Episode 4: Driving the home energy transition

Future of Utilities Podcast 

Driving the home energy transition 

Lindley Gooden: Hello, I’m Lindley Gooden. Welcome to the Future of Utilities podcast. Great to have you with us. Let’s talk about home energy management with Emma Fletcher from Octopus Energy. Great to have you. 

Emma Fletcher: I’m great, thanks. Thanks for having me this morning. 

Lindley Gooden: Happy to have you on stage. First of all, tell us a little about yourself and the work you’re doing. 

Emma Fletcher: My name is Emma Fletcher, and I’m the innovation director at Octopus Energy. My role is really to be the translation between what’s happening in the housing market and what we’re doing internally at Octopus in the energy market – listening to both sides, and coming up with solutions that actually change the way we live and solve the problems of green electrification. 

Lindley Gooden: In some ways, home energy management begins and ends at home – it’s what we do as consumers, as your customers. So what are the biggest issues when it comes to lower carbon? What do consumers actually care about, and what gets in the way of adoption? 

Emma Fletcher: I don’t think there are many customers out there thinking about lower carbon, honestly. At the moment, everybody’s feeling the pinch – it’s all about their energy bills, and how much it costs to heat and power their home. For most people, the question is: how do I cut my bills? How do I make sure I can heat my home over winter, and keep me and my family warm? 

Lindley Gooden: It’s a difficult one, isn’t it – those things probably run in parallel. We might care about carbon in our own lives, but when it comes down to a choice, cost is what actually decides it. 

Emma Fletcher: Nearly always. There are early adopters out there who want to try the technology and understand how it works, but most people don’t want another app in their life, another thing to operate or think about. Especially right now, there are too many other challenging things going on. So simple solutions that reduce bills are a far more appealing proposition than a conversation about carbon. 

Lindley Gooden: So how do we bring those two things together – how do you get low carbon into people’s lives without asking them to change what they were already doing? 

Emma Fletcher: We want people to see this as a journey – they don’t have to do everything to their home at once. For a lot of people, this feels like a tsunami: they know they’ll have to do something eventually, but the anxiety around it is huge. So we start by helping customers navigate tariffs. It sounds boring, but just getting onto the right tariff means you’re using electricity – mainly electricity, in this case – at the lowest possible rate, when the grid is green and clean, and avoiding it when it’s expensive. 

From there, it’s things like our Fan Club – if you live near one of our four wind turbines, you get 20% off your bill when it’s turning, up to 50% off when it’s really generating. Or you could look at solar and battery, or just solar on its own – generating locally at home. With the grants available for heat pumps, it’s then a question of whether a heat pump makes sense for your home, and tying that into the right tariff so you’re using it as efficiently as possible. 

Lindley Gooden: Before we came on, I mentioned the two things that bother me personally: cost and space. I imagine that’s true for a lot of people – you’d be lucky to have a large garden with room to spare for a heat pump. Those are real blockers that stop people getting to the next stage. Is it important for Octopus to offer a way through that without it being a complete hassle? 

Emma Fletcher: A hundred percent – this is on us as an industry to make simple. A lot of people don’t realise their mortgage provider might already offer cashback or better mortgage deals for installing this kind of technology. 

Lindley Gooden: I’ve never heard of that. 

Emma Fletcher: Exactly. Only around 35% of UK homes have a mortgage, and of those, about 94% arrange it through a broker – so people aren’t necessarily thinking to check their mortgage provider’s website for deals. That’s a real disconnect. 

On the practical side, we realised we needed a better heat pump, so we bought a company in Northern Ireland called RED and turned that technology into our Cosy heat pump. It fires air out at a 45- or 90-degree angle, so it can sit with a much closer back-to-back distance, both behind and in front of the unit – a tighter, tidier footprint. On cost, there are grants and loans available, including the Boiler Upgrade Scheme grant of £7,500, or £9,000 for oil properties, which should be taken up far more than it currently is. 

Lindley Gooden: So that deals with space? 

Emma Fletcher: Not entirely – there’s still space needed inside the home, typically for storing hot water if you have a heat pump. We’re working on that at our innovation centre in Slough, but we’re not there yet. 

To be honest, that’s actually what got me into Octopus. I took my entire village off oil by building a district heat network, with an energy centre on the edge of the village – something I think government is now exploring more seriously too. We have 108 boreholes, 200 metres deep, industrial air-source heat pumps, and a private wire to a solar farm about eight kilometres away. We use ground source in winter and air source in summer, and simply pump water at 70 degrees through the road into people’s homes – no additional infrastructure needed inside each house. I think that’s going to be one of many solutions going forward. 

[This conversation is brought to you by Modulr, the payments automation platform. Modulr automates how money moves, delivering the efficiency, accuracy and reliability that finance operations need to scale.] 

Lindley Gooden: Lovely ideas – let’s bring it back into the city. Forward-thinking housing associations will be looking at how to help tenants with this too. But if you’re in high-density housing, a tower block, this can feel completely out of reach. How would you encourage that network – housing associations, people in flats on the 15th floor – to feel they can access something more low carbon? 

