Legal & General Capital (LGC) has invested a further £8 million in heat pump manufacturer the Kensa Group, to allow it to continue to scale up its ground source heat pump development.
It follows LGC acquiring a 36% stake in the Kensa Group in 2020, bringing its total investment in the company to £15.7 million over two years.
“This second investment from Legal & General Capital cements the successful partnership we have built together these past two years and marks a major milestone in the development of Kensa’s ground source heat pump solutions,” said Kensa Group CEO, Dr Matthew Trewhella.
“The whole heat pump supply chain, including Kensa, will have to expand dramatically to meet the UK’s 2028 heat pump installation target. This investment will allow us to significantly step up our efforts in areas such as R&D and operations, as we continue to prepare for further rapid growth.”
Over the past two years, Kensa has increased its number of employees from 70 to 180, while its revenue doubled, from £15.5 million to £31.5 million.
Its manufacturing facility has also increased production substantially, growing by 150% during the pandemic. According to the company, this has broken the record for the number of ground source heat pumps made in the UK, and it is working to increase the capacity twofold by 2023.
For LGC, the investment markets a continued focus on green businesses that can provide scalable solutions to the climate crisis.
“We invest our capital in clean energy assets, businesses and technologies which will help accelerate the UK’s progress to a low-cost, low-carbon economy,” John Bromley, head of clean energy at LGC, said.
“Our partnership with Kensa is delivering at pace and this further investment in Kensa will enable the business to continue to scale up, bringing vital capacity to the sector.”
Heat pumps are set to play a key role in the transition to net zero in the UK, with the government announcing a target of 600,000 heat pump installations per year by 2028 within its ten point plan in November 2020. Currently between 30,000 to 40,000 pumps are installed annually.
It has further signified support for the technology in the Heat and Buildings Strategy – released in October 2021 – unveiling grants of £5,000 for the installation of heat pumps as part of the a £450 million Boiler Upgrade Scheme, which went live in April 2022.
With surging gas prices in the UK, heat pumps can also help to reduce household fuel bills, saving the average household up to 25% or £261pa.