The competitive price of Octopus’ new system would bring installation costs closer to that of a traditional gas boiler. Credit: Ink Drop via Shutterstock.

Octopus Energy CEO Greg Jackson launched the company’s new own-brand smart heating system, which includes a more affordable heat pump, on Thursday at a technology summit in London.

The system, which will be available from December, consists of the ‘Cosy 6’ heat pump, ‘Cosy Hub’, a home controls system, ‘Cosy Pods’ room sensors and a smart tariff.

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Through the UK Government’s Boiler Upgrade Scheme (BUS), the entire system will be free for already well-insulated homes that do not need any additional work done to them regarding improvements to energy efficiency. Houses that need adjustments to be made, such as new radiators, piping or a hot water tank, will get the system from around £3,000 after the BUS, the company said in a statement.

Currently, it costs between £7,000 and £15,000 to buy and install an air source heat pump in the UK, although this can be reduced by up to £5,000 if a home qualifies for the BUS. The competitive price of Octopus’ new system would bring installation costs closer to that of a traditional gas boiler.

The Cosy 6 heat pump will initially enter the market with a capacity of 6kW, enough to heat a typical three-bedroom home. Additional, larger models will be developed over the next six months. The heat pump will be Octopus’ first to be built entirely in-house and was designed by Dr Jason Cassells, CEO of recently acquired Renewable Energy Devices, now known as Octopus Heating.

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Jackson said at the summit: “This is a huge day for clean heating. The combination of a high-temperature heat pump, [which is] as hot as a gas boiler, Octopus smart tariffs and room sensors across your home doesn’t just open up cheaper clean heating but more comfort too.”

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The UK has set a target to install 600,000 heat pumps per year by 2028 as part of its emissions reduction plans. However, last year just 55,000 were sold throughout the country.

In April, the Energy and Utilities Alliance (EUA) trade body published a report condemning the BUS after it was revealed that heat pump installation has seen very low uptake, branding the scheme an “embarrassment”. At the time, EUA chief executive Mike Foster said that heat pump uptake had been so low because the majority of homeowners “simply cannot afford a heat pump, subsidised or not”. Now, Octopus’ cheaper alternative could help to further incentivise heat pump installation.