‘Pay-monthly’ project pilots sustainable home – without the upfront cost

Homeowners looking to make their homes more sustainable and efficient could install a heat pump, solar panels and a battery with no upfront cost as part of a pioneering scheme being led by E.ON, which offers both technology and service in a pay-monthly contract similar to mobile phone deals.

Taking inspiration from other consumer markets such as mobile phones or broadband, customers can spread the cost of the sustainable solutions, installation and running costs over many years.

Heat pumps capture heat from either the air or ground and are a more sustainable and cost-efficient replacement for traditional home heating sources based on fossil fuels. Heat pumps, solar and battery costs can vary, typically between £20k and £28k.

Now, in a pilot scheme in the North West of England, homeowners could get an air source heat pump, solar panels and a battery fitted for as little as £150 a month*, over a 20-year term, covering the technology and installation as well ongoing servicing, maintenance and breakdown cover, support and optimisation. At today’s energy prices, switching to these sustainable solutions could save an average 4 bedroom property almost £800** a year. 

Chris Norbury, E.ON UK Chief Executive, said: “Bundling the technology along with service is commonplace for the many millions of people around the UK who have a mobile phone contract. We’re bringing the same flexibility to energy customers so they can benefit from the transition to cleaner and greener homes without the need to find the upfront finance.

“This is a game-changer for home heating and makes sustainable energy more affordable in the first place, while lowering bills in the longer term and helping transform the energy system.” 

The project has been awarded more than £1m by the Department of Energy and Net Zero as part of the Green Homes Finance Accelerator which will bring to market a new Energy as a Service agreement to make transitioning to a heat pump and solar possible for UK households.

Benefits include:

• Lower energy bills as heat pumps typically produce 3-4 times the amount of heat for every unit of electricity they take to run;
• Lower carbon footprint from switching from a gas boiler to a heat pump powered by on-site solar panels with battery storage;
• One fixed monthly energy service fee – just like subscribing to a streaming service, broadband provider or mobile phone contract;
• Peace of mind from a guarantee on the system’s energy performance including servicing, maintenance, and breakdown cover and optimisation via a Home Energy Management System (HEMS) ensuring customers’ comfort levels.

The pilot will be delivered by E.ON, working with Energy Systems Catapult and Heatio and is aimed at promoting greater uptake of low carbon heating and energy efficiency measures by removing the upfront costs to consumers.

Thomas Farquhar, Co-Founder of Heatio, said: “We believe this much-needed solution will motivate homeowners, who account for 40% of emissions, to make energy-efficient upgrades to their homes. We’ve seen that many homeowners are willing to invest in low-carbon technologies like solar panels and heat pumps when they see a clear path toward lower energy bills and a reduced carbon footprint. Now they will have an affordable and accessible way to do so.”

Guy Newey, Chief Executive Officer of Energy Systems Catapult, said: “The two biggest challenges to the retrofitting of millions of homes is giving consumers confidence that new low carbon heating and energy efficiency technologies will provide great comfort; and helping them with the upfront cost. Energy Systems Catapult is partnering with E.ON and Heatio to help test an Energy as a Service proposition, aimed at driving the uptake of low carbon technologies like heat pumps and solar panels.

“In the first phase, we helped test the proposition with consumers, alongside carrying out some Home Energy Dynamics modelling to determine which housing types would most benefit from this service, and business model innovation work to support the development of a successful financial model. We are excited to be part of the phase two pilot, where the Catapult will further draw on our consumer insight and business modelling capabilities to test the proposition with real people in real homes.” 

The scheme will launch in April and give 350 households the opportunity to be the first to benefit.  Customers who sign up will pay for their solar, battery and heat pump system over a 20-year period through a monthly fee.  Monthly payments will typically be in the order of around £150 a month, depending on the type of property*. 

Chris Norbury added: “We’ve long argued the energy market in its current form is not designed to inspire homeowners to take their own steps towards improving their homes and helping to wean the country off our dependence on fossil fuels. We hope removing the finance barrier encourages more people to consider greener options when updating their homes by providing an affordable funding system that makes the sustainable choice the easier choice.”

Alongside the service agreement, customers will benefit from an E.ON Next tariff designed to get the most from the technology and to minimise running costs. Customers will also have a guarantee on the system’s energy performance as well as a management system that delivers the comfort they want while making the very best use of the technologies installed.

Ends

Notes to editors

^E.ON

^{E.ON is leading the energy transition; providing smart, sustainable and personalised solutions for customers at home, in business and across entire towns and cities. We offer a wide range of efficient and smart technologies to help customers reduce their impact on the planet by using less energy and even generating and storing it themselves.}

^{Energy Systems Catapult}

^{Energy Systems Catapult will bring energy system and home decarbonisation expertise and lead the research required to support development of compelling HaaS (and EaaS) propositions. The Catapult will draw on previous experience working with consumers in its Living Lab and from prior work with Baxi on HaaS. Energy Systems Catapult will lead the consumer-centric research activities.}

^Heatio

^{Heatio will be the consumer facing lender for the purposes of deployment of HaaS and EaaS.  To support & validate the deployment of these innovative green finance products, Heatio are developing their Home Energy Management System (HEMS). This provides accurate system specification, predicted performance, in home optimisation and impact validation."}

^{* £150 is based on an average Energy as Service package for a 4 bedroom detached property.}

^{** Estimated energy bill savings are based on a 4 bedroom detached gas heated property, typically heating their home to 21 degrees, switching to an ASHP, Solar PV and battery. Based on current price cap single rate gas/electricity tariff (Gas £0.07p kwh, Elec £0.29p kwh + relevant daily standing charge). This assumes full removal of gas and related standing charge from customers’ bills once switch to ASHP complete. No benefit from SEG export tariff included, which would further improve net energy bill savings. Annual bill before £2,280.73 vs £1,500.60 = annual savings of at least £780.13.}

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