Octopus Energy Group (Octopus) has taken a controlling interest in heat pump manufacturer Renewable Energy Devices (RED).
The energy giant looking to boost its presence in the heat pump market and ramp up production for UK households.
It will complete a full acquisition of the Northern Irish firm by the end of the year, at which point it is expecting the factory to produce over 1,000 heat pumps a month by the end of 2022.
Products will come in a range of different sizes, with a focus on smaller options suitable for the most common homes in the UK.
Octopus also aims to include “smart grid” technology in the heat pumps, enabling them to make the most of “spare” capacity on the electricity grid and distribution networks.
This would reduce the load at peak times, meaning lower running costs for customers.
When bought with the government’s new Boiler Upgrade Scheme, which offers £5,00 grants to homeowners to buy green technology, Octopus says the heat pumps will be comparable in price to a gas boiler.
RED’s existing factory in Craigavon will see a significant expansion following the investment, creating 100 new green engineering jobs by 2024.
Octopus is also scoping locations for more manufacturing sites.
Heat pumps: The ‘Model T’ moment for the industry?
The investment is the latest in a series of funding commitments Octopus has made to building an industry around low carbon heating and heat pumps.
It follows £10m invested into the UK’s first research and development centre for the decarbonisation of heat based in Slough.
Founder and chief executive Greg Jackson said: “This is the “Model T” moment for the heat pump industry. Thousands of heat pumps rolling out of RED’s Craigavon factory a month is just the beginning. Like the original Ford, we’re planning to scale production every year, cutting costs even further and making heat pumps affordable for everyone.
Heat pumps featured prominently in the government’s energy security strategy, which was published last week, with the launch of a Heat Pump Investment Accelerator Competition
The scheme will be worth up to £30m and aimed at making heat pumps in the UK, increasing the country’s energy independence by reducing the demand for gas.