Octopus Energy to offer heat pumps as cheap as gas boilers - costing you as little as £2,500 to decarbonise your home

Octopus Energy is launching a heat pump that will cost households the same or cheaper than a gas boiler. We look at the costs involved

An engineer installing a heat pump
(Image credit: Getty Image)

Octopus Energy is launching a heat pump that will cost households the same or less than a gas boiler, with product and installation totalling an estimated £2,500.

Heat pumps are a type of renewable energy technology that allows you to heat your home in an environmentally-friendly way. 

They are much more efficient than gas boilers, producing three or four times the energy they use, and are more reliable, requiring little maintenance and lasting 20 years or more.

Here, we reveal what you need to know about Octopus Energy's new lower price heat pumps.

Octopus Energy Heat Pumps from £2,500

Right now, installing a heat pump can be expensive: you’ll pay between £7,000 and £13,000 when you factor in necessary additional upgrades such as better insulation or different radiators.

The government’s Boiler Upgrade Scheme puts £5,000 grants towards heat pump installation (until April 2025). It means you still pay up to £8,000.

Octopus Energy says the overall cost of its new heat pumps will start at £2,500 when the government’s grant is included.

But it’s likely you’ll still pay more than this: additional upgrades such as insulation, double glazing, underfloor heating, pipework or different radiators are taken as a given.

But even at an expected overall cost of between £3,000 and £3,500 this is around the cost of installing a gas boiler - or cheaper.

It’s some good news for households amid winter temperatures and the cost of living crisis as they try to cut energy costs and stay warm without blowing their budgets.

Heat pumps are seen as the key to decarbonising UK properties as the country aims for net zero by 2050.

Installation has so far been slow due to the high cost and difficulty to find an installer. The government heat pump installation scheme has only given out 7,600 vouchers out of a total 30,000 available for this financial year.

Octopus Energy is not the only firm to install heat pumps: British Gas and Eon supply and install heat pumps.

Read how much the Brookes family is spending on their eco-heat pump: “We are spending £20,000 overall because we need a different type of radiator and pipework to make it work. We also have to insulate the loft and cellar, and stud out one particular wall.”

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Katie Binns

Katie is staff writer at The Money Edit. She was the former staff writer at The Times and The Sunday Times. Her experience includes writing about personal finance, culture, travel and interviews celebrities.  Her investigative work on financial abuse resulted in a number of mortgage prisoners being set free - and a nomination for the Best Personal Finance Story of the Year in the Headlinemoney awards 2021.