17 March 2005 – The UK’s Chancellor, Gordon Brown, has reduced tax on domestic micro combined heat and power appliances from 17.5 per cent to 5 per cent. The announcement means that microCHP units now benefit from the same tax rating as some other energy efficient products.
Roger Webb, heating services director of the Society of British Gas Industries, said: “This cut in VAT will help the industry further develop the market for more fuel efficient heating systems, while consumers will benefit in the long term from greater availability of appliances that will cut their heating bills.”
According to Micropower Council, it is estimated that a microCHP would cut a typical household’s energy bills by around £150 ($289) a year and carbon dioxide emissions by approximately 1.5 tonnes a year. The industry body also stated that if a quarter of UK homes were to install a 1 kW microCHP unit, the generation provided would be equivalent to almost half of the UK’s nuclear power plant fleet.
Baroness Maddock, president of Micropower Council, said: “This reduction in VAT sends a clear signal to Micropower technology developers, customers and investors that the government recognizes the potential of consumer based power generation in the energy policy mix to meet the country’s Climate Change objectives.”