Octopus and Ilke launch clean energy scheme with no bills for householders

UK power supplier Octopus Energy has joined forces with housebuilder Ilke Homes to develop a renewable scheme that aims to guarantee home buyers no energy bills.

The joint project between Octopus and Ilke, which builds prefab homes in factories, is designed to wean the country off fossil fuels in what the companies say is a first for the UK market.

Octopus chief executive Greg Jackson said the renewable scheme could transform the UK energy market, just as families struggle with soaring energy costs.

However, the initiative means buyers will have to pay an extra £8,000-£9,000 when they buy their house, said Giles Carter, Ilke’s chief executive. This is the cost of adding solar panels, battery storage and air source heat pumps to the homes to make them energy self-sufficient.

The companies are piloting the project with a pair of two-bedroom, semi-detached family homes in Essex. They have plans to expand the scheme to more than 10,000 homes by 2030.

Octopus has pledged that homeowners will pay no bills unless they use more than 10MWh of energy, which Jackson estimates is treble the standard annual usage of a household. Any excess energy generated can be fed back to the grid.

“We think [the homes] could be self-sufficient forever. That’s a blueprint. Sooner or later, you start to be able to transform an energy system when you are doing that,” said Jackson.

The partnership aims to demonstrate that “a sustainable future doesn’t mean being cold and having to wear hemp. It’s about living in homes which are as high quality as you would expect elsewhere”.

If the solar panels fail to generate enough energy, the homes are still connected to the grid and can draw energy without it affecting their bills, added Jackson.

Octopus’ guarantee of zero bills is made for a 12-month period rather than in perpetuity, though Jackson and Ilke’s Carter say they expect to roll on the zero tariff indefinitely. With annual household energy bills rising and expected to reach as high as £2,800 later this year, Carter argues that home buyers would quickly make their money back.

He expects green technology building costs to reduce over the decade. “By 2030, we hope there is zero incremental cost,” he said.

The UK’s housing stock is among the oldest and least well-insulated in Europe.

The government has made clear that decarbonising homes will be essential if the country is to hit its legally binding net zero target by 2050, but withdrew a flagship grant scheme to help homeowners make their properties more efficient last year.

According to Carter, promising zero bills at a time when families are facing soaring power costs is a more effective way to get consumers on board with the clean energy transition. “The most powerful word in marketing is free. How do we create a carbon transition? We create a proposition that consumers can engage with.

If you can offer zero bills and save the planet as well, then you’re on the right track,” he said.

George Hammond | Financial Times