Octopus Energy has confirmed that households switching to heat pumps can save an average of £227 a year on their energy bills, as the company records its biggest-ever month for heat pump sales. The energy supplier, which serves Birmingham households, saw sales surge by more than 70 per cent year-on-year in July, with demand for Boiler Upgrade Scheme (BUS) grants rising by nearly 20 per cent.
Record sales and rising demand
Octopus Energy's heat pump sales in July were the highest in its history, with a year-on-year increase of over 70 per cent. This surge comes as more households ditch traditional gas boilers for electric heat pumps, driven by rising energy costs and government incentives. The company also reported a spike in applications for BUS grants, which provide upfront capital towards the cost of installing heat pumps and biomass boilers in England and Wales.
According to Octopus, customers on its Cosy tariff save an average of £227 a year compared with households using gas boilers, with 94 per cent of heat pumps being cheaper to run. The average cost for Octopus customers to replace an oil boiler with a heat pump is £3,000, while replacing a gas boiler costs around £4,000, making them cost-comparable or cheaper than the average gas boiler installation, based on data from Boilerguide.
Government grants boost switch from oil and LPG
Since the government increased the BUS grant for oil boilers to £9,000 in April, Octopus has seen nearly three times as many customers switching from oil and LPG boilers to heat pumps. This change has made the transition more affordable for households in off-grid areas, who often face higher heating costs.
Rebecca Dibb-Simkin, Chief Product and Marketing Officer at Octopus Energy, said: “The heat pump revolution is accelerating. We've never seen demand like this - thousands more households choosing to go electric to save money and insulate themselves from global price shocks. And we continue to put our money where our mouth is, sharing weekly saving data from our Cosy heat pump fleet on our Octopus Boiler Beater dashboard.”
Boiler Upgrade Scheme overview
The Boiler Upgrade Scheme (BUS) was launched on 23 May 2022 to support the decarbonisation of heat in buildings. It provides upfront capital grants towards the cost of installing approved heat pumps and, in limited circumstances, biomass boilers in homes and small non-domestic buildings in England and Wales. Last year, Ofgem paid grants worth £233.1 million, supporting the installation of 31,104 low-carbon heating systems.
For Birmingham households, the combination of lower running costs and government support makes heat pumps an increasingly attractive option. With energy prices remaining volatile, the shift to electric heating is seen as a way to reduce reliance on fossil fuels and protect against future price spikes.
Impact on households and the environment
The rise in heat pump adoption is part of a broader push towards net-zero emissions. By switching from gas or oil boilers, households can significantly cut their carbon footprint. Octopus Energy's data shows that heat pumps are not only better for the environment but also for household finances, with most customers seeing immediate savings on their energy bills.
As the market grows, the cost of heat pump installation is expected to continue falling, making them accessible to more households. The company's Boiler Beater dashboard provides transparent, weekly data on savings, helping consumers make informed decisions. With record sales and government backing, the heat pump revolution shows no signs of slowing down.
