Dutch citizens who buy a smart home battery in combination with a dynamic energy contract can claim a VAT refund. This provides substantial savings, making it more attractive to invest in home batteries. This is according to research by Romano Hagen, tax lawyer, and energy supplier NextEnergy.
An important condition for claiming the VAT refund is the dynamic energy contract which allows for buying and selling energy, called ‘trading’. This trading ensures that the Dutch tax authorities have to classify a consumer as a VAT entrepreneur. ‘You are actually using the small business scheme,’ explains Gijs Wubbe, CEO of NextEnery.
Calculation example:
It becomes significantly more advantageous to purchase a smart home battery. Although somewhat of a technical explanation, the process is as follows: you have the option to reclaim the VAT, which is 21% of the purchase price, minus a one-off percentage of the proceeds. These proceeds are calculated using a guideline of €15 per kilowatt-hour of battery capacity. Since most home batteries have a capacity of around 10 kilowatt-hours, you need to deduct €150 from the VAT amount to get the amount you can claim back. The average cost of a home battery is around €8000. With 21% of this, you arrive at €1680, to which you then deduct the €150, making the remaining amount you can claim back €1530. Surely this is considerable, Wubbe thinks. With all this, the payback period, previously at 9 years, can be reduced to 7 years.
Administrative chore
Making use of the option to reclaim VAT does require some time and knowledge, but it is definitely worth the effort, Wubbe believes. There are also agencies that take this work off your hands for a fee.
The number of households using a dynamic energy contract rose to some 256,000 last year, according to figures from the ACM (Authority Consumer and Market).
With the increasing tendency of conventional energy companies to add extra costs to owning solar panels, the VAT refund is now being encouraged as an effective incentive. This gives households in the Netherlands themselves the opportunity to get a grip on costs while helping to reduce grid overload,” notes Wubbe.
Source: De Telegraaf