Tepeo, a UK-based ClimateTech scale-up, is calling on the Government to extend VAT relief to a wider range of low-carbon heating technologies, offering up to £2,000 cashback on its ZEB heat battery. The initiative follows the recent Autumn Statement, which revealed that VAT relief would continue only for heat pumps and biomass boilers, leaving out other effective technologies like heat batteries.
While many in the industry have expressed disappointment at the exclusion of heat batteries from VAT relief, Tepeo is taking action by absorbing the VAT cost themselves to demonstrate the potential impact of a more inclusive tax structure. The company’s move is designed to show how VAT relief could support the adoption of alternative low-carbon heating solutions, reduce energy costs for households, and help meet the UK’s Net Zero targets.
Johan du Plessis, CEO of Tepeo, said: “The Government’s decision leaves homeowners with limited access to affordable low-carbon heating options. At Tepeo, we want to show how VAT relief could make a real difference. We are a young company, and absorbing this VAT cost is a significant decision for us, but it’s crucial that UK households are given the opportunity to switch to greener heating technologies without being penalised.”
The ZEB heat battery, which Tepeo is promoting through this initiative, offers a simple and effective replacement for traditional fossil fuel boilers. It integrates with existing heating systems and allows homes to reduce their carbon footprints. Heat batteries, such as the ZEB, also enhance energy security by shifting energy use to off-peak times when electricity is cheaper and greener.
Despite growing support for heat batteries, including a campaign led by Afzal Khan MP, the Autumn Statement did not include VAT relief for this technology. Khan, who has long advocated for low-carbon heating solutions, expressed disappointment but remains committed to pushing for further support for heat batteries. “I will continue to advocate for the increased adoption and rollout of low-carbon heating technologies, such as heat batteries, and hope VAT relief will be included at the next fiscal event,” he said.
Miatta Fahnbulleh, Minister for Energy Consumers, has acknowledged the value of heat batteries for homes with limited space, marking a shift in the Government’s attitude. However, heat batteries still face a financial disadvantage compared to heat pumps due to the lack of VAT relief.
Tepeo’s initiative could play a pivotal role in sparking change, particularly as recent trials of the ZEB have shown its potential to reduce household energy bills and support grid management. The campaign has received backing from leaders across Parliament, calling for a fair tax structure that supports all green technologies, rather than favouring specific options.
Tepeo hopes their move will inspire policymakers to rethink the current VAT structure and create a more equitable system that supports a wider range of sustainable heating options. “If we want to achieve Net Zero, we need a fair and inclusive tax system,” du Plessis concluded. “The time to act is now.”
