What the VAT? New report compares rates on heat pumps

02 Oct 2023

The EU has set an ambitious target of at least 42.5% renewable energy by 2030, up from a share of 22% in 2022. 

To help get there, some countries have cut valued added tax (VAT) rates on renewable energy products. This reduces the investment cost, and makes such technologies more affordable and accessible to households and businesses. 

16 EU Member States, plus Switzerland and the UK, have set a lower VAT rate on heat pumps. Some have also set a lower rate on electricity – a small amount of which is used by most heat pumps 

In this report, we gather the information on VAT on heat pumps and on electricity from European countries, and compare who is doing what. 

The European Heat Pump Association is in favour of reducing VAT on heat pumps and electricity. Doing so makes the cleanest solutions for heating and cooling also the economically most attractive to end-users, including in industry. 

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