At only 25% of the generation capacity, currently we're well short of being able to power essentials let alone having any spare for battery charging.

I suspect we're going to see a big ramp up in renewable install coupled with fundamental change in usage, morethan likely regulated in some way.

Proposed 15% VAT increase on PV and/or battery storage in UK

djh — Sun, 16 Jun 2019 16:30:58 +0100

Posted By: philedgeThere would need to be massively more solar PV than we have at the moment to do any charging during the day.

Sorry, I'm talking about solar generated on somebody's house's roof, as I think that's what John was talking about. In that case, it's entirely up to that person whether they have a battery and how they manage it. I was suggesting what I thought would be a (the) common use case. So there's no question of needing a lot more PV.

Proposed 15% VAT increase on PV and/or battery storage in UK

fostertom — Sun, 16 Jun 2019 17:31:55 +0100

Posted By: tonyWe cannot afford to waste energy by storing it! As a nation.

As renewable energy has zero marginal cost (i.e. once the installation is paid for, the cost of electricitry produced is the same whether a lot, a little or none is produced i.e. zero per unit) and in principle zero environmental impact, there is no need to use it 'efficiently', any more than there's a need for us to enjoy sunshine 'efficiently'.

Only on the argument that squandering it deprives 'the nation' of electricity that could have been used to reduce fossil production, does the idea that "We cannot afford to waste [renewable] energy" come in - that has to be the point of what tony says - is that right tony?

Once all electicity is renewably produced and is in abundant glut, like sunshine, then there's no need to use it efficiently.

There may well be an interim position, come 2050, where all electicity is renewably produced but is in short supply relative to multiple demands incl substitution for the 'hardest' uses of fossil - when nationally speaking demand reduction esp via 'efficiency' will be a top priority felt by everyone.

But the way renewables esp solar, is looking, is that by then it will indeed be in abundant glut, particularly because the capital cost of installation will have become ultra-low, distributed, personal, like mobile phones are today.

Proposed 15% VAT increase on PV and/or battery storage in UK

djh — Sun, 16 Jun 2019 19:57:13 +0100

Posted By: fostertomOnce all electicity is renewably produced and is in abundant glut, like sunshine, then there's no need to use it efficiently.

Your glass is well over half full there, Tom. There is many a slip tween cup and lip, or in this case between lip and reality. I hope you're right, but I fear there a great many other obstacles that will leap out at us along the way, some of which we know and others of which we don't, yet. (Rumsfeld is a great man :)

Proposed 15% VAT increase on PV and/or battery storage in UK

Peter_in_Hungary — Sun, 16 Jun 2019 20:29:48 +0100

Posted By: fostertomBut the way renewables esp solar, is looking, is that by then it will indeed be in abundant glut, particularly because the capital cost of installation will have become ultra-low, distributed, personal, like mobile phones are today.

And how will HMRC replace the lost tax revenues?

Proposed 15% VAT increase on PV and/or battery storage in UK

fostertom — Sun, 16 Jun 2019 21:18:07 +0100

"Rumsfeld is a great man"
Indeed - meaning I guess that monopoly, patent/copyright etc will be used to maintain prices and scarcity, against the 'natural' nature of technology which "wants all sorts of things to be free".

Beyond classical left/right, this is the coming (and present) political battleground - for whose benefit will technology be bent? Interesting new book: Fully Automated Luxury Communism: A Manifesto
https://www.amazon.co.uk/Fully-Automated-Luxury-Communism-Manifesto/dp/1786632624/ref=sr_1_1?keywords=Fully+Automated+Luxury&qid=1560716238&s=gateway&sr=8-1

Proposed 15% VAT increase on PV and/or battery storage in UK

gravelld — Mon, 17 Jun 2019 09:43:51 +0100

I think Dave was referring to Rumsfeld's famous "unknown unknowns" quote.

Proposed 15% VAT increase on PV and/or battery storage in UK

dickster — Mon, 17 Jun 2019 11:01:31 +0100

7 months in with Tesla Powerwall 2. Works like a dream on a small scale. Bobbing along, storing during day, using at night. Last few days have been rubbish, sun wise and have imported E7 overnight to charge battery. Around 15-20% losses doing this. Still, I have shifted my grid usage away from peak times and even exported a little bit. 27 years payback!

