The UK energy supplier will work with the bank to provide a streamlined heat pump funding service that will offer an additional £1,000 discount on top of government low carbon funding
Octopus Energy has partnered with the Lloyds Banking Group with the aim to offer lower cost heat pump installations to homeowners.
Under the partnership, Halifax mortgage customers can apply for a £1,000 ‘cashback’ discount upon installing an air or ground source heat pump.
Octopus Energy said that it was theoretically possible that some homes could install a heat pump for around £2,000 – if the offer is combined with a successful application to the government’s Boiler Upgrade Scheme.
Halifax said that the £1,000 was being provided as part of its ‘Green Living Reward’ initiative and would be open to any of its mortgage customers. The funds will be made available regardless of the heat pump system fitted or installer used.
However, the bank said it has partnered with Octopus Energy to streamline the funding application and installation process.
The energy supplier added that it was confident that it could offer customers an extremely low-cost heat pump installation in line with ambitions to eventually match the typical cost of a UK combi boiler. Earlier this year, the company acquired Northern Ireland-based heat pump maker RED as part of longer-term plans to disrupt the existing heating market.
Octopus Energy said it was currently installing Daikin heat pump systems to homes as a replacement to natural gas boilers. The UK government has committed to ensure at least 600,000 heat pumps are being installed annually across both existing and new build properties from 2028.
Current UK installation rates are thought to be around one tenth of this figure, with around 3,000 heat pumps having been installed via the Boiler upgrade Scheme between May and September.
An estimated 40 per cent of the UK housing stock, expected to account for 10 million homes across the country, are deemed as being particularly suitable for heat pump use, according to Octopus Energy and the Lloyds Banking Group. The project partners said that this figure could be extended to 14 million homes with the addition of minor efficiency improvements such as installing loft insulation.
Rebecca Dibb-Simkin, chief product officer with Octopus Energy, said that its partnership with Halifax sought to highlight the options available to deliver more affordable low carbon heating systems.
She said: “The pilot with Lloyds Banking Group comes at a crucial time for consumers facing a dual climate and cost of living crisis. It no longer needs to be a question of prioritising one over the other: heat pumps are greener than gas boilers, and thanks to Octopus, the government and Lloyds Banking Group they can be cheaper too.”
A spokesperson for the energy supplier said that it was looking at further collaborations with banks and financial services groups to look at new ways of financing the installation of sustainable technologies in UK homes. This work has also seen the company partner with NatWest to provide EV chargers.
Jas Singh, chief executive of consumer lending with the Lloyds Banking Group, said it was also looking at methods to help consumers to adopt cleaner domestic technologies for functions such as heat.
Mr Singh said: “Lots of homeowners who need to replace, or want to upgrade, a gas boiler may have considered the switch to a heat pump but see the cost as a barrier. This extension to our Green Living Reward scheme will make switching from a gas boiler to a new, more efficient, cheaper to run heat pump easier and more affordable than ever before.”
