The Renewable Energy Association (REA) described the 1st April as ‘a cliff edge for many households’ who will have to make the devastating choice between heating and eating, and the energy price cap rise of nearly £700 will severely worsen the cost-of-living crisis.
Electrotechnical and engineering services body ECA has signed two open letters to Chancellor Rishi Sunak, calling for urgent action to address the cost-of-living crisis and reduce consumers’ energy bills.
ECA joined the REA, Solar Energy UK, and a wide coalition of industry, supplier and environmental bodies calling on the Chancellor to take unprecedented action in his upcoming Spring Statement.
The open letter from Solar Energy UK calls on the Chancellor to reduce the rate of VAT on domestic renewable and energy efficiency technologies to 0%.
The letter adds that the cut in VAT “would help to increase the resilience of individual households and reduce their energy costs, while also increasing our national energy security.”
Increasing the energy-saving resilience of individual households
Solar Energy further explained that cutting VAT on domestic renewables such as solar, domestic batteries, and heat technologies, such as heat pumps, would help to increase the resilience of individual households and reduce their energy costs, while also increasing our national energy security.
This is because any heat or power a home produces and consumes itself does not need to be bought from the grid, reducing costs and increasing the UK’s energy self-sufficiency. Rooftop solar can save individual households well over £400 per year in energy costs, while increasing property values at the same time. Solar, for example, is also extremely popular: according to BEIS’ public attitudes tracker, an astonishing 90% of people support its use.
“Our best chance at tackling the cost-of-living crisis and the climate crisis lies in Government’s ability to prioritise renewable energy, and focus on reaching Net Zero Carbon as soon as possible.
The evidence is no longer up for debate: we have the right tools to cut carbon and lower bills. Let’s start by cutting VAT on domestic renewables,” said Luke Osborne, ECA’s Energy and Emerging Technologies Solutions advisor.
The open letter from the REA, co-signed by ECA and over 20 organisations including Octopus Energy, Good Energy and Ecotricity, urges the Government to take steps including moving ‘green’ levies into general taxation, suspending VAT on energy bills, and establishing an effective home insulation scheme.
Steve Bratt, ECA CEO, said: “Global shocks to the economy have sent energy prices skyrocketing. The price hikes are frightening and are set to plunge millions into fuel poverty. Yet, the solution to energy price volatility is right under our noses. By rebalancing the taxation system in favour of clean energy, fuel bills will come down.
“Clean electricity has the advantage of being a more secure, stable and cheaper energy source than other fuels. Greater Government investment in renewable energy will generate cheaper electricity, and bring long term stability and relief from spiralling prices.”