Proposed 15% VAT increase on PV and/or battery storage in UK

jamesingram — Tue, 18 Jun 2019 16:37:43 +0100

Dickster . Live long and prosper :-)

Proposed 15% VAT increase on PV and/or battery storage in UK

fostertom — Tue, 18 Jun 2019 17:52:56 +0100

Posted By: gravelldI think Dave was referring to Rumsfeld's famous "unknown unknowns" quote

Oh that - OK

Proposed 15% VAT increase on PV and/or battery storage in UK

revor — Wed, 19 Jun 2019 11:52:15 +0100

if the VAT does go to 20% then that's me out. It is my last bit of going green. Not sure can get it in in time Payback is marginal anyway with another 15% I won't live long enough. Have been doing my green bit spent fortune on insulation (DIY 20%) to achieve PH standard, LED lighting throughout, solar gain via glazing thermal mass, solar thermal HW etc but we need government to do some joined up thinking.

So pellet boilers and heat pumps which still increase CO2 5% VAT solar and MVHR 20%. Gave up on renewing our passports as we would not be flying anymore not that we did much anyway but to renew our driving licence need to do 70 mile round trip to find a post office with a camera to take our photo as not having passports need to attend P.O. Getting a policeman, doctor, solicitor etc to confirm your identity no good anymore. Madness.

What I have spent doing my green bit I could have had a jolly good time travelling the world and would have had more than enough left to pay for all the heating and lighting and driving gas guzzlers to see me out.

Proposed 15% VAT increase on PV and/or battery storage in UK

djh — Wed, 19 Jun 2019 13:03:13 +0100

Posted By: revorto renew our driving licence need to do 70 mile round trip to find a post office with a camera to take our photo as not having passports need to attend P.O.

Why can't you apply by post?

https://www.gov.uk/renew-driving-licence

Proposed 15% VAT increase on PV and/or battery storage in UK

Doubting_Thomas — Wed, 19 Jun 2019 13:57:19 +0100

At the risk of re-igniting a debate from another thread, the official govt line appears to be that they were forced to do change the VAT percentage by a European ruling in 2015.

Anyone know any non-partisan and entirely objective context behind this statement? Is it really that straightforward?

Proposed 15% VAT increase on PV and/or battery storage in UK

djh — Wed, 19 Jun 2019 15:26:18 +0100

I think that's the case, yes, but I don't have any references that come to mind. But some of the crazy details seem to be designed to minimise the impact by special-casing exceptions where permissible. The effect is just to make it even more unfair and complicated than it should be, as is typical of incompetent government trying to be helpful. (also not wishing to re-ignite any flames).

Proposed 15% VAT increase on PV and/or battery storage in UK

revor — Thu, 20 Jun 2019 13:22:29 +0100

Why can't you apply by post?
DJH you are correct but to read the renewal form you would be mistaken one can't do by post. You are given 2 options on line or at PO. When you delve into some of the ancillary info on the back w.r.t reporting a medical issue or similar you need another set of forms for which you need to apply for, and these can also be used for renewal. Why DVLA can't include an option 3 to bring one's attention to doing by post defeats me other than it is less work for them if you go on line or visit the P.O.

Proposed 15% VAT increase on PV and/or battery storage in UK

Peter_in_Hungary — Thu, 20 Jun 2019 14:36:48 +0100

Posted By: Doubting_ThomasAt the risk of re-igniting a debate from another thread, the official govt line appears to be that they were forced to do change the VAT percentage by a European ruling in 2015.

Anyone know any non-partisan and entirely objective context behind this statement? Is it really that straightforward?

AFAIK The minimum VAT allowed by the EU is 15% so a rise to 20% can't (all) be blamed on the EU.

Also my understanding is that a VAT rate below 15% before 1991 can remain low until it is raised and then the new level becomes the floor (or 15%) so if PV was 5% VAT prior to 1991 it could remain there until raised.

UK Governments of both sides frequently use the EU as an excuse that on examination proves to be 'fake news'

I suppose the truth will out after Brexit when the UK could reduce the VAT to pre Brexit levels !

Proposed 15% VAT increase on PV and/or battery storage in UK

WillInAberdeen — Thu, 20 Jun 2019 15:01:18 +0100

DoubtingTom, did you mean the government line here https://www.gov.uk/government/consultations/draft-legislation-vat-reduced-rate-energy-saving-materials-order-2019

They can apparently reduce the vat to 5% under EU tax harmonisation, if you are buying building modification works, which have some materials included. But if you are buying a product with some installation included, then it's full vat, unless there's some 'social' aspect. The cutoff is when >60% of the price is materials.

"If the value of the energy saving materials exceeds 60%,
then only the labour cost element will qualify for the reduced rate (with the supply of the materials standard rated)."

Revor, actually there's no mention of PV or batteries in the legislation. If your supplier has cheap PV panels that are expensive to install, they can still charge you 5% on the whole job. However the work we have done DIY has always been 20% vat on materials.

Proposed 15% VAT increase on PV and/or battery storage in UK

marktime — Thu, 20 Jun 2019 15:14:27 +0100

Posted By: jamesingramDickster . Live long and prosper :-)

Amen to that!