Does Octopus Energy’s ‘zero-bills homes’ project live up to the hype? We visit a site to find out

We ask Ms Wates what will happen in five years’ time, when there is no longer a guarantee and she will have to pay for the amount of energy she consumes.

She responds: “At the moment, I’m saving money… and at least now I know what my usage is throughout the year so I can budget better.”

“We should be moving away from oil and gas,” she adds. “It’s not sustainable, whereas this is.”

The technology

In the Octopus-Hill partnership, the energy provider sets what the required technology is to achieve the Zero Bills tariff, while the builder develops the homes. The cost of the additional technology, which Clarion has put at approximately between £10,000 and £15,000 a home, is split between the housing association, Octopus and Hill.

“We look at how the home is going to be built, called a SAP [Standard Assessment Procedure] calculation, and we will take that and look at the heating and hot water consumption, and that will help us determine how much solar the home needs to generate in order to meet the zero-bill criteria,” explains Hannah McCarthy, head of partnership – new homes at Octopus.  

“We need it to generate more than the home is expected to consume. So that’s looking at heating, hot water but also… your kettle, your Xbox, your TV etc.

“We will say how much solar they [the developer] need to achieve on that home, and each individual property is given a target, [and] they’ll work out whether they can achieve it or not. And if they can, like the ones here, we can accredit them zero bills based on the amount of solar, have they picked the right battery and the heat pump that works with it all.”

Octopus has approved eligibility for more than 6,000 homes through partnerships with developers, providing affordable and private rent, as well as private market sale and shared ownership properties. This includes residents already living in homes, homes being built and homes that are due to be completed soon.

Zero-bills homes are predominantly new builds. However last year, Octopus announced that it had kicked off a series of trials for a zero-bills retrofit product. So far, it has retrofitted 36 homes to the Zero Bills tariff.

How does the technology work?

“The heat pump will heat the home and the hot water, [while] the solar panels generate the energy from the sunshine. That [energy] can be stored in the battery and used to power the home,” Ms McCarthy explains.

“When there’s loads of wind energy, [which] is really green and cheap, but actually sometimes the grid can’t take in anymore because there’s so much abundance of wind energy, for example, [so] we can actually take some strain off the grid and fill up the batteries.

“So, they’re good storage units for when the grid needs us to take in energy, but we can also therefore send it back when the grid really needs support.”

The house builder pays for the technology to be fitted, and the material costs for the kit have fallen from around £20,000 to under £10,000 in the past three years. In new build homes, the net additional cost is lower as solar panels can replace tiles on the roof and a heat pump replaces the gas boiler.

The new FHS requires new builds to use of some of this technology, therefore we can expect homes to have renewable technology such as heat pumps and solar panels as standard when this comes in, just to meet building regulations. But what differentiates these homes is that they have more solar panels and a battery.

However, there’s a caveat to the Zero Bills tariff – it has a fair use allowance based on the home’s total energy consumption over a year. This is around double the expected consumption of an average home, measured through the home’s smart meter.

Although more energy is imported in the summer and exported in the winter, zero bills are guaranteed all year round. This is because over the course of the year, this is balanced out.

One challenge, Ms McCarthy says, is the roof space on an individual home, which may limit the number of solar panels installed.

“You may not be able to get the amount of solar on that’s required,” she explains. “Same if you’re going above two storeys… that can be a bit of a challenge. That’s probably the biggest challenge of Zero Bills – just the sheer amount of solar we do need.”

“As long as the equipment is still operational after the guarantee length, we’re very much anticipating that the tariff will continue”

But Ms McCarthy adds that solar panel technology is getting better with higher wattage, so a single panel can produce more energy than before.

The idea for the development in Essex came about in 2022, construction started in 2023, and the portion of homes for sale started coming on to the market in 2024. The scheme is also one of Octopus’ earlier projects, with newer projects now guaranteeing up to 10 years of no energy bills.

“We looked at modelling [and] started off as five years and that was what our modelling suggests we could get comfortable with, given there’s so much uncertainty and we don’t know what energy bills are going to do in the future or energy prices,” Ms McCarthy says.

“We then actually extended that to a 10-year guarantee. But as long as the equipment is still operational after the guarantee length, we’re very much anticipating that the tariff will continue.”

The developer’s costs

The homes can be great for residents, including social tenants, to help them save on their energy bills. But are these properties viable to develop?

Octopus approached the developer with the idea for the Essex project, says Andrew Day, sustainability director at Hill. When asked if it costs more to build these homes than regular homes, he says it does.

“I don’t think I’m able to tell you the difference,” Mr Day responds, adding that Hill has pivoted to air source heat pumps since 2021.

“Given the FHS, and heat pumps, is a new regulation from March 2026, with one-year lead-in and a further one-year transitional arrangement, the sector baseline costs will not be known until then… whereas Hill pivoted away from gas from 2021, so have built in the costs much earlier than the FHS,” he explains.

“We’re just doing some numbers at the moment, but in 2025, 53% of the homes we delivered either had an individual heat pump or were connected to a communal heat pump system.”