Cheaper than a gas boiler – OVO launches best-in-market heat pump offer

• OVO is making heat pumps cheaper to buy and run than a gas boiler for UK households 
• OVO is halving the cost of electricity for heat pumps with a best-in-market rate of 15p per kWh. This will make heat pumps *£500 cheaper than, or roughly half the price of, running a gas boiler per year
• Working in partnership with Heat Geek – the UK’s leading renewable installer network –  upfront costs start from £500 following the government’s – recently increased – Boiler Upgrade Scheme
• As OVO slashes running costs, it calls on the Government to move expensive policy costs from electricity to general taxation to unleash the potential of green technology 

• Research shows that reducing running costs could make almost half of the UK more likely to adopt a heat pump, essential as Prime Minister Rishi Sunak plans to delay the ban on gas boilers, jeopardising the UK’s net zero targets

London, 3rd October 2023: Today, OVO launches the cheapest heat pump rate on the market  – Heat Pump Plus – slashing running costs by 50% to just 15p per kWh. 

With Heat Pump Plus, it’s £500 per year cheaper to heat the average home, making it cheaper to run than a gas boiler. The type of use add-on means customers have two rates – one for their heat pump and one for the rest of their home’s energy usage. 

Increasingly powered by electricity from renewable sources and up to five times more energy efficient than gas boilers, air source heat pumps are key to cutting UK households’ carbon emissions. Home heating systems are currently responsible for 11% of greenhouse gases nationally. OVO is tackling concerns that heat pumps are more expensive to run than traditional gas boilers (a worry amongst 55% of people in a recent study) to encourage uptake and reach net zero faster.

The government aims to install 600,000 heat pumps per year within five years to hit its climate change targets, but rates are currently around 11% of this. Research conducted by OVO shows that nearly half of the population (45%) would install a heat pump if running costs were 40% cheaper than today’s average rate. That equates to almost 12.7 million homes – far surpassing the government’s target, and helping the UK (and OVO) reach net zero, quicker.

The running costs of a heat pump are a primary concern for four in five households when choosing a heating system, with over a third (35%) saying running costs were more important than the initial costs.

OVO has already installed thousands of heat pumps in local authorities and housing associations, to give people on lower incomes greener homes, through OVO Energy Solutions. Building on its experience, OVO is partnering with Heat Geek to deliver the highest quality installation experience and will guarantee maximum efficiencies are achieved. 

The government’s uplift to the Boiler Upgrade Scheme from £5,000 to £7,500 is welcome investment in putting heat pumps on cost parity with gas boilers. The upfront cost of the heat pump offering from OVO start from £500 (including £7,500 Boiler Upgrade Scheme grant). 

OVO is also calling on the Government to encourage the switch to electric heat by improving incentives and cutting running costs. Currently, electricity is three times more expensive than gas which is stalling the switch to clean electricity. 

Mat Moakes, Chief Commercial Officer, OVO, said:

“The UK is trailing far behind Europe on its heat pump installations. By halving the running costs of a heat pump, we’re helping to level the playing field between gas boilers and heat pumps, making them a more viable option for those wanting to make the green switch to electric. But this has to be the case across the board. It’s time to shift policy costs from electricity to general taxation so everyone can benefit from greener, cheaper electric heating systems, sooner.”

Aadil Qureshi, CEO, Heat Geek, said:

“One of the fundamental challenges to mass uptake of heat pumps is that we don’t have enough skilled heat pump installers in the UK. Our solution is to train thousands of local installers, and empower them with the knowledge and digital tools to unlock the highest efficiency installations in the industry. Combining OVO’s Heat Pump Plus with a Heat Geek install, homeowners can turn these high efficiencies into significant savings for the lifetime of their system, all delivered by a certified Heat Geek from their local area.”

ENDS

Notes to editors

*Savings of £500 are based on the following comparison: a gas boiler running at 83% efficiency (as per the national average) with an annual consumption of 10,500 kWh at 8.5p/kWh versus an air source heat pump with a Seasonal Coefficient of Performance (or efficiency rating) of 4 and an annual consumption of 2,625 kWh at 15p/kWh with the Heat Pump Plus add-on.

Customer eligibility

• Find out more about installing a heat pump on OVO’s website

About OVO

OVO was founded in 2009 and redesigned the energy experience to be fair, effortless, green and simple for all customers. OVO was awarded Company of the Decade at the BusinessGreen Leaders’ Awards and has won multiple awards, including Innovation Project of the Year, for investing in the market leading technology, customer service operations and digital products to help customers cut their carbon emissions. OVO won the award for Best Place to Work for Women and came Top 10 for Very Big Organisation in The Sunday Times’ Best Places to Work 2023 for offering forward thinking policies and better flexibility for everyone to balance work with life. OVO is on a mission through its sustainability strategy Plan Zero to tackle the most important issue of our time; the climate crisis, by bringing our customers with us on the journey towards zero carbon living. OVO has committed to being a net zero carbon business and achieve bold science-based carbon reduction targets, while helping customers reduce their household emissions at the same time. 

About polling

Strand Partners’ specialist research team conducted an online survey of 1,002 nationally representative members of the public, online between 10th September and 11th September, 2023. Respondents were selected for representativeness using quotas by age and gender (interlocked) and NUTS 1 regions UK. All data was then weighted against the latest ONS census.

Strand Partners’ online polling studies are accredited by the British Polling Council and conducted under their rules of disclosure. All data gathered is of a publishable quality and is produced within Market Research Society guidelines.

For full data tables and more detail of the methodology, please e-mail: [email protected].