Thousands of new homes will pay £0 energy bills with Octopus Energy – here’s how it works

Hundreds of homes will get free energy bills for five years under a program being rolled out by Octopus Energy and housebuilders.

With the ‘zero bills’ scheme, homes get green technology installed, such as a heat pump, solar panels, smart meter and home battery, and then sign up for the Octopus zero energy tariff.

Octopus guarantees that every property pays nothing for energy, even if it consumes more than it generates.

Each home only gets a limited amount of free electricity per year before it is charged, but it is very unlikely that the average household will exceed this.

Electricity is generated by solar panels fitted to each house and managed by Octopus’ Kraken system.

All excess energy that a house generates is transferred by Octopus.

The zero bill scheme started small, with three eligible homes made by Bellway on Stafford’s Victoria Gate estate.

But the scheme is now being expanded, with a further 250 Bellway homes in Bedfordshire. Octopus wants to have 100,000 zero-account homes by 2030.

The average house in Britain pays utility bills from £1,568 per year, which will rise to £1,717 on October 1 – the Ofgem price cap level.

Which households can register?

Currently, the zero bill scheme only works for new-build homes that are designed around the zero rate specifications.

But Octopus hopes to expand the scheme in the future to every home with solar panels, a heat pump and home batteries.

Octopus estimates that 500,000 UK properties built since 2013 could be eligible for an upgrade to the zero bills standard.

Regional housebuilders Verto and GS8 have said 100 percent of their future homes will be net-zero bills.

Other smaller developers, including Thakeham, Edenstone and Hill Group, have also signed up.

Zero Bill homes are also available for rent and shared ownership through housing associations Platform, Clarion and SNG, in addition to private rental providers Citra and Packaged Living.

Octopus founder Greg Jackson said: “This new goal for our zero bills project is something that has never been done before.

‘In just six years, 100,000 homeowners, families and couples could live without ever having to think about an energy bill.’

Is the energy really free?

Yes, but there are some caveats.

First, you get 10 megawatt hours (MWh) of free electricity per year, and Octopus charges you for anything you use above that level.

Energy regulator Ofgem says the average three-bedroom household uses around 14.2 MWh of energy per year, or almost 50 per cent more than Octopus would allow under its net-zero bill scheme.

However, Octopus estimates that a three-bedroom house under the zero bill program would use just 6 MWh of electricity, well below the limit.

This is because these homes are well insulated and equipped with a heat pump, which keeps electricity consumption low.

The Octopus tariff also does not allow for free charging of electric vehicles, and this must also be paid for.

There are no fixed costs with the Octopus Zero rates.