From January 2024, it will be possible to reclaim the VAT on the purchase and installation of a home battery. This is attractive for homeowners who generate their own energy with solar panels and want to manage that energy smartly. However, the scheme comes with specific conditions and limitations. This article discusses the most important aspects of the VAT refund for home batteries and what you need to know to qualify.
What is a home battery?
A home battery allows you to store the excess electricity generated by your solar panels for later use, for example in the evening or on days with little sunshine. In addition to self-consumption, this electricity can also be fed back into the grid, for which you receive compensation.
VAT refund: how does it work?
If you buy and install a home battery, you may be able to reclaim the 21% VAT in certain cases. This applies to both the purchase and installation of the battery. However, to qualify, you must meet strict conditions. This goes beyond simply connecting a home battery to solar panels.
Important conditions for the VAT refund
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Use for electricity trading
The main condition is that you use the home battery for the buying and selling of electricity with your energy company. This means that you receive compensation for the electricity fed back into the grid and are therefore considered a VAT-registered business. Without this electricity trading, you are not eligible for a VAT refund. -
Energy Management System (EMS)
The home battery must be equipped with an Energy Management System (EMS), which helps to manage your energy production and consumption. This system is necessary to trade electricity correctly. -
Dynamic energy contract
To take advantage of this scheme, you must have a dynamic energy contract. This type of contract ensures that the price you pay for electricity varies depending on the time of day you consume it, and that you can trade electricity. -
No private use.
If you use the home battery exclusively for private purposes, such as storing electricity for later use without feeding it back into the grid, you are not considered a VAT-registered business and cannot claim VAT back. You also cannot claim a VAT refund if your energy company does not offer compensation for fed-in electricity or if feeding back into the grid is technically not possible. -
Invoices and energy contract in the name of
Make sure that the invoice for the purchase and installation of the home battery, as well as the energy contract, are in your name. This is a requirement to be able to claim the VAT back. -
Not participating in the Small Business Exemption Scheme (KOR)
At the time of purchase and installation of the battery, you may not participate in the Small Business Exemption scheme (KOR). This scheme offers VAT exemption for small businesses, but participants in the KOR cannot claim VAT back. If you later decide to participate in the KOR, you may have to repay part of the VAT previously claimed.
VAT refund in electricity trading
If you meet all the conditions and use the battery for electricity trading, you can claim back the VAT on both the purchase and installation of the home battery. However, you must declare and pay the VAT on the compensation you receive from your energy company each quarter in your VAT return.
Pay VAT when using the battery for private use.
If you use the home battery for both business purposes (for electricity trading) and private use, you must pay VAT on the private use. You calculate this yourself based on data from the EMS and your energy bills. You indicate this amount in your final VAT return of the year.
Small Business Exemption (KOR)
Participants in the Small Business Exemption scheme (KOR) cannot reclaim VAT. If, during the 5-year review period, you remain below €500 per year in deductible VAT, you do not have to repay any VAT. If you exceed this threshold, you must repay a portion of the VAT.
Conclusion
The VAT rebate on home batteries offers a great opportunity for homeowners who want to actively trade electricity and reduce their energy costs. However, it is crucial to meet the conditions, such as having a dynamic energy contract and an EMS (Energy Management System). If you only use the battery for private purposes, you are not eligible for the rebate. Make sure you understand the rules well before making the investment, so you can optimally benefit from this scheme.
