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REA welcomes VAT cut to 0% on Energy Saving Materials
including solar panels, insulation and low carbon heating for
the next five years;
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The change has been long called for by the
REA;
-
Government has also brought forward a planned business
rates exemption for green technologies;
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REA says Government must introduce further measures to
ease energy crisis.
The Association for Renewable Energy and Clean Technology (REA)
have welcomed the Chancellor’s move to cut VAT to 0% on domestic
energy-saving materials.
today announced homeowners
having insulation, solar panels and other energy efficiency
measures installed will pay 0% VAT for the next five years. The
Chancellor suggested that a family having solar panels installed
would see a saving of £1000.
These tax cuts have been called for by the REA for years, who
include the change in their six point plan to tackle the energy
crisis. The REA were also joined by nearly 30 companies and
organisations across the energy industry in writing to the
Chancellor in October last year, calling for the tax
reduction on energy saving materials. That call was repeated
last week.
On top of the VAT cut, the Chancellor has brought forward an
exemption on business rates, making green technology, including
solar panels and heat pumps, exempt from April 2022 - this is
expected to be worth around £170m over the next five years to
support the decarbonisation of buildings.
While welcoming today’s announced support for domestic
renewables, the REA said the Government could still do more to
ease the energy crisis, such as expand the range of technologies
included as Energy Saving Materials, such as energy storage.
Amy MacConnachie, Director of External Affairs at the
Association for Renewable Energy and Clean Technology (REA),
said:
“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.
“We stand ready to deliver an energy future which is
independent, secure, and stable.”
Last week, the REA led a coalition in urging the Government to:
- Move ‘green’ levies into general taxation – it is crucial
that this is ring fenced at an equivalent value;
- Suspend VAT on energy bills – saving households £100 this
year;
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Expand eligibility and increase value of Warm Homes
Discount – ensuring additional support for nine million
households as fuel poverty increases;
- Remove VAT on all domestic renewable and clean technology
– reducing costs and helping households, landlords and local
authorities move away from fossil fuels;
- Establish an effective home insulation scheme – ensure
all houses to be EPC rating C at a minimum, where technically
feasible, by 2024/25;
- Deliver an ambitious domestic heat decarbonisation policy
- expand the Boiler Upgrade Scheme to cover the installation
of millions of low carbon heating devices.
