Decarbonising home heating is one of the UK’s biggest hurdles to reaching net zero. More than 80 per cent of homes in England (around 21.2 million) still rely on gas, and domestic heating accounts for around a fifth of national emissions. Unless we change how we heat our homes, net zero will remain out of reach.
So far, most of the policy focus has gone to heat pumps, which are rightly recognised as a vital technology for decarbonising our homes. But, for the UK’s diverse housing stock, where 20% of London homes do not have outdoor space, they cannot be the only solution. The UK needs a mix of options so that every household, in every type of property and at every income level, can take part in the transition. Heat batteries, developed here in Britain by companies such as tepeo in Wokingham, can provide exactly that.
Heat batteries are designed as simple, “plug and play” replacements for fossil-fuel systems. They can be retrofitted into homes without major disruption and require no outdoor space. This makes them especially well-suited to smaller properties and lower-income households, where space and cost can otherwise make the switch to greener heating difficult.
Encouragingly, the government has begun to take notice. With the extensive support of MPs and Peers from across the political divide and close collaboration with DESNZ, heat batteries were consulted on for inclusion in the Boiler Upgrade Scheme earlier this year, a welcome recognition that they are a credible alternative to heat pumps. Heat batteries also now benefit from an MCS-certified installation standard, giving consumers the same protection as for other low-carbon heating technologies.
But one glaring anomaly remains: VAT. At present, energy-saving materials such as solar panels, heat pumps and domestic batteries all qualify for VAT relief. Heat batteries do not. This creates an uneven playing field that deters households from choosing a technology that may be better suited to their home, or indeed be their only option to decarbonise their heating.
VAT relief is one of the most effective and low cost tools the government has for driving uptake of green technologies. We have already seen how removing VAT from solar panels and heat pumps has helped households take the leap. Extending this simple, proven mechanism to heat batteries is the logical next step. It would help more families make affordable green choices, stimulate British manufacturing, and accelerate emissions reductions.
The Autumn Statement offers the government the perfect moment to fix this policy gap. Cutting VAT on heat batteries would cost little but deliver outsized benefits, empowering households, boosting our net zero economy, and ensuring that smaller homes and lower-income families are not left behind in the race to decarbonise.
MPs now have an opportunity to make their voices heard. By joining the campaign to Scrap the VAT on heat batteries for central heating, they can help ensure that this year’s Autumn Statement delivers a practical win for consumers, industry, and the climate alike.
Heat batteries are not a niche innovation. They are a mainstream solution in waiting, ready to benefit millions of households. British companies are ready to build them. Families are ready to install them. The missing piece is government action.
The case is clear. The time to act is now. It’s time to Scrap the VAT.
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By Johan du Plessis, CEO of tepeo
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