Octopus Energy and British Gas engage in a dispute over £500 heat pump subsidies
In a recent development, the Advertising Standards Authority (ASA) has ruled against Octopus Energy for a misleading Facebook ad promoting heat pumps for "from £500". The ASA found that Octopus Energy lacked sufficient evidence to prove that a significant proportion of consumers could actually purchase and install a heat pump for that price through them.
The dispute centres around Octopus Energy's advertising claim, which the ASA deems misleading. Octopus Energy, however, claims that about 13.9% of their heat pump customers paid £500 or less between April 2024 and January 2025, surpassing the ASA's guideline that 10% of installations must meet the advertised "from" price.
The ASA's ruling is significant as it sets a precedent for future advertising of heat pump prices. The ruling requires Octopus Energy to ensure that future ads include all material information, such as government grants and eligibility criteria, and to hold robust evidence for any starting price claims.
The UK government is offering grants to help bring costs down in the electrification of home heating through the Boiler Upgrade Scheme. However, the ASA criticized the Octopus Energy ad for not mentioning that the low price was contingent on receiving a £7,500 government grant through the Boiler Upgrade Scheme.
The clash between Octopus Energy and British Gas highlights a growing rivalry in the UK's push to electrify home heating. Both firms are racing for market share in what is expected to become a multi-billion-pound industry.
British Gas defends its pricing by offering a "lowest price guarantee" and promising refunds if the system doesn't perform as expected. The managing director of British Gas, Andrew Middleton, stated that the company will only install a heat pump if it's confident it will heat a home as well as a traditional boiler.
For homeowners, it is important to ask for the full picture before committing to a heat pump installation. The ASA's ruling sends a clear message: green energy ads must be more transparent.
Octopus Energy has rejected the ASA's ruling regarding its heat pump ad. The company alleges that the ban was influenced by fossil fuel industry pressure aiming to undermine clean energy competitors. British Gas, on the other hand, is accused by Octopus Energy of making similar claims without scrutiny.
The debate over transparency in heat pump pricing and the role of government grants in advertised prices continues, highlighting the need for clarity and accuracy in green energy advertising.
[1] The Guardian [2] The Times [3] BBC News [4] Financial Times
- The ASA's ruling against Octopus Energy for a misleading heat pump ad brings into question the transparency in advertising among renewable-energy businesses, such as [1] and [2].
- The clash between Octopus Energy and British Gas underscores the competitive environment in the UK's push for electrifying home heating, which is expected to be a multi-billion-pound [3] industry.
- Both Octopus Energy and British Gas are vying for market share, with the former defending its costs by promoting the accessibility of heat pumps, starting from £500, while the latter offers a lowest price guarantee [4].
- The debate on heat pump pricing, particularly concerning government grants, has prompted the ASA to set a precedent for future advertisements, requiring full disclosure of all material information [1].
- The UK government's Boiler Upgrade Scheme aims to help cover the costs of installing heat pumps, but the ASA criticized Octopus Energy for not mentioning that the low price of £500 was contingent on receiving a £7,500 grant from the scheme [2].
- Octopus Energy plans to design their solar-powered homes with energy-efficient lighting and integrated roof-mounted heat pumps, but the ASA's ruling emphasizes the need for finance and business strategies that align with clear and accurate advertising [3].
- The finance sector plays a crucial role in the renewable-energy industry, with organizations like Octopus Energy seeking investments to build a more sustainable future [4].
- Homeowners should guide their selection by gathering all relevant information, understanding the costs, and ensuring that advertisements provide a true picture of the products, particularly in the realm of green energy solutions [1].
