Bulb chief executive Hayden Wood and the Association for Renewable Energy and Clean Technology (REA) boss Nina Skorupska are among 32 industry figures who have written to Boris Johnson urging him to scrap VAT on green products.
In February Energy UK called on the Treasury to reinstate the 5 per cent VAT discount for all energy efficiency products and microgeneration measures and installations, after a challenge by the EU in 2019 increased this to 20 per cent. It also called for the list to be expanded to include storage, air-source heat pumps and EV charging equipment.
However the letter, which has also been signed by Citizens Advice chief executive Alistair Cromwell and Ecotricity founder Dale Vince, urges the government to cut the rate to zero.
While it states the sector was “encouraged” with the chancellor pledging investment in green infrastructure projects in the recent Budget, it said there was disappointment at the “lack of policies to help people play a part in reaching net zero”.
It warns that with the Green Homes Grant recently closing and grants for electric vehicles (EVs) being reduced, there is a risk that families will be “priced out of the switch to green technology”.
“With just months until COP26, we’re writing to ask you to take urgent action to make green products more affordable by reducing the rate of VAT charged on them to zero. This would make green technology cheaper for millions of households, and is only possible now we’ve left the EU,” it adds.
The proposed exemption would apply to EVs and charging technology, heat pumps, energy storage devices including heat batteries, solar panels, secondary or double glazing, low-carbon boilers and white goods, as well as insulation and other energy efficiency fittings.
“Scrapping VAT on green products will boost consumer spending in green technologies, stimulate growth and create highly-skilled green jobs in all four corners of the UK. This is particularly important for clean tech businesses, who’ll grow and create jobs as a result,” it says.
In January last year the AA called on the government to scrap VAT for EVs following a poll of more than 17,500 members which found 60 per cent would be more likely to make the switch from petrol or diesel if the tax was cut.