Home energy: how low-carbon tech like heat pumps or solar panels can help you make huge savings on bills

Add in a heat pump and insulation measures and you could save up to £1,878* a year – plus upgrading our homes with the addition of low-carbon tech could boost the value of your property by up to £10,000.

Some mortgage providers are now offering lower rates for people buying an energy-efficient home, and rewards to make it even more enticing to make the switch.

But if you’re baffled by what’s on offer – and daunted by the upfront investment needed – then help is at hand. ScottishPower’s Smart Solutions team installs solar panels, heat pumps and electric vehicle (EV) chargers right across the country, providing access to low carbon technologies for any household that wants to make the transition to cheaper, low carbon energy.

And with energy prices forecast to remain high for some time to come, the pay-back period for these measures becomes ever more compelling.

We spoke to Rob McGaughey, Head of Smart Heat at ScottishPower, about how the company is working to make it cheaper and easier for our customers to access heat pumps and the latest green tech to make their homes smarter, warmer and more energy-efficient.

Saving you money today

The modelling work carried out earlier this year on a home’s running costs by ScottishPower and WWF-UK confirmed the significant savings available, explains Rob.

“We wanted to champion some of the low-carbon energy solutions and energy-saving measures and demystify the value that they have, because there's a lot of conflicting information out there.

“We started off with a really poorly efficient house with solid walls, single glazing, and we incrementally added energy-saving measures from a simple hot water cylinder jacket all the way through to loft insulation, cavity wall insulation, and double glazing, then more and more.

“What we found was that they all led to really big savings. That's not a surprise, we knew that already, but we wanted to quantify what that looked like. Then we went further and added the heat pump, solar panel with battery and without battery, and electric vehicle chargers.

“And we found that not only can they improve homeowners’ comfort, but in combination, they can increase the value of a home by up to £10,000 and they can reduce energy bills by around £1,878 a year, which is a massive saving if you consider that the average back in April for most people's bills was around about £2,000.

“If you include the savings from switching from petrol to electric, the annual savings could be as high as £2,300 because of the difference in fuel costs. We were really pleasantly surprised at the level of savings, but not just that: you're also able to reduce your carbon emissions by over 95%.

“So not only are you doing your bit for your own personal pocket, but you’re also doing your bit for the planet.”

Adding value to your home tomorrow

In one of the largest assessments of its kind, the ScottishPower-WWF-UK report also analysed five million house sales in England and Wales and found that:

- Installing an air-source heat pump could increase the sales value by around £5,000-£8,000

- Solar panels could boost it by around £1,350-£5,400

- An EV charge point could add around £5,000.

“We realised the property supply chain, in terms of estate agents, surveyors, and the mortgage providers, didn't recognise the value of customers having a heat pump, solar panels, a battery or an EV charger installed in their home,” says Rob. In fact, the value of a house could be boosted by an average of around £10,000 as a result of installing all of these technologies.

So where do you begin?

There are a huge range of options out there, and the organisation is well aware that not everyone has the means to upgrade to the latest tech right now.

“That is the role of ScottishPower: to help people understand what their options are, and to make it easier to access them,” says Rob. “We will start to see more integration of these technologies – it shouldn’t be complex or make our lives more complicated, and ScottishPower wants to make these solutions easier for all of us to plug in and forget.

"A smart meter is the first easy step that everybody can make. And then taking energy-saving measures: everybody's home has their energy performance certificate which will recommend how they can make changes, from as simple as moving to LED light bulbs all the way through to improving the insulation in your loft or walls.

"Then the priority order of solar, heat pump and EV charging depends on your own personal circumstances, and it depends on what matters to you.

“If you want to save the most carbon, then heat pumps might be for you.

“If you want to reduce your energy bills, then solar panels are for you. And if you want to reduce your transportation emissions, then go for electric vehicles.

“It is a personal choice. We want to provide the information to help customers make that individual and informed choice.”

Cushioning householders against volatile energy prices

21% of the UK’s carbon emissions come from our homes, with three-quarters coming from our heating and hot water. This means that heat pumps can play a crucial role in meeting net zero carbon targets and addressing the climate emergency.

But in terms of energy security, as nearly 90% of the current increase in energy bills comes from the rising cost of gas, investment in low-carbon technologies offers an important means for homeowners to be less exposed to the volatilities of the energy market.

