0% VAT on Home Battery Storage (2024–2027): What It Means for Scottish Homes

From February 2024 to March 2027, UK households can save around £1,000 with zero VAT on battery storage installation. Learn how this impacts savings, payback periods, and smart energy options for homes in Scotland.

JME

JME Green Energy

Energy Expert

May 11, 2025•3 min read

0% VAT on Home Battery Storage (2024–2027): What It Means for Scottish Homes

From 1 February 2024 to 31 March 2027 the UK charges no VAT at all on the supply and installation of domestic battery-storage systems. For households in Stirling, Bridge of Allan, Dunblane, Bearsden, Milngavie and the wider Central Belt, that instantly chops around £1,000 off a typical 5 kWh retrofit and accelerates pay-back by several years. Below you'll find the key facts, savings maths and the practical next steps JME Green Energy can take to get a zero-VAT battery working in your home before the window closes in 2027.

At a Glance

Zero VAT

No VAT on home battery storage from Feb 2024 to Mar 2027, saving approx. £1,000 on installations.

Payback Period

Reduced from 13 years to 9-10 years, with smart tariffs further improving ROI.

Cost Benefits

Save £250-£350/year through energy arbitrage, even without solar panels.

Smart Charging

Import at 7-10p/kWh overnight and discharge during peak times when rates are highest.

Universal Relief

No paperwork or means testing required to benefit from the VAT exemption.

Why did the UK scrap VAT on home batteries?

HM Treasury used the Value Added Tax (Installation of Energy-Saving Materials) Order 2024 to add electrical storage batteries to the zero-rated list, aligning them with heat pumps and solar PV. HMRC's manual (section VENSAV3061) confirms the change applies to retrofits and stand-alone installs as well as batteries fitted alongside new panels. Trade bodies welcomed the move: SolarPowerPortal called it "the VAT scrap homeowners have waited for", and Solar Energy UK said it "super-charges the economics of solar-plus-storage".

How much can Scottish homeowners save?

Home Size	Energy Use	Solar System Size	Estimated Cost
Wee flat	1,800 kWh	2-3 kW	£2,500 - £5,500
Average house	2,700 kWh	4-5 kW	£5,000 - £8,500
Big family home	4,100 kWh	6 kW	£9,500 - £10,500

Will smart tariffs like Octopus Flux boost pay-back?

Yes. Intelligent Octopus Flux lets approved battery owners import at 7–10 p/kWh overnight and export at up to 27 p/kWh 16:00–19:00. Cycling a 5 kWh battery once per day on those rates can flip ~£350 / yr in "energy arbitrage" before you add any solar-self-consumption benefit.

Payback Scenario: 4kW System

Assumptions:

System Cost: £6000.00 (Quality MCS Installation)
Annual Generation: 3,400 kWh
Grid Electricity Price: 25.8p / kWh
Self-Consumption: 50% (1,700 kWh)
Exported Power: 50% (1,700 kWh)

Step 1: Savings from Self-Consumption

1,700 kWh * £0.26/kWh = £438.60 saved / year

Step 2: Earnings from Export (SEG)

Basic SEG Rate (4.1p/kWh):

1,700 kWh * £0.04/kWh = £69.70 earned / year

Better SEG Rate (15.0p/kWh):

1,700 kWh * £0.15/kWh = £255.00 earned / year

Step 3: Total Annual Benefit

With Basic SEG:

£438.60 + £69.70 = £508.30 / year

With Better SEG:

£438.60 + £255.00 = £693.60 / year

Step 4: Estimated Payback Period

With Basic SEG:

£6000.00 / £508.30 ≈ 11.8 years

With Better SEG:

£6000.00 / £693.60 ≈ 8.7 years

Note: This is an example calculation. Your actual savings and payback period will vary based on your specific circumstances.

Is battery storage worth it without solar panels?

For many Central-Belt homes on time-of-use tariffs, yes. Even without PV, a battery charged off-peak and discharged at peak can save ~£250 / yr on a two-rate tariff, equivalent to 7–8 % off the average Scottish electricity bill. Add panels later and the economics only improve.

Who benefits most?

Home Size	Energy Use	Solar System Size	Estimated Cost
Wee flat	1,800 kWh	2-3 kW	£2,500 - £5,500
Average house	2,700 kWh	4-5 kW	£5,000 - £8,500
Big family home	4,100 kWh	6 kW	£9,500 - £10,500

Market momentum: more installs, better tech

MCS logged a record 220,000+ renewable installs in 2023, with domestic batteries the fastest-rising category. Solar Energy UK's April 2025 outlook says Britain could run 50 GW of home-battery capacity by 2035—scale that drives innovation, choice and price drops.

Finance update: Home Energy Scotland

Home Energy Scotland's Grant & Loan scheme closed to new solar-and-storage referrals on 6 June 2024. The 0 % VAT relief, however, is universal and automatic—no paperwork, no means testing.

FIT customers: will a battery cut my payments?

Ofgem's Generator Guidance v18 confirms that adding storage does not affect deemed-export Feed-in Tariff payments, so you keep every penny of your legacy FIT.

How JME Green Energy delivers a future-proof install

On-site survey & load modelling – we size the system around your usage, tariff and roof (if solar is present / planned).
Certified installation – NICEIC & MCS engineers handle all wiring, G99 paperwork and safety checks.
Smart-tariff setup – we walk you through Octopus, E.ON or any other ToU app to unlock the best rates.
Scalable design – our AC-coupled systems let you add more panels, a heat pump or a second battery later without rewiring.