How one household is cutting its energy costs to nothing

The Naylor family’s four-bedroom house in Milton Keynes now operates a bit like a small power plant after being upgraded with solar panels, a battery and a heat pump.

Clare Naylor used to watch energy use closely, making sure her family stayed within budget by relying on hot-water bottles and extra blankets. Now she expects not to pay a bill at all.

As households across Britain face higher energy charges after a rise in the price cap and further increases expected later, the improvements to Naylor’s property mean her family should not have to pay for their energy use.

The detached home was fitted with a heat pump, 17 solar panels and a large battery in the garage to store and manage the electricity the system generates.

Along with four new radiators, the setup allows the house to use a tariff that guarantees no energy bills for five years. In practice, the property can act like a mini power station, sending surplus electricity back to the grid.

Provided the family stays within a “fair usage” limit, Octopus Energy says it will not charge them for heating, lighting or the everyday electricity used by a household with three children under 10.

“We were always fairly careful,” Naylor said. “Our heating was only ever set to 18C [although] we might boost it if the family were coming around. Otherwise it was slippers, hot-water bottle, jumpers – that’s how you get through the winter.”

She says this winter she will be able to warm the house before the children return from school, something the family did not previously do.

The household’s bills were already relatively modest, at about £130 a month, and the money now saved is expected to go toward family holidays.

The home, built in the 1980s, was retrofitted free of charge by Santander as part of a project looking at how to finance energy-efficiency improvements. Without assistance, the solar panels, heat pump and battery would have cost just under £20,000 after a government grant.

Octopus’s “Zero Bills” tariff is already available in hundreds of new-build homes across the country. The company is now testing whether it can also work in older houses that need retrofitting, such as the Naylors’.

To qualify, properties need strong insulation, solar panels, a heat pump and a battery so they generate more energy than they consume. Nigel Banks, technical director of Zero Bills at Octopus Energy, said these homes usually produce slightly more over a year than they use, and the company also needs to earn money by selling surplus power back to the grid.

Homes must also be entirely free of gas, including for cooking, which meant the Naylors’ gas boiler had to be removed. The zero-bills offer does not include electric vehicle charging.

Banks said the best candidates for retrofit are usually homes built within the last decade and already insulated to a good standard. The usage cap varies from house to house and is set according to typical consumption, plus a buffer.

Santander is now looking at ways to provide financing for households that need to borrow for retrofit work. For example, its home improvement loan, at 6.4% interest over five years, would mean monthly repayments of £389 on a £20,000 project.

Mick Taylor of Santander said the bank faces a major challenge because it has 1.5 million mortgage accounts, and most of those customers are also paying monthly energy bills.

He said consumers are worried energy costs will keep rising and are often among the second- or third-largest household expense. “What can we do to help the country move towards net zero with such a big mortgage portfolio? We’ve obviously got a role to play,” he added.

Naylor says her goal is to keep the house at a steady warm temperature through the coming winter. “And then train my children to keep the door shut, which will be fun,” she added.