Good Energy Launches Heat Pump Tariff

A green energy supplier is launching a flexible tariff it says will make it “easy and affordable” for households to ditch gas boilers for low-carbon heat pumps.

Good Energy’s home heat pump energy tariff claims to be the first of its kind in the UK and will launch in the autumn in conjunction with the government’s recently-announced £2 billion Green Home Grant scheme. 

The Green Home Grant scheme will give homeowners vouchers of up to £5,000 to cover at least two-thirds of the cost of home efficiency upgrades, including the installation of heat pumps. The lowest-income households can also qualify for grants of up to £10,000 to fund efficiency upgrades.

Good Energy says its tariff, which will be powered by renewable electricity, will offer customers cheaper rates at specific times of the day, such as when renewable output is high or demand low, making it cheaper to run a heat pump.

Consumers commonly cite cost as the biggest obstacle to adopting low-carbon heating technologies. Good Energy said the combination of the Green Home Grant scheme and its “competitive” tariff will make heat pumps cost-effective to both install and operate.

Juliet Davenport, founder and chief executive of the green supplier, said: “This tariff will be designed to make it as easy and affordable as possible for people to get rid of dirty gas heating their home and start using clean electricity from renewables.”

Heat is currently responsible for around a third of the UK’s carbon emissions and removing fossil-fuel heating systems from the UK’s homes is a “huge” undertaking, Davenport said. Currently, just one million of the UK’s 27 million homes has a low-carbon heating system installed, although this number is expected to double by 2025.

But many think the government isn’t acting fast enough to swap out gas boilers. A recent report from the think tank IPPR calculated that for the UK to meet its net-zero target by 2050, at least 12 million homes in England will need to be retrofitted with heat pumps and efficiency upgrades like insulation. Currently, less than 2% of the heat pumps needed are being installed.

Last week the Confederation of British Industry (CBI), the UK’s largest business group, warned that the government must stop the installation of new gas boilers by 2025 or its net-zero target is “doomed.”

But progress on the ground may be picking up, with two major energy suppliers recently announcing trials to explore low-carbon heating. OVO Energy has received a £4.2 million grant from the government to run one of the UK’s largest-ever zero-carbon heating trials, installing heating systems worth up to £15,000 in 250 homes. Meanwhile. E.ON has received £3.9 million grant through the Department of Business, Energy and Industrial Strategy (BEIS)’s Electrification of Heat project and will install heat pumps in 250 suitable homes in Newcastle-upon-Tyne.