After energy regulator Ofgem increased its energy price cap by 54% this spring, you might be searching for ways to update your home that could mitigate your long-term energy costs.
Responding to this issue in his spring statement, chancellor Rishi Sunak announced new measures to help Brits tackle the rising cost of fuel and energy in the UK.
In addition to cutting fuel duty by 5p until next year, and introducing Council Tax rebates for up to 80% of households, Sunak announced that there will be a total reduction of VAT on energy-efficient home installations from April 2022 until 2027. Previously, the VAT on these installations stood at 5%.
Energy-efficient household installations included in the scheme are:
- Residential solar panels
- Heat pumps
Read how this VAT cut could save you money in the midst of the cost of living crisis, and what these energy-efficient installations could do for your overall cost of living in the long term.
You could save up to £1,000 on solar panel installations until 2027
According to the Treasury, a typical family having rooftop solar panels installed could save up to £1,000 following the chancellor’s VAT cut.
This major saving could prompt you to take the plunge and invest in solar panels or other energy-efficient installations in the coming years.
What’s more, the Treasury also confirms that, once the panels were installed, households could save up to £300 a year on energy bills going forward. So, not only might you save money on making your home more energy-efficient, you could also reduce your energy bills over time too.
Plus, if you are thinking about selling your home in the coming years, energy-efficient installations could make your home more attractive to buyers.
If you are considering installing solar panels in your current home, it is important to note key factors that will affect these installations. These include:
- The direction your home faces
- How many solar panels you wish to, or are able to install
- The demand for solar panels in your local area
- Whether you need to acquire planning permission for solar panels on your home.
To find out about how these factors might affect your home specifically, speak to a provider, or contact your local council.
Ofgem is set to increase its energy price cap again in October 2022
After 54% increase in energy price cap in April, Ofgem is predicted to raise the cap by a further 32% in October, meaning heat-efficient installations, like a heat pump or insulation, could be the priority for homeowners this summer.
If your home’s insulation needs repairing or even re-installing, for example, it could be constructive to complete this improvement during the warm summer months. This way, your insulation could help keep your home warm in time for any further price cap increases this autumn.
Work with a professional if you are concerned about costs as a homeowner
If the chancellor’s total VAT reduction caught your attention, you might be considering making energy-efficient improvements to your home, in order to sell it on, or simply to reduce your costs in future.
If you need to borrow to fund any improvements, we can help. Switching your mortgage to another lender could enable you to borrow the money you need to complete the work, plus you may benefit from a more competitive interest rate.
If you need help, get in touch. Email [email protected] or call 0131 339 2281 to speak to us.
This article is for information only. Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
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