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Heat pumps to be installed in 50,000 households a year

Duf Hart-Davis ground heating system with Ross Verity installing the heat pump in the house - Christopher Jones
Duf Hart-Davis ground heating system with Ross Verity installing the heat pump in the house - Christopher Jones

A green energy company plans to install 50,000 heat pumps a year in British homes after securing a £70m investment from Octopus Energy and Legal & General.

Cornwall-based Kensa Group said it would use the funding to ramp up the roll-out of its ground source heat pumps.

Kensa said the deal represented the UK’s largest investment so far in the heating devices and would lead to the creation of more than 7,000 jobs by 2030.

Electrically-powered heat pumps are being pushed by the Government as an eco-friendly replacement for gas-fired boilers.

Ministers want 600,000 heat pumps to be installed per year by 2028, with grants of £5,000 and £6,000 currently available for air source and ground source heat pumps respectively per household.

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Uptake of the grant scheme has so far been low, with experts warning that many consumers are still put off by upfront costs of around £2,000 even after the grants.

Ministers hope the grant funding will help the industry grow and bring down prices for customers.

Just 4,186 certified ground or water source heat pumps have been installed in the UK since 2022 when the Government’s support scheme was launched, according to data from the Microgeneration Certification Scheme, which assesses the devices.

By comparison, 40,685 air source heat pumps were installed over the same period.

Ground source heat pumps absorb heat from the earth by circulating fluid through pipes buried underground.

The temperature of this fluid is then raised by a heat exchanger inside the home and transferred to water for use in heating radiators or running hot water from taps.

Octopus said its investment marked its entry into the ground source heat pump market. The company previously invested in Renewable Energy Devices, a Northern Irish air source heat pump manufacturer, and has announced plans to launch its own air source heat pump.

Zoisa North-Bond, chief executive of Octopus Energy Generation, said: “Backing Kensa will help rapidly expand Britain’s fast-growing ground source heat pump industry.”

Alongside ground source heat pumps, Kensa builds so-called ambient ground loops, which can serve multiple heat pumps inside a block of flats or other large buildings such as offices.

Legal & General Capital first backed Kensa in April 2020 with the aim of scaling up ground source heat pump installations across the UK.