HM Revenue & Custom proposals to increase VAT on solar panels will hinder the country’s progress towards a net zero economy, Committee on Climate Change (CCC) chief Chris Stark has said. Stark was giving evidence to the Business, Energy and Industrial Strategy (BEIS) select committee yesterday when he was asked by Labour MP and committee chair Rachel Reeves about the potential shape of a future power sector. Reeves referenced both the effective ban on onshore wind developments and HMRC’s recently-announced proposals to remove the discounted rate of VAT on energy saving materials, including solar panels and battery storage units, effectively increasing VAT from 5% to the full 20% rate. Having unveiled its advice for a net zero economy for 2050 last week, Stark spent much of the evidence session advocating for an “unprecedented” increase in low carbon power generation to help reduce emissions over the next decade, described by him as a critical period. And Stark added further that simply put, HMRC’s VAT proposals would hinder the UK in attaining a net zero status. “We will need to throw everything at this challenge, including onshore wind and solar for that matter. Anything that makes it harder is clearly not in line with the net zero challenge over all,” he said.
Solar Power Portal 9th May 2019 read more »
Raising VAT on solar panels from 5 per cent to 20 risks making their installation “entirely uneconomic”, experts have warned. Although parliament declared a climate emergency earlier this month, rates for fossil fuels including gas and coal will remain at 5 per cent, while materials for some renewables will see tax rises of 15 per cent. These rates will apply from 1 October and follow a consultation by HMRC which closed last week. The VAT hike on materials for solar panels and also battery storage, came as the government’s official advisory body on climate change recommended the UK reaches net zero fossil fuel emissions by 2050. Eight countries in the European Union have called on the bloc to implement similar goals. Sian Berry, co-leader of the Green Party told The Independent: “A climate emergency has been officially declared, yet we could not have had a clearer sign that the government has failed to even begin to grasp the urgency. Renewables, with energy conservation, are the future, yet once again the government is knocking them back.
Independent 9th May 2019 read more »