In the Spring Statement, it was announced that VAT will be cut on low-carbon technologies and materials to 0% for five years to help homeowners cope with the rising cost of living. While some may feel cynical about the scope of this measure, Griff Thomas from GTEC explains why now is the time for installers and homeowners to invest in renewables.
“If you’ve been waiting for the right time to upskill into renewables – or install them in your home – then now is the time,” says Griff. “UK energy costs have gone through the roof in recent months and the need to make homes more energy efficient and reduce monthly bills has become an urgent priority.
“[The] announcement that VAT on low carbon materials – including solar PV, heat pumps and insulation – will be reduced from 5% to 0% VAT was positioned as a way to help homeowners cope with the rapidly rising cost of living, but of course, it’s only relevant to those who can afford it.
“But let me put it another way – if everyone who could generate and store their own power did, the cost of electricity from the national grid would come down for everyone, which would also mean we could get to a point where we didn’t require fossil power stations at all.
“The renewable energy sector has remained surprisingly resilient to the various challenges in recent years. Last year, we added 36% more solar capacity than in 2020, including the highest level of rooftop solar since 2015, when generous subsidies generated promising growth.
“Following [the] announcement, we could see a resurgence in demand for technologies such as solar PV, together with emerging technologies; battery storage systems being a primary example, offering business opportunities for installers with the right skills.
“With continuing volatility in the fuel and energy sector only exacerbated by the war in Ukraine, many homeowners will be forced to consider how they can ease mounting pressure on monthly budgets. For those who can afford it, renewables are a great way of reducing reliance on the grid and mitigating against rising costs.
“While the monthly savings with solar PV can be relatively modest – around £370 per year (depending on system size and property), including payments from the Smart Export Guarantee (SEG) – the addition of complimentary technology, such as battery storage, can see these savings soar.
“By using all the electricity you generate, rather than selling surplus back to the grid for pennies and buying it back for much more, you can be almost self-sufficient. With an electric vehicle (EV) on the drive, this system is hard to fault!
“[The] announcement offers a great opportunity for installers to upskill to meet growing demand for renewable technologies. Does it go far enough to help the population cope with the rising cost of living? Well, no, but it does offer a welcome reduction in upfront costs – something that has been a major barrier to uptake in the past – and will hopefully be enough encourage those who’ve been waiting for the right moment to take the plunge – with knock-on effects for everyone else and an acceleration towards net zero.
GTEC delivers renewables training from its centre in Hawes, North Yorkshire, as well as locations throughout the UK
To find out more about GTEC click here
