tepeo Covers VAT on the ZEB to Challenge Government on VAT Relief

WOKINGHAM, UK. 27th November, 2024 - tepeo, a UK-based ClimateTech scale-up, is making a strong statement on the need for broader VAT relief for low-carbon heating solutions by offering up to £2,000 cashback on its ZEB heat battery*. This initiative follows the Government’s Autumn Statement, which revealed that only heat pumps and biomass boilers would continue to receive VAT relief. This exclusion leaves out other effective technologies like heat batteries, which could support millions of households in upgrading to low-carbon heating.

While the Government’s oversight to extend VAT relief to a broader range of low-carbon heating technologies has disappointed many in the industry, tepeo is stepping in to demonstrate what a level playing field could look like. By absorbing the VAT cost themselves, tepeo aims to highlight the potential impact of extending VAT relief to alternative technologies like heat batteries, which could reduce energy costs and accelerate progress toward the UK’s Net Zero goals.

"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,” said Johan du Plessis, CEO of tepeo. “We’re 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 VAT discount offered by tepeo aims to make low-carbon heating more accessible, particularly for homes unsuitable for traditional heat pumps. The ZEB, a simple replacement for fossil fuel boilers, integrates with existing heating systems and helps households reduce their carbon footprint.

Heat batteries, like the ZEB, also enhance energy security by shifting energy use to cheaper, greener, off-peak times. Despite a campaign by Parliamentarians and Industry Leaders, led by Afzal Khan MP, the Government's Autumn Statement did not include VAT relief for heat batteries.

Afzal Khan MP commented: “Prior to the Autumn Statement, the Government took the decision to enable social housing providers to claim up to £15,000 per property for the installation of alternative low-carbon heating solutions, such as heat batteries. Awarding VAT relief to heat batteries represented the next natural step for the Government, which would have further incentivised the adoption of low carbon home heating.”

Khan continued: “Whilst this isn’t the outcome that I, my colleagues or industry would have hoped for, I will continue to advocate for the increased adoption and roll out of low carbon heating technologies, such as heat batteries, which I hope will be awarded VAT relief at the next fiscal event.”

Meanwhile, Minister for Energy Consumers, Miatta Fahnbulleh, has recognised heat batteries as valuable for homes with space constraints, marking a positive shift in Government attitudes. Nonetheless, heat batteries remain at a financial disadvantage compared to heat pumps.

The heating industry, supported by leaders across Parliament, is rallying behind tepeo’s call for a fair tax structure that supports all sustainable heating options. With recent trials of the ZEB showing its effectiveness in reducing household bills and managing the electricity grid, tepeo’s VAT-related discount could spark a much-needed change in government policy.

"We hope our initiative will inspire policymakers to take action," concluded du Plessis. "If we want to achieve Net Zero, we need a fair and inclusive tax system that supports all green technologies and doesn’t favour the wealthy and those in larger homes. The time to act is now.”