Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether he plans to introduce (a) tax credits or (b) other forms of tax relief for energy storage schemes.

As outlined in the British Energy Security Strategy, the Government is committed to encouraging all forms of flexibility in the energy system, including large-scale, long duration electricity storage, hydrogen electrolysers to use surplus low carbon electricity and other battery storage. To support this strategy, there are already some tax reliefs for energy storage schemes

Following the expansion of the VAT relief for energy saving materials announced at Spring Statement 2022, battery storage supplied as part of the installation of any qualifying material, including solar panels, will benefit from a VAT zero rate for the next 5 years

Expenditure on energy storage schemes may qualify for existing capital allowances, depending on the facts of the particular case. For example, the Annual Investment Allowance is available for main and special rate assets, and allows businesses to write off the cost of qualifying plant and machinery investment in one go, up to £1m

The Government keeps all tax and tax reliefs under review with policy announcements expected at fiscal events.