In December 2023, the UK government announced that it will abolish 20% VAT on the battery energy storage systems (BESS) from 1 February 2024 in a bid to further boost energy efficiency. The move extends beyond previous VAT relief, which was limited to batteries installed alongside solar panels. Now standalone battery installations and retrofitted batteries are included as well.
This means that energy storage systems will become much more economically viable as an important part of green energy utilization. The reduction in VAT will not only lower the acquisition cost of these systems but will also make them a more attractive investment for consumers. In addition, the industry has also called on the government to further amplify the scope of tax relief to include thermal storage and electric vehicle(EV) charging facilities.
The introduction of this policy is also fully aligned with the UK's ambition to achieve the Net-Zero goal by 2050. It demonstrates the UK's commitment to tackling climate change and building a sustainable future. According to Wood Mackenzie, the UK is the 2nd largest distributed energy storage market in Europe and the 3rd largest residential market in Europe over the next decade. In 2023, the yearly added installations of energy storage systems reached around 355 MWh in the residential sector, and it's estimated that the number will be 580 MWh by 2032. The decision to eliminate VAT on battery storage systems is expected to further boost the growth of the UK energy storage market, and accelerate the transition to a renewable energy future.
Currently, more than 10,000 families in the UK are using battery storage solutions, both in conjunction with and without solar panel systems. Considering the high retail electricity price and growing EVs share, these families hope that using storage batteries will help them become energy-independent and cut their electric bills while reducing their carbon footprint. At the same time, they may encounter some difficulties, for example, the initial cost of batteries is high, the installation and maintenance of the system is too complicated, and there may not be enough space for installing the energy storage system.
Dyness, as one of the main players in the UK energy storage market, is committed to providing energy storage solutions meeting local market demands with continuous innovation and quality services.
Dyness launched a range of low-voltage energy storage products for the UK market, including one featured battery product DL5.0C, standing out for its safety, durability, and wide compatibility with leading inverters such as Solis and SMA, etc. The DL5.0C is a 5.12 kWh battery that perfectly caters to the needs of a typical household. A UK family of 4 person uses around 10 kWh of electricity per day, which means that 2 DL5.0C will cover their electricity consumption for the day. The 1C charge/discharge ratio and 95% depth of discharge of this system ensure high system efficiency and capacity utilization.
The DL5.0C adopts a lightweight design and supports wall-mounting, floor-mounting, and stacking installation, taking up less space. In addition, it also supports real-time battery status monitoring and remote program upgrade for easy maintenance. The local technical support team can also provide timely after-sales service for users.
In the case where capacity expansion is required, the modular product boasts efficient parallel connection with up to 50 units. Then it could become an energy storage system of 256kWh, able to supply reliable power for light commercial scenarios such as supermarkets, hotels, and factories.
In 2023, DL5.0C provided power support for over 1200 families in the UK. By using this battery storage system, households and enterprises could lower their dependence on the grid, reduce their electricity bills, and become more independent in their electricity supply. What's more, Dyness' solutions can also alleviate users' concerns about lack of installation space and high maintenance costs.
In the context of VAT abolition, the UK families and businesses that are chasing a sustainable energy future will gain more economy in energy storage applications, and it will also affect the structure of battery storage installations, bringing more possibilities to the UK energy storage market. To meet the growing demand, Dyness will continue to provide innovative solutions to enable UK households to become more self-sufficient. Dyness is committed to driving the UK market towards net-zero emissions by placing local customers at the very center and improving product performance.