The government is being urged to stop the proposed VAT increase for solar and battery storage technologies by industry, environmental groups and more than 17,500 people.
Under the new law proposed by HM Revenue and Customs (HMRC), the VAT for new solar and energy storage products will increase from 5% to 20% from October, whilst it remains at 5% for coal and gas.
The legislation was put forward earlier in June, despite strong opposition from industry.
A letter to Chancellor Sajid Javid, Prime Minister Boris Johnson, Business and Energy Secretary Andrea Leadsom and Energy Minister Kwasi Kwarteng is calling on the government to “rectify the mistakes of the previous government” and reverse the change.
Signatories of the letter, led by CEO and Founder of Good Energy Juliet Davenport, include the Renewable Energy Association (REA), 10:10 Climate Action and Friends of the Earth.
A total of 17,506 people – and counting – have also signed the petition, initially launched when former Chancellor Philip Hammond was a Cabinet minister.
The letter says addressing the climate emergency should be “top of the government’s to-do list” and that solar power, coupled with battery storage, is not just one of the solutions but an “economic opportunity” which can address the balance of payments whilst creating a sustainable economy.
It adds: “However, the UK risks losing out if policy blockers are put in the way.
“There are more than one million solar PV installations now in operation across the UK. Their sum capacity totals more than our single biggest power station. This has grown from near-zero within 10 years, showing what can be achieved when we encourage people to be part of the solution to climate change. We need to ensure that this momentum is not lost.
“Consequently, this government must not support the proposed VAT increase to 20% on clean energy solutions for households, including solar and storage, whilst it remains at 5% for coal and gas.”
An HMRC spokesperson said: “The government is proposing changes that retain as much of the VAT relief as possible for energy-saving materials while ensuring compliance with EU law.”
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