Octopus Energy braced to install thousands of heat pumps in 2022

Octopus Energy expects to install thousands of heat pumps in UK homes this year on the back of millions of pounds of investment in its training and technical capabilities.

The energy supplier, which aims to specialise in more sustainable sources of energy, said the upcoming launch of the government’s Boiler Upgrade Scheme (BUS) would be a vital tool to help build up and incentivise consumer demand for lower carbon heat.

It joins other UK-based energy providers such as British Gas in committing to scale up it capability to provide and service heat pumps from this year as part of a wider push to electrify UK buildings and infrastructure to curb carbon emissions.

Octopus Energy told H&V News that it had already started to install a “small number” of heat pumps was now looking to ensure improved economies of scale for introducing these technologies into homes. This ambition would be backed by a commitment to reduce the overall time required for installation.

The BUS incentive, which aims to provide £5,000 to domestic and smaller nondomestic properties in England and Wales to install air source heat pumps as a direct replacement for fossil fuel boilers, is launching this year and currently scheduled to run until 2025.  Grants of £5,000 and £6,000 will also be offered to households to cover the cost and installation of a biomass boiler or ground source heat pump respectively.

Cost challenge

Funds expected to be provided through the scheme are expected by Octopus Energy to be an important means of covering the upfront costs of lower carbon technologies – at least initially.

The company said, “We’re hoping to be able to offer heat pumps for around the same price of an average gas boiler in many homes in combination with the government’s launch of the grant.”

“As we build, install and sell more heat pumps alongside the government grant, we hope to be able to reduce the price of heat pumps to a point where they are comparable to that of an average gas boiler without the grant. Again, this will be done by achieving economies of scale and the same relentless focus on efficiency that Octopus Energy Group has become known for.”

An estimated 60,000 heat pumps were installed nationally over the course of 2021, a figure up by 50 per cent over the previous year, Octopus Energy added.   However, this figure is still far behind the more than one million natural gas boilers being sold annually in the UK.

The energy supplier said it had started training hundreds of installers to deliver heat pump systems with several thousand expected to be put into homes by the company alone over the current year alone.  More than £10m has also been invested by Octopus Energy into a Clean Heat R&D research Centre based in Slough that is looking at how to support a wide number of different building types such as flats with heat pumps.

‘Easiest to install’

A major focus of the company’s aim to build a more affordable and efficient heat pump industry is based on providing the systems to the easiest to install homes. It would then look at more difficult and less efficient properties as the market develops.

The company defined easier to install properties as two to four bed detached and semi-detached homes, as well as large terraced homes built between the 1930s and 1990s.

Octopus Energy said, “This allows us to target up to 40 per cent of the UK’s housing stock immediately and makes for easier and faster installations by our engineering teams.”

“We will focus on providing properties with average sized residential air source heat pumps and minimal maintenance and insulation work where needed. Larger, Victorian properties with poor insulation – while currently one of the largest customer cohorts for heat pumps – are not always the best choice for a heat pump due to their draughty nature.”

From a technology perspective, Octopus Energy told H&V News that it would be working with a number of system manufacturers to provide heat pumps capable of working in the majority of UK homes at the lowest possible prices.

The company added that it was also focused on offering proprietary solutions as a result of its R&D investment with further major announcements expected at a later date.

It added, “All our heat pumps will come with a warranty as standard and we will be able to arrange monthly servicing for the customer if needed.”

“Although of course the benefit of a heat pump is they’re much lower maintenance and have a lifetime of 20 years compared to the 10-15 years expected from a gas boiler, so frequent servicing and maintenance shouldn’t be the average heat pump user experience.”

You can hear more from Octopus Energy and other heat pump specialists on what the widescale electrification of the sector may mean for our buildings and power networks in a H&V News Heating Cast from 2020 that can be listened to here or in the player below.