The Interview… Nigel Banks, director of Zero Bills at Octopus Energy

Hollymead Square was the first site of any reasonable scale where every single home was a Zero Bills home. There are 89 homes on the site, from two‑bed bungalows to five‑bed detached houses, with a real mix of tenures – private sale, shared ownership and affordable rent.

We worked with Clarion as the housing association and Hill Group as the housebuilder to agree a specification that would deliver Zero Bills across all of those homes. One of the biggest learnings has been how to make the model work consistently across different house types, roof types and tenures, and how to coordinate effectively with both a housing association and a private housebuilder. 

It’s also been a chance to understand the customer base more deeply. We’ve seen strong interest not only from younger buyers who are very focused on energy bills and green technology, but also from people downsizing in retirement, who in some cases can reach the position of having no mortgage and no energy bills by moving from a larger older home to a smaller, efficient new build.

On the technical side, we’ve learned a lot about where to locate batteries, how to get enough solar on complex roofs, and how to refine the specification. And over the period the scheme has been built out, technology has improved significantly: solar panel efficiency has gone up by about 20%, costs have dropped by around 50%, and battery and inverter systems that used to be separate are now combined into single, faster-to-install, more cost‑effective units.  

Overall, the experience has been very positive, with strong feedback from residents, the build teams and the sales teams, and customers there have already been enjoying Zero Bills for about two years. 

What safeguards are in place for homeowners? 

We’re able to guarantee zero bills because we tightly link the physical specification of the home with our smart energy management. If you combine sufficient solar PV, a properly sized home battery, efficient electric heating – typically an air source heat pump – and smart control of when you store, consume and export energy, then under normal usage patterns the revenues from exports can cover the cost of any imports. We set a Fair Use policy to make sure this is sustainable.  

The allowance is roughly double what we’d expect a home of that size to use, so people can live comfortably, heat their homes properly and not worry about day‑to‑day usage. What it doesn’t cover is very unusual or extreme consumption – for example, installing a Bitcoin mine or very large additional loads. In those cases, if they push usage beyond the Fair Use limit, a bill would apply. 

Electric vehicle charging is billed separately from the Zero Bills home energy, and that’s handled through our smart tariffs, which allow very low‑cost EV charging if the car is charged intelligently.  

From a consumer protection point of view, Zero Bills is simply a tariff available to homes that meet the specification. Customers can can leave at any time without exit fees. They are free to choose another supplier, and if other suppliers introduce similar offers, they can switch to those too.  

All of this sits within the standard UK regulatory framework under Ofgem. We make the terms – including Fair Use and separate EV billing – very clear in the tariff information. We also make sure systems are installed correctly, commissioned properly, and that customers understand their controls, and we continuously feed what we learn back to housebuilders to keep performance on track. 

What are the main challenges in scaling this model to more developments across the UK? Are there plans for rapid expansion? 

The biggest challenge so far has been that most new homes in the UK have still been built with gas boilers as the default heating system. More than two‑thirds of homes built in recent years have been on gas.

Once a housebuilder has committed to gas infrastructure on a site, they’re essentially locked into delivering that scheme with gas boilers, and it becomes extremely difficult to retrofit a Zero Bills model onto those homes. That’s why the shift that will come with the Future Homes Standard is so important: future sites will move to low‑carbon heating systems like heat pumps from day one, and that opens the door to building to a Zero Bills specification much more widely. 

Another historic barrier has been cost. Two or three years ago, the uplift to reach a Zero Bills spec was often in the range of £15,000 to £20,000 per home, which was too high for many schemes. The cost of solar panels and home batteries has more than halved in the last few years, and as a result the additional cost has come down to between roughly £5,000 and £10,000 per house. That makes Zero Bills much more viable commercially. 

We’re also seeing strong interest from single‑family build‑to‑rent funds, who like the ability to offer “bills included” homes – in some cases including Wi‑Fi as well – which are very attractive to renters. Zero Bills lets us take the energy bill risk and manage it, while delivering a product that tenants really value. 

