The UK has been making good progress towards our Net Zero target by building lots of renewable energy capacity. However, the unpredictable and intermittent nature of renewable generation causes a mismatch of supply and demand on the Grid, which today means that excess solar and wind energy are wasted and carbon intensive electricity has to be used when there is no wind or sun. Smart home energy storage is a key part of resolving this problem by enabling homeowners to store low carbon electricity from wind and solar when there is an excess and use it later when there is a shortfall, and so reducing the overall carbon intensity of the UK’s electricity consumption.

Whereas other technologies that support our journey to the UK’s net zero carbon target are supported, there is currently no Government support for domestic energy storage. Furthermore, the current VAT rate on carbon intensive domestic energy such as coal, oil and gas is 5%, whereas it is 20% for home electricity storage. To us this seems crazy in a country committed to achieving Net Zero by 2050.

This year Powervault have been lobbying the Government, first writing to the Prime Minister, which resulted in a meeting with the Rt Hon Kwasi Kwarteng MP (Minister of State for Business, Energy and Clean Growth).

We are asking Government to take two key actions:

• Permanently reduce the VAT rate for home energy storage to no more than 5%, so it is at least on a level playing field with carbon intensive energy such as coal, oil and gas
• Provide a temporary incentive scheme to encourage householders to install home energy storage, such as inclusion in the Green Homes Grant or a scheme equivalent to grants for EV ownership or EV charging equipment.

Since that meeting, with the REA we have helped to create a cross industry coalition through an REA working group chaired by Powervault’s Nick Wood, to strengthen this message much further.

Yesterday the REA sent this letter to HM Treasury and the Department for Business, Energy and Industrial Strategy, signed by over 30 key industry players, including the National Grid, EDF, and Ecotricity – https://www.r-e-a.net/wp-content/uploads/2020/12/Joint-letter-Fair-Treatment-for-Home-Energy-Storage-1.pdf.

See also the REA’s press release at https://www.r-e-a.net/rea-and-industry-call-for-domestic-energy-storage-vat-cut/

Joe Warren, Powervault’s Managing Director states “Home energy storage is a key part of our journey to net zero as we need to store renewable energy to power and heat our homes and fuel the increasing number of electric vehicles. Locating energy storage in the home also supports the network and is a key enabler for the roll out of more solar PV and electric vehicles. It doesn’t make sense that VAT rates for coal and gas supplies, when used in private homes, are 5% while energy storage has a VAT rate of 20%. It’s imperative that home energy storage can operate in a level playing field – rates of 20% make this more difficult.

Secondly, until the roll-out of smart meters and half hourly settlement when home electricity prices reflect the disconnect between when the wind blows and the sun shines and actual electricity demand, homeowners with domestic energy storage will not be properly rewarded for storing ‘cheap’ low carbon electricity and reducing their use of ‘expensive’ high carbon electricity at times of peak demand, so temporary support is needed until this situation changes.”

We really do believe that home energy storge is a key part of achieving the UK’s journey to Net Zero and Government policy needs to change now to help make this a reality in the UK.

We hope to have some good news soon.

If like us, you believe that home energy storage is a key step on the journey to Net Zero, please do email your MP now by using the details at www.writetothem.com.