Yes. As previously mentioned in our response to Question 1 we think that the installation of domestic EV chargepoints and thermal storage technologies meet the three qualifying objectives and should receive VAT relief.
EV chargepoints, especially those which are able to export to the grid or allow for in-home demand flexibility can save households significant amounts of money while reducing the strain on the grid at peak times and therefore cutting emissions by reducing reliance on fossil fuels to meet peak demand.
Thermal storage, likewise, can help to shift energy demand for heating away from peak times. Both conventional thermal storage, such as additional tanks for hot water and more innovative heat battery technologies, can be used for home heating, water, and shifting peak heat load for heat pumps, effectively creating a ‘smart’ heat pump. Heat batteries use stored electricity to turn the material in the cylinder from a solid to liquid material and back again, releasing thermal energy as heat.
While installing these technologies alongside heat pumps is currently considered as part of the ESM VAT relief, if retrofitting this storage to an existing heat pump or upgrading the storage this is not eligible. We believe strongly that the same rationale applies in this case as applies to retrofitting battery storage technologies.
As well as EV chargepoints and thermal storage, we think there is a strong case for including Water Source heat pumps and smart home heating controls in the VAT relief regime.
Water Source heat pumps (WSHP) function similarly to Air Source and Ground Source heat pumps, using a liquid refrigerant, compressor, and evaporator system.1 The only aspect that differs is the ‘source’; WSHP utilise the heat from water sources.
While this technology is less common than Air Source and Ground Source heat pumps they are often more efficient than either ASHPs or GSHPs and we see no reason why this technology should be excluded from the 0% VAT relief. WSHPs meet the three objectives in the same way that other heat pump technologies do.
We believe that certain classes of smart home heating controls should be given 0% VAT rate relief. Our view is that all Class VI and Class VIII multi-zonal controls should receive VAT relief. Class VI controls are weather compensators and room sensors. This definition allows for controls to include both weather and load compensation functionalities. Multi-zonal controls allow different zones in a property, typically different rooms, to be heated differently.
These controls allow for more efficient temperature adjustment and automatic heating regimes and help to improve the in-use efficiency of heating systems. These technologies have been shown to save significant amounts of energy (as much as 5% for multi-zonal controls according to Delta Dore2). The recent ‘Improving boiler standards and efficiency’ consultation proposed requiring these controls to be installed as part of an enhanced BoilerPlus regime.
We supported this proposal and think that consumers should be incentivised to install these controls even when not installed alongside a new gas boiler. 0% VAT rating these technologies will offer this additional incentive as currently Class VI controls retail at similar prices to controls from lower classes with less functionality.