Emma Fletcher: It’s genuinely the most challenging house type we’ve got – apartments and flats. Who owns the block? How much space is there around it? What can you actually do in a communal building? And it’s not just about heating in winter, it’s increasingly about cooling in summer too. 

Honestly, there are few options available right now. You can move to a time-of-use tariff, which helps bring bills down. There are simple technologies too – things like window shutters that genuinely help. We’re working on it, but nobody’s landed on a perfect solution yet. Colleagues at Kensa are looking at ground-source options where there’s space for boreholes. We’re increasingly seeing large batteries too – we’ve just completed our first microgrid scheme in Epping, storing power at scale where there’s room for it. But these kinds of solutions are needed, and I’d genuinely like to see more from the industry – what’s out there, what’s being developed, for the most challenging properties and the most challenging households, particularly around fuel poverty. 

Lindley Gooden: That gives me hope, but there’s clearly a long way to go – the ideas are great, it’s making them work for everyone, not just people with the space and the money. Let me ask the audience here at the summit: hands up if you’ve got any low-carbon tech connected to your home directly. 

[A small number of hands go up.] 

Lindley Gooden: Three, four – maybe a fifth. That’s a pretty low number given how many people are in this room, though probably about what we’d expect. 

Emma Fletcher: Agreed – although electric car ownership tends to be higher in a room like this, and we see that as the gateway into thinking about everything else you could do to your home. 

Lindley Gooden: Electric cars – anyone? Yes, that looks like two or three times the number. 

Emma Fletcher: Exactly. Once people understand how to flex their car’s charging around time-of-use tariffs, that naturally opens up thinking about adding a battery too. Vehicle-to-grid is the thing we think will really shift in the next couple of years – the ability to use your car to help power your house, and vice versa, for real flexibility. 

Lindley Gooden: It really is about bringing those parallel conversations together – especially with a cost-of-living crisis that’s run for years, and now an energy crisis for the second time in four years. There’s a lot else on people’s minds, yet this keeps scratching away in the background, especially with what looks set to be a hot summer. 

Emma Fletcher: By current forecasts, yes – so it’s moving toward the front of people’s minds, even if the two conversations don’t quite meet in the middle yet. One of the other pieces that needs to happen is around investors and funders – getting them to weigh the benefits against the costs, and look past short-term gains. 

Lindley Gooden: So how do we bring investment into this more broadly? 

Emma Fletcher: A lot of people have been thinking hard about this, particularly housing associations, for a long time. One way we’re helping generate a return is through a tariff we co-developed with Together Housing Group, with their tenants in mind – built around them receiving grants for solar and battery. We can then offer tenants a third off their unit price of energy, while flexing the battery and solar ourselves, which gives the landlord a return that many social landlords haven’t tapped into before – money they can then reinvest in other properties. We can replicate that model with other landlords too. 

On the investor side more broadly, we’re seeing a lot of interest from the build-to-rent market, which increasingly wants our zero-bills proposition because they believe it adds value to the property. One of the keys to unlocking that – and this is work I’m doing with RICS, where I chair the professional group panel for the residential sector – is establishing whether this kind of sustainability work genuinely adds value to a home. We’ve just started a working group to look at exactly that. I think we have to unlock this from multiple angles at once: bringing the cost of kit down, getting tariffs right to bring running costs down, and building genuinely investable propositions – a win for everyone, and fair to all. 

Lindley Gooden: One of the recurring themes at the summit this year has been how interconnected these conversations are. I’m a small landlord myself, and I can barely think about profit, let alone investment – so where does the money actually come from? It has knock-on effects into the mortgage market too. It feels like we need a genuinely wide conversation that still manages to focus on the real questions people with a conscience, who want to go low carbon, actually need answered. 

Emma Fletcher: Having that conversation properly is really important right now. I’d also point to the UK’s sustainability reporting requirements coming in from the 1st of January – large investors will have to account for their Scope 1, 2 and 3 emissions, and that’s going to shift where money flows much faster than it has been. If you’re buying a property, you’ll start looking at it through the lens of what you can improve. If you’re renting, you might start getting more information about what your energy bills actually look like. 

That’s the key thing, really – we’re all on a journey. Nobody’s going to do everything at once, but lifestyles will shift bit by bit. That doesn’t mean being cold, or being out of pocket. It just means thinking about how you make that journey. 

Lindley Gooden: Let’s get that conversation going properly, then. Final question – let’s bring out the crystal ball. When this all goes well – when investors are investing, when people like you are delivering good ideas to market – what does the average neighbourhood look like in a few years? Are we all going to look like your old village, full of local green energy sources? 

Emma Fletcher: I’d like to think we get to greater energy resilience closer to household level. But honestly, the real goal for me is eradicating energy bills for our customers altogether – a system so flexible that the lights stay on, homes stay warm, through a mix of different technologies, and people are just living their lives without really thinking about their energy bill or what’s going on behind it. It just has to be seamless and easy. 

Lindley Gooden: Lovely. Emma, thanks so much for joining us – great to have you with us. 

Emma Fletcher: Thank you. 

Lindley Gooden: And that’s it for now from the Future of Utilities podcast. Great to have you with us too – see you next time. 

This conversation is brought to you by Modulr, the payments automation platform.