As a result, ScottishPower has seen a huge surge in customer demand since it began to offer these solutions nationwide a year ago.

Rob says: “We've seen three-fold the level of increase that we expected for solar panels. It's quite phenomenal – we didn't expect battery uptake to be as high as it is, because that's quite a new technology for homeowners, but we've actually seen that three-quarters of all people that are looking for solar panels are choosing to install a battery at the same time, which is an amazing level of demand.

“That just shows you how keen people are to remove their reliance on volatile gas prices, because, ultimately, it's the volatility in the gas market that's driving the volatility in the energy market; they want to save on their energy bills but also to be less exposed to it.”

In fact, the thirst for solar has exceeded the expectations of the whole market in 2022. Demand is starting to build for heat pumps too, although as the market is still developing, some have been a little slower to embrace it – but that’s all set to change.

Time to talk about heat pumps

“With heat pumps, we've seen enormous levels of interest but not quite as much uptake and that's just due to the maturity of the market. Customers are really just finding their feet in terms of learning what the benefits of a heat pump are,” says Rob.

Heat pumps can be a significant upfront investment: a typical air source heat pump costs between £10,000 and £13,000 while ground source heat pumps can cost more to install, but will benefit from lower running costs.

But the government-backed Home Energy Scotland Loan allows you to borrow up to £10,000 – and get up to 75% cashback for a heat pump. So if you borrowed the maximum of £10,000 and got £7,500 of that back, you would only have to pay back £2,500 on an interest-free loan.

“The great thing is that early adopters aren't going to be penalised, because there are fantastic government-backed subsidies that will help take the financial pressure off that purchase,” adds Rob.

The Home Energy Scotland Loan will provide 0% finance for energy efficiency, air source heat pumps, solar and battery. “With the cashback offer for heat pumps and the impact on your value of your property, you're really getting quite close to parity with a gas boiler. But you only realise the benefit to your property price if you sell your house, so it doesn't put cash in people's pocket,” adds Rob. "It's a smart investment, but we appreciate it's not an investment for everybody because not everybody will have the upfront capital."

"When you come to replace your heating system, you should consider green because it's actually more accessible than you think."

What are the benefits?

- Running costs: gas has increased in price faster than electricity, and a well-insulated home could make further savings by moving from a gas boiler to an heat pump

- Environmental: you can save over two tonnes of carbon from your home emissions by switching to cleaner and greener heating through an air source heat pump

- Comfort: heat pumps offer a steady comfort level - Rob lives with a heat pump at home and says his home no longer over and under heats throughout the year.

Time to act now

While replacing your heating system can seem daunting, help is at hand to explore the opportunities to switch to a greener alternative – just as many may be considering a move to an electric vehicle when they need a new car.

"It's never been more attractive to upgrade your home in this kind of way with the positive impact on house value, and the kind of support that the government are giving customers right now to make that investment,” he explains.

"But behind that is the fact that the UK has made a legal commitment to net zero greenhouse gas emissions. And if we consider that around 20% of our carbon emissions come from our homes and another 15% come from our cars, and we're currently experiencing the highest pressure that we've ever seen on global gas prices, everything is coming together at this point.

"The world of energy is changing; as the power sector decarbonises, electrification is the most sensible way to achieve our decarbonisation goals.

"I would always advocate that people do the simple things first like installing a smart meter, and looking at personal habits, but sometimes it can be very patronising telling people what habits they can change, because many people have already made all of those changes and it's still not making that difference for them.”

That’s why as well as working with private customers, ScottishPower is helping local authorities and housing associations to improve the lives of tenants with this green tech.Behind the scenes, the company is working hard to streamline the installation process as well as launching the first nationwide air source heat pump service plan "to make sure customers have access to regular service checks and understand how to use their new technology".

Find out more today

If you’re looking to replace an old boiler, or thinking about how you can live a smarter and greener life, now is the ideal time to explore what’s out there. To find out more about the solutions available and get a no-obligation quote, visit Heat pumps | Gas and Electricity Company | ScottishPower

Read the Better Homes, Cooler Planet report by ScottishPower and the WWF here

Get more information on Home Energy Scotland at www.homeenergyscotland.org

* Assumes that a household is on an SVT set at the level of the price cap for the period beginning April 2022.