In terms of expansion, we started in England and now have Zero Bills homes in Wales and Scotland, and we’ve taken the concept to Germany, France and New Zealand as well. Octopus is now an energy retailer in eight countries, and we’re rolling out propositions like Zero Bills wherever the conditions are right. We already have more than 5,000 homes approved to be built to the Zero Bills standard, so we’re very much in the process of scaling this model in the UK and internationally. 

How important is policy – like the Future Homes Standard – in encouraging wider adoption of zero-bill, energy-independent homes? 

Policy is absolutely critical. At the moment, roughly 70% of new homes are still built with gas boilers. The Future Homes Standard will require low‑carbon heating systems, such as heat pumps, from day one, and it is also expected to require more solar PV on roofs. That combination moves standard new builds much closer to the Zero Bills specification. Once you have good insulation, low‑carbon heating and a reasonable amount of solar, adding more PV and a battery can take you from low bills to genuinely guaranteed zero bills for a defined period. 

The industry has known this shift was coming since at least 2019, when the consultation was launched, and most major housebuilders have already done trials with homes on heat pumps and built-up supply chains.  

The Future Homes Hub has spent years producing guidance to help housebuilders manage the transition. So in many ways, we’re as well prepared as we can be. I see this as a real opportunity to make low‑carbon, low‑bill homes the default expectation when someone buys a new home, and to position Zero Bills homes as a particularly compelling option for people who want certainty over their running costs and carbon footprint. 

Beyond Zero Bills, what advice or solutions does Octopus have for people looking to cut their bills or reduce their carbon footprint? 

In both new homes and existing homes, the single biggest change you can make to cut carbon – and often bills – is to move from gas or oil heating to an efficient electric or low‑carbon system, particularly a heat pump, and to pair that with the right smart tariff.

We recently published research with the Home Builders Federation (HBF) which looked at the energy bills and carbon emissions of new homes. What it shows very clearly is that the gas boiler is the main driver of a new home’s carbon footprint. If you move to an electric system, especially a heat pump, you can typically achieve around an 80% reduction in carbon, because the electricity grid has become so much cleaner over the past decade. 

Heating your home with electricity – whether that’s through a heat pump, a panel heater or even your oven or kettle – is now about half as carbon‑intensive as heating it with a gas boiler, and it’s on a trajectory toward zero as the grid decarbonises. We’ve developed our Cosy heat pump range with very simple controls for customers (on, off and boost), with more detailed settings available via the app, and we’re seeing average efficiencies around 370%. Previous studies have shown averages in the 260% to 280% range, and gas boilers are usually around 80% to 90% efficient, so there are huge gains if you get the technology and controls right. 

For existing homes currently on gas, if you’ve got suitable external space, we can often replace a gas boiler with a high‑temperature heat pump that works with the existing radiators and fabric, sometimes without any major upgrades. When you combine that with the right Octopus smart tariff, we’re typically saving customers in the order of £200 to £300 a year on their energy bills, while significantly cutting their carbon footprint. 

Looking forward, how do you see the concept of energy-saving homes evolving in the next decade, and what role will Octopus play in shaping that future? 

I think we’re moving from a world where we simply talk about “energy‑efficient” homes to one where we can actually guarantee outcomes for customers – whether that’s zero bills, or a guaranteed discount compared with a standard tariff. Zero Bills is one expression of that, but we’re already developing similar ideas in other sectors. For example, we’ve created a tariff called Tenant Power, which we’re rolling out with some housing associations. There, we use on‑site solar and batteries to cut the effective electricity unit cost, and we can guarantee around a 30% reduction in tenants’ electricity bills while also generating a revenue stream for the landlord. 

More broadly, the idea is that your home becomes a mini power station, generating its own energy, storing it, and exporting it when the grid most needs it. With the right technology, tariffs and smart controls, that can move you from small savings of 10% to 15% to really meaningful reductions in bills, or even zero bills in some cases.

Our role at Octopus is to combine the technology, the data and the tariffs in a way that turns our confidence in these solutions into something customers can rely on – backed by clear guarantees rather than vague promises. We know from the evidence that these technologies work and that customers on these schemes are very positive.

The next decade is really about scaling that, building confidence, and making energy‑saving and energy‑generating homes the norm rather than the exception.