The purchase and installation of an Octopus Energy heat pump could cost around £2,500 after government grants – a similar price to gas boilers.
In an interview with the Telegraph, Greg Jackson, CEO of Octopus Energy, confirmed the company’s new self-designed heat pump could be installed at a similar cost to gas boilers.
Upon a request for comment, Octopus confirmed to Current± that the energy supplier had even installed heat pumps for as little as £2,300, which includes the deduction from the Boiler Upgrade Scheme (BUS).
The scheme offers £5,000 off the cost and installation of an air source heat pump, £5,000 off the cost and installation of a biomass boiler and £6,000 off the cost and installation of a ground source heat pump, all of which can be completed without VAT.
The breakthrough by Octopus could be a major development for the low-carbon heat technology with price parity with gas boilers having now been achieved, in specific scenarios.
Octopus stated that although the new heat pump could be installed for £2,500, most customers are expected to be quoted around £3,000 to £3,500 depending on the size of the home. However, the energy supplier confirmed it is aiming to “reduce this even further and reduce hardware costs”.
The new heat pump is “designed to be lower cost hardware, lower cost to install and to be able to cover a bigger percentage of UK homes. It’s a serious breakthrough,” Jackson told the Telegraph.
“At the moment, if we have to buy a heat pump, typically we are looking at £3,000 for the hardware. This will now enable us to get hold of them for £1,500.
“It’s a bunch of major leaps forward and we can keep on pushing prices downward from there.”
Octopus Energy has been expanding its heat pump expertise and in April 2022 acquired heat pump manufacturer Renewable Energy Devices (RED). The company confirmed the acquisition was a move to reduce the cost associated with heat pumps.
The multi-million-pound partnership will see RED’s existing factory significantly expanded, with an additional 100 engineering jobs created by 2024. The investment in the factory aimed to help produce over 1,000 heat pumps a month by the end of 2022 with further growth anticipated.