The Zero Bills Story: From Concept to Reality
We should all support the concept of carbon-negative, zero-energy-bill homes amid cost-of-living and climate crises.
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We interrupt our usual podcast service to share an article we put together for Elemental, a publication which offers news, views and solutions on reaching net zero to an audience of built environment professionals.
The genesis of this story was our work with Planet A Solutions in Cornwall for the first season of the podcast, and we were delighted to follow up with Octopus Energy to see how far the Zero Bills concept has progressed since its inception.
Taking Zero Bills from Concept to Reality
The concept of a carbon-negative, zero-energy-bill home is one that we should all support amid cost-of-living and climate crises.
In the UK, Zero Bills offers homeowners a guarantee that they will pay nothing for energy in the first ten years of their contracts.
The proposition relies on homes being well insulated, heated by heat pumps, solar-energised and regulated by home batteries, so as to make the energy equation more affordable.
Having launched its Zero Bills tariff in November 2022, Octopus has now signed up major developers including Persimmon, Bellway Homes, and Hill Group. Hill is planning an 89-house development that will be the largest in the UK so far, including rental homes in partnership with Clarion Housing Group.
Moreover, Octopus is now targeting a European expansion, believing it has cracked the energy modelling and materials conundrum necessary to scale the proposition.
Yet until recently, the necessary alliance of home builder, energy provider and energy modelling consultants had yet to figure out how to make Zero Bills work in all but the most controlled circumstances.
Tom Carr, Co-Founder of Verto Homes, a sustainable homebuilder that created the first Zero Bills development at Nexa Fields in Exeter, says that he first envisioned the zero bills concept in 2010, but the advent of Octopus’ Kraken operating system made the idea possible.
Tech solutions
Kraken integrates with Zero Bills dwellings’ home batteries to compute customer preferences, weather forecasts and wholesale energy pricing to optimise energy management. This allows Octopus to flexibly manage a development’s energy flow and sell power back to the grid when it is most lucrative to do so, benefitting both customers and its own bottom line.
“ [Verto’s Zero Bills] homes have a net positive impact on the UK’s climate footprint throughout their lifespan, and save homeowners thousands of pounds in the process,” Carr says.
Verto is already delivering Zero Bills homes at price points suitable for social housing, with Sovereign Housing Association acquiring 20% of its Nexa Fields properties.
Social landlords should appreciate the standards, too, as they would reduce repair and maintenance costs linked to problems like damp and mould.
Opening Zero Bills to as wide a cross-section of society as possible is important for Octopus, which is working with housing associations to use the Social Housing Decarbonisation Fund (SHDF) to bring homes on estates, including some older buildings, up to Zero Bills standard.
Heat modelling
Several families are now resident in functioning Zero Bills homes at Nexa Fields, which is remarkable given that as recently as 2022, Verto and Octopus were struggling to make the concept work.
Enter the social enterprise Planet A Solutions, Truro-based heat and energy modelling specialists that Carr says helped Verto and Octopus crack Zero Bills: “[They] resolved design, heat load, and phase issues. Without Planet A, we might still be puzzled.”
Verto’s Zero Bills homes use super-insulating materials, argon-filled triple glazing and heat recovery systems to reduce CO2 by 3.4 tonnes per year, compared to average homes that emit 6.0 tonnes annually.
Yet even with their longstanding sustainable materials expertise, Verto needed assistance at the design stage to ensure that all its Nexa Fields properties, which include unique three, four and five-bedroom homes, were designed in a way that matched Zero Bills criteria.
Planet A co-founders Amanda Forman and Dave Parish said that it took them months of poring over energy modelling spreadsheets, talking separately with Verto and Octopus, to figure out how to quantify MVHR (Mechanical Ventilation and Heat Recovery) and spec electricity supply and heat pump effects while working within Verto’s construction parameters.
“You need to have enough PV to get a net financial win for Octopus, and there’s all sorts of constraints that come into play, not least the orientation and space you’ve got on a roof to generate,” says Parish.
Hardware choices
Attempting to integrate the solar string design across a variety of different roof types and aspects was particularly perplexing, especially as Octopus was at the time only operating with a single, relatively low capacity inverter compatible with GivEnergy home batteries.
The low voltage string constraint meant that only about 10% of the solar panels on the market were suitable. “That was a huge bit of market research, designing a spreadsheet with all the panels that are available on the market, within the right size parameters and voltage to fit the roof space and inverter requirement,” says Forman.
Octopus, which is hardware agnostic as long as devices are reliable and compatible with Kraken, has since broadened its Zero Bills stable to include alternative batteries and inverters.
Hardware from Solar Edge, Enphase and Huawei, as well as Vaillant and Daikin heat pumps, not to mention Octopus’s own newly launched “Cosy 6” in-house offering, is now Kraken compatible.
Looking forward, Octopus plans to bring Zero Bills to Germany, where the average standard of home insulation is significantly better than in the UK, and thus a consumer-focused rather than housebuilder-led proposition more feasible, according to Michael Cottrell, Octopus’ Global Partnerships Director.
Potential launches of the tariff in France, Spain and the United States are also on the cards, he suggests. Octopus now believes that Zero Bills can be retrofitted to homes built to the UK’s existing 2013 standard, opening a potential market of 500,000 domestic homes.
“Globally, we are targeting accreditation of 50,000 homes to Zero Bills standard by 2025,” Cottrell says, adding that Octopus has so far assessed about 4,000 homes in the UK, more than half of which were compatible with Zero Bills.
Future homes
Cottrell also hopes Zero Bills will become the benchmark for the UK’s Future Homes Standard, due to be introduced in 2025, which would add about 200,000 new homes suitable to take up the tariff each year.
“Housebuilders themselves have been the biggest barrier to scaling Zero Bills but we have been helping them reduce costs, opening up some of our own supply chain channels,” Cottrell says.
Now, the falling cost of materials, especially solar PV and home batteries, with prices of the latter half of what they were a year ago, is making the scheme more appealing to homebuilders.
“We are hoping to see a virtuous circle or halo effect, which works for consumers and homebuilders, with carbon cutting and grid flexibility benefits, too,” he adds.
Planet A continues to work with Verto amid plans for the housebuilder to launch two more Zero Bills projects in 2024, and several more down the line, including a dedicated retrofit proposition.
Forman and Parish, meanwhile, are working to address the UK’s green skills gap by teaching development courses at Exeter University’s The Future is Green project, part-funded by the government through the UK Shared Prosperity Fund.
“Our modules are designed to help people understand the links between fabric efficiency for houses, heat pump integration, solar PV and battery integration and, retrofit,” says Parish. “The purpose is to provide an overview of how those things are interlinked and to encourage attendees not to look at them separately”.
Click here to read the original Elemental story. Stay tuned for new podcast episodes coming soon!