The chancellor has announced that VAT will be scrapped on home energy-saving measures such as insulation, solar panels and heat pumps. Something that the ADE has campaigned for extensively. The chancellor also announced that he is bringing forward the already announced business rates relief for low-carbon heat networks to April 2022. Without further government support, energy customers, including those on heat networks, face unsustainable price rises. Chancellor Rishi Sunak’s announcement that VAT will be cut for 5 years on energy saving measures is a great step forward for the energy efficiency industry and for households that are looking to save money on their bills and lower their carbon emissions, says the Association for Decentralised Energy (ADE). The ADE launched a campaign earlier this year calling on the Treasury to remove VAT on energy efficiency retrofits. In an open letter, 23 signatories, including 16 ADE members, wrote to the Chancellor calling for the VAT rate on energy efficiency retrofit measures to be cut to 0% to help the government deliver on its emissions reduction targets. However, the trade body warns that the lack of any further measures to counter very high energy bills, including for those on heat networks, have left the industry wanting. Without government support for customers, they face unsustainable price rises. It was revealed that the already announced business rates relief for low-carbon heat networks will be brought forward to April 2022, but no other measures were mentioned regarding heat networks. Caroline Bragg, Director of Policy and Research at the ADE, says:The support announced today by the Chancellor, including the VAT cut to energy saving measures which we have campaigned for extensively, is welcome. However, these measures are not enough on their own to combat the extreme rise to the cost of living that many households are facing. More action from Government is needed. Further, while it is encouraging that the business rates relief for low-carbon heat networks will now be brought forward, many heat network customers are facing unsustainable price rises. It is disappointing that no further measures were included regarding this.For more information please contact:Jonny Bairstow, Head of External Affairs - jonny.bairstow@theade.co.uk
