ClimateTech disruptor tepeo leads the charge for fair treatment in the renewable heating sector by offering up to £2,000 back on its ZEB, amid the Government’s decision to exclude heat batteries from VAT relief.
Wokingham, UK, Tuesday 26th November: 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.
Khan expressed disappointment, noting the missed opportunity to further incentivise low-carbon heating. 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.
Tom Pakenham, Commercial Director, New Business and Net Zero at Centrica, said: “tepeo is doing something truly incredible by absorbing the VAT cost themselves, making low-carbon heating technology more accessible to homeowners. This bold move will highlight the crucial role that VAT relief can play in accelerating the adoption of renewable heating solutions. By leading the way, tepeo is setting an example of how businesses can drive change and help ensure that more households can make the switch to greener, more affordable energy solutions.”
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.”