Octopus and L&G invest in firm that ‘will cut the cost of ground source heat pumps’
Will this reduce the costs of green? Octopus and L&G make UK’s largest-ever investment in heat pump business to help it install 50,000 a year
- Companies have invested £70 million in heat pump manufacturer and installer Kensa
- They claim it will lower the cost of these expensive devices for customers
Octopus Energy Generation and Legal & General Investment are investing £70m in a ground source heat pump company, in a move they believe will reduce the cost of switching to green energy for customers.
The money will be invested in manufacturer and installer The Kensa Group, and is the largest investment ever made in ground source heat pumps in the UK.
Octopus and L&G said it would enable Kensa to rapidly expand and install 50,000 ground source heat pumps per year by 2030.
The appliances are a more energy-efficient replacement for gas boilers, but currently cost tens of thousands of dollars for homeowners to purchase and install.
Geothermal heat pumps extract heat from the ground outside your home to heat your radiators or underfloor heating
Ground source heat pumps are also considerably more expensive than the main alternative, air source heat pumps. A ground source system can cost between £15,000 and £30,000.
Property owners must also have land outside to install the system, so they are not suitable for every type of home.
The UK is aiming for 600,000 heat pump installations per year by 2028 as part of wider efforts to decarbonise the heating industry.
Kensa expects the investment to create more than 7,000 green jobs in the UK by 2030.
British Gas has also said it will hire 3,500 engineers over the next decade to train them in green skills, such as how to install heat pumps.
British Gas and Octopus already offer some of the most competitive air source heat pump prices on the market.
But Kensa says this investment from Octopus and Legal & General will make heat pumps even more accessible to more properties – including retrofits for social housing, townhouses and non-domestic buildings.
As part of the deal, financing will be provided to offer home builders, housing associations and non-domestic customers Kensa’s ‘Networked Heat Pumps’ solution at a lower cost.
Commenting on the deal, Zoisa North-Bond, chief executive of Octopus Energy Generation – the investment arm of the utility – said: “The heat pump revolution has kicked off: it’s a proven replacement for gas boilers and could cut consumers’ energy bills for good. to lower.’
The investment agreement is expected to be completed in the third quarter of 2023.