Battery Storage Installer Margin 2025/26

From February 2024, the installation of battery storage systems in domestic properties is zero-rated for VAT in the UK — the same as solar panels. This means homeowners pay no VAT on the battery unit or installation labour, significantly reducing the cost compared to previous years when the standard 20% VAT rate applied to standalone battery retrofits. Commercial installations remain subject to 20% VAT. The zero rate applies when installed by a VAT-registered business.

DC-coupled battery storage is integrated with the solar PV system before the inverter, using a hybrid inverter that manages both solar and battery simultaneously. This is more efficient (less energy conversion loss) and is best installed alongside a new solar array. AC-coupled batteries (e.g. Tesla Powerwall, GivEnergy AC) are connected after the inverter and can be retrofitted to any existing solar system or used without solar. AC-coupling is slightly less efficient but far more flexible and is the dominant technology in UK retrofit installations.

Annual savings from home battery storage depend heavily on energy consumption, solar generation and tariff type. For a typical UK home with a 4kW solar array and 10kWh battery, savings are typically £300–£700/year by maximising self-consumption and avoiding peak import rates. Homes on time-of-use tariffs (Octopus Agile, Go) can save more by charging the battery at cheap overnight rates (2–8p/kWh) and using the stored energy during peak evening periods (20–35p/kWh). Payback periods are typically 8–14 years for battery-only; shorter when combined with solar.