First published September 2023. Rewritten and last reviewed 15 September 2026.
The first version of this article argued that home automation should be treated as an energy measure rather than a comfort, and that lighting and shading control belonged on the government’s list of energy-saving materials that carry no VAT. Three years on we still think that, and the list still does not include them. This is the argument again, with the rhetoric taken out and the engineering left in: what a control system actually does to a house’s energy use, what it does not, and where the tax rules stand.
Where the energy goes
In a Scottish house the largest energy cost is heat. Lighting, once the house is on LED, is a small part of the bill. So the honest starting point for any claim about “smart home energy saving” is that a control system saves most where it touches heating and the things that affect heating, and least where it merely switches lights. We design systems with that order of priority, and we tell clients so before they spend money on the wrong end of it.
What a control system can do
- Heating by room and by occupancy. Zoned heating run from the same system as everything else, so that rooms nobody is in are not heated to the same temperature as rooms they are. A house that knows it is empty can set back the whole building and bring it up again before anyone returns. This is the largest saving available and the one most often left out of a “smart home”.
- Shading as part of the heating and cooling. Motorised blinds and curtains that close at dusk keep heat in through large glazed areas, and that close against low sun in summer keep a south-facing room from overheating without air conditioning. On a scene, timed to the sun rather than the clock, they do this without anyone remembering.
- Lighting that is off when it should be. Occupancy and daylight control, and an “all off” at the door and at bedtime, remove the lights left on in a utility room for a week. Dimmed scenes use less than full brightness. The saving is real but modest, and we say so.
- Standby and the equipment rack. A house full of audio, video and network equipment draws power all night. A control system can shut down what is not needed and leave the network and security running, which is a saving that only shows up when someone measures it.
- Measurement. Energy monitoring on the incoming supply and on individual circuits turns a guess into a figure. Most of the savings clients make after handover come from seeing, for the first time, what the house actually uses.
What it cannot do
A control system cannot insulate a house, replace a boiler or change the glazing. It runs the fabric it is given. If the roof is uninsulated the money should go into the roof first, and we will say that at the first meeting even though it is not what we sell. We also do not publish percentage savings, because the figure depends on the house, the occupants and the fabric, and a number that cannot be substantiated is worth nothing.
The VAT position
The UK applies a zero rate of VAT to the installation of a defined list of energy-saving materials in residential property. The list includes insulation, draught stripping, controls for central heating and hot water systems, solar panels, heat pumps, and, since February 2024, electrical storage batteries and smart diverters. The zero rate is time-limited and is currently due to revert to the reduced rate of 5% from April 2027.
Heating controls are on that list. Lighting control, shading control and the whole-house systems that make them work together are not, even though the shading in particular does the same job for the same reason. Our position in 2023 was that they should be, and it is still our position. Until it changes, a client should expect the heating-control part of a project to be treated differently for VAT from the rest, and we set that out on the quotation rather than leaving it to be discovered on the invoice. The rules are HMRC’s, not ours, and they change; check the current guidance or ask us for the position at the time of your project.
Efficiency first, comfort as the result
The original article’s title was the point we most wanted to keep. A house that heats the rooms in use, shades itself against the sun, and switches off what is not needed is a more comfortable house, not a less comfortable one. The comfort is the outcome of getting the efficiency right. Designed at RIBA Stage 2 with the architect, the heating zones, the blind pockets, the sensor positions and the metering go on the drawings and cost very little. Added afterwards they cost a great deal more and do less.
Questions we are asked
Will a smart home cut my energy bills?
It can, if it controls the heating and the shading and not just the lights, and if the house is already reasonably insulated. We will tell you at survey which of those applies to your house before we quote.
Is the 0% VAT rate available on a Lutron or Control4 system?
Not on the lighting or shading control. The relief covers a specific list, of which heating and hot water controls are the relevant item. We separate the eligible and ineligible parts on the quotation, and we recommend confirming the current rules with HMRC or your accountant.
Can you add energy monitoring to a house that already has a control system?
Usually, yes. Circuit-level monitoring can be fitted at the consumer unit and brought into most control systems, and it is often the most useful single addition to an existing house.
Home automation designed for efficiency, across Scotland
Heating, lighting and shading control are part of our smart home design and installation work, with Lutron lighting control and Lutron window treatments described on their own pages. We work across Scotland, normally for the client and with the architect. Start a conversation and we will tell you where the savings in your house actually are.