Octopus Energy hands millions lifeline with £10m heat pump plan

Boris Johnson discusses introduction of heat pumps to UK homes

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Heat pumps are low-carbon devices that can be used to warm homes, which the Government is backing as part of a long-term plan to eventually replace gas boilers. And amid an energy crisis sparked by skyrocketing gas prices, thousands have indeed flocked to buy heat pumps after the Government’s Boiler Upgrade Scheme slashed installation costs by £5,000

While this discount slashed the installation costs by half (it costs £10,000 on average without the discount), Octopus Energy boss Greg Jackson says heat pumps will also become cheaper to run.

He told Express.co.uk: “Heat pumps are the most efficient way to heat your home…they are three or four times more energy efficient (than gas boilers).

“Like cars, to begin with we can get a lot of efficiency and a lot of improvement in fuel costs by having more efficient petrol engines. Eventually, electric cars will start to become the general replacement but today, they are still a small part of the market, They are growing and the price is going down.

“In the long run we know EVs will be the replacement and they will become cheaper and better, but it takes time and it’s the same with heat pumps. Heat pumps will become cheaper to run and better than gas boilers, but that will take time.

“In the next five or 10 years, heat pumps will become the right answer for the vast majority of people. The cost will come down, and they will become better and more suitable for more homes.”

And Octopus is making sure it will be right there from the start as interest in the boiler alternatives picks up further. And with a number of investments and acquisitions, Mr Jackson claims that his firm will be responsible for driving down the price too.

Mr Jackson told Express.co.uk: “We have invested in a £10million research and development centre in Slough, we have trained hundreds of engineers and we have just acquired a heat pump manufacturer in Northern Ireland. We are going to be making thousands of heat pumps a month pretty soon, and that is going to go up to 10,000.

“Octopus is going to be driving this, and already to the right homes, we are installing heat pumps for a cost of about £2,500 pounds after you have received your Government grant.

“Our plan is to keep driving down the cost so as the market grows, they will ultimately be a price that is not dissimilar to a gas boiler. That is sort of where we are heading.”

But currently, it is widely acknowledged that heat pumps are only suitable in certain types of homes, typically new build properties.

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Mike Foster CEO of Energy and Utilities Alliance: “Heat pump technology is great for the right property.

“By the right property, I mean highly insulated – probably new build.

“What they are not very good at, are being put into cold, leaky, energy-efficient homes because that way the product does not work as efficiently to keep bills down.”

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