How the 0% VAT Scheme Is Making Energy-Efficient Cooling and Heating More Accessible
A new incentive for smarter comfort
In recent years, the UK government has taken steps to encourage homeowners to make their properties more energy-efficient. Among these initiatives is the 0% VAT energy-saving scheme, which has made technologies like air conditioning and heat pump systems more accessible than ever. For households across Hampshire and the South, this change is transforming how we think about home comfort especially when it comes to year-round temperature control.
What is the 0% VAT energy-saving scheme?
The zero-rated VAT policy, introduced in April 2022 and running until 2027, allows homeowners to purchase and install certain energy-saving materials including air source heat pumps, controls for heating systems, and renewable energy systems, without paying VAT. The goal is simple: make it easier for consumers to choose efficient, sustainable technology that reduces energy waste and long-term costs.
For home and small business owners, this means potential savings of 20% immediately on installation. It’s a straightforward financial boost that can help offset the upfront cost of transitioning to more efficient systems.
Why air conditioning and heat pumps qualify
Modern air conditioning systems, especially air-to-air heat pumps, do more than cool a room. They can also provide efficient heating, often using up to three times less electricity than traditional electric heaters. This dual functionality is why they fall under the umbrella of energy-saving systems.
At Forest Cooling, many of the latest Daikin, Mitsubishi, and Fujitsu units are now covered under this 0% VAT scheme. Homeowners upgrading their systems for both summer cooling and winter heating are finding that the tax saving makes a noticeable difference to their return on investment.
Who qualifies for 0% VAT?
The scheme applies to domestic properties only, so homeowners, landlords, and tenants are eligible, but commercial and industrial installations are not. The property must also meet certain requirements, such as being a residential dwelling (not a new build or mixed-use commercial site).
Forest Cooling helps customers assess eligibility before installation, ensuring the project fully benefits from the tax relief where possible.
Why now is the right time to upgrade
The energy efficiency landscape is shifting fast. With rising energy prices and the government’s push toward net-zero, homeowners are looking for solutions that reduce both their bills and their environmental impact.
Upgrading an older air conditioning or heating system now means:
Immediate 0% VAT savings
Lower monthly energy costs thanks to modern inverter technology
Improved year-round comfort, especially in homes with mixed heating needs (like conservatories or home offices)
Increased property value, as energy efficiency ratings become more important to buyers
Why the South is leading the trend
Homeowners across Hampshire, Surrey, and Sussex are already embracing hybrid systems that heat and cool individual spaces efficiently. With the South’s milder climate and growing demand for zoned comfort rather than heating the whole house, air-to-air systems are proving both practical and economical.
As awareness of the 0% VAT scheme grows, installers like Forest Cooling are seeing a clear trend: customers who once viewed air conditioning as a summer luxury are now investing in it as an all-season essential.
The environmental advantage
Unlike gas boilers, which burn fossil fuels, air-to-air systems use electricity and when powered by renewable sources, they can achieve carbon-neutral operation. For environmentally conscious homeowners, that makes them an ideal bridge toward a lower-carbon future.
What homeowners should do next
If you’re considering an installation, it’s worth acting before 2027, when the scheme is set to end. To take full advantage:
Check your eligibility - confirm your property qualifies as a domestic dwelling.
Discuss options with a certified installer - ensure the system type is included in the VAT relief list.
Upgrade before the deadline - not only to save on tax but also to lock in lower operating costs before energy prices fluctuate further.
Final thoughts: Making efficiency attainable
The 0% VAT scheme isn’t just a tax break, it’s a push toward smarter, cleaner living. For many in southern England, this incentive is the perfect opportunity to rethink home comfort: not as a luxury, but as a responsible investment in efficiency, health, and sustainability.