Increasing VAT on solar panels ‘will hinder net zero economy efforts’

Proposals to increase VAT on solar panels will hold back the UK from achieving a net zero economy, according to Committee on Climate Change (CCC) chief Chris Stark.

Speaking to the Business, Energy and Industrial Strategy (BEIS) select committee, Mr Stark touched on HMRC’s proposals to remove the discounted rate of VAT on energy saving materials such as solar panels and battery storage units, saying this move would hinder the UK in hitting the zero net goal.

Should the proposals go ahead, the VAT on such items would increase from 5% to the full 20% rate.

“We will need to throw everything at this challenge, including onshore wind and solar for that matter. Anything that makes it harder is clearly not in line with the net zero challenge over all,” he said.

During the session, Mr Stark also heavily advocated for an “unprecedented” increase in low carbon power generation in a bid to cut emissions over the next decade - a critical period for climate change.