Octopus Energy Reprimanded Over Misleading £500 Heat Pump Ad

UK energy supplier Octopus has been told to withdraw a social media advert that claimed heat pump installations could start at just £500. The Advertising Standards Authority has ruled that the ad omitted key details about pricing, rendering it misleading to most customers.

The campaign, first seen in September 2024, promoted heat pump and installation packages “from as little as £500.” While technically possible under certain conditions, the ASA found that this pricing would only apply to a small fraction of homes — those that qualify for the full £7,500 available through the government’s Boiler Upgrade Scheme.

Although the ad mentioned that the government covers up to 90 per cent of the cost of a new heat pump, it never explicitly referenced the grant scheme by name. It also failed to explain that actual prices depend on a range of factors, including property size, age and insulation level.

In newer or smaller homes with strong energy efficiency ratings, a customer may approach the £500 mark. But for most households, the actual cost would be significantly higher.

The ASA stated: “There was information on the [‘learn more’] page that the claimed price of £500 reflected a net cost after applying for the BUS funding, which was determined during the eligibility assessment stage.

“Potential further costs – which could include planning permission, structural surveys, and any site preparation works – were highlighted in the sign-up journey. Their terms and conditions made clear the quotes were based on standard installations.”

When questioned, Octopus said there wasn’t enough room in the ad to include every detail. They pointed out that a “learn more” button was provided, linking users to an FAQ page that explained how costs are calculated. The company also stated that between 10% and 15% of UK homes could potentially be eligible for the lowest-cost offer. According to their 2024 figures, 87 per cent of Octopus heat pump quotes came in below the average post-grant price of £5,321.

“We understood Octopus had used a predictive model to underpin the claim made in the ad,” the ASA’s ruling states. “It had input details from tens of thousands of surveys they had carried out on homes assessed for heat pump installation, along with data they had pulled from recent, available EPCs, into a predictive model. The model covered homes of different sizes, insulation levels and with different degrees of change needed to switch to a heat pump.”

But it adds: “At the time the ad appeared, in September 2024, 5.8% of Octopus’s heat pump sales had been made at or below the price claimed in the ad.”

Despite this, the ASA ruled that the ad exaggerated the availability and scale of the discount. It emphasised that any pricing claims based on government grants must be clearly labelled and should reflect the cost most customers will realistically pay.

The regulator concluded that the campaign breached several parts of the UK advertising code, including rules on misleading claims, insufficient evidence and unclear pricing. Octopus has now been ordered to withdraw the ad and refrain from running it in its current form.

The timing of the ruling highlights a larger challenge. The UK continues to struggle with low adoption of heat pump technology.

According to the Climate Change Committee, by 2024, only 1% of British homes were expected to have a heat pump installed. That’s one of the lowest figures in Europe. In 2022, only around 55,000 units were installed, far below the government's target of 600,000 units per year by 2028.

One of the biggest obstacles is the upfront cost. Even with the government grant, most households face installation and equipment expenses of more than £4,000.

Another issue is operating costs. In 2021, the government pledged to reduce the imbalance between electricity and gas prices, aiming to make heat pumps more affordable to run. That effort has since stalled. Both the Climate Change Committee and the Public Accounts Committee are now urging ministers to resume this work as a matter of priority.

The PAC has also called for a centralised and easy-to-use website that would help homeowners understand whether a heat pump is suitable for their property. It wants the platform to include clear guidance on cost estimates, savings projections and how to choose qualified installers.

A new Warm Homes Plan is expected to be released later this year. The government has earmarked £13.2 billion for the scheme, which will cover energy efficiency upgrades, electric heating and clean cooking solutions.