British Gas, owned by Centrica PLC (LSE:CNA), has ramped up the price war for heat pumps, cutting the price of the green boiler alternatives by thousands.
Despite an market prices said to average £8,000 and range up to £17,000, British Gas said it will charge £2,999 for heat pumps in England and Wales, or £499 in Scotland due to a higher government grant.
It also claimed to be operating a heat pump price-match scheme.
This follows Octopus Energy, which in November cut the costs of its heat pumps to £3,000 as part of a pilot scheme with Lloyds Banking Group PLC (LSE:LLOY), with customers of the lender's Halifax arm getting a heat pump for £2,000.
Heat pumps work by compressing air to heat it up and then circulating it through buildings, ultimately providing a greener alternative to boilers.
Octopus said the heating systems use four times less energy than gas boilers and can cut a household’s carbon footprint by up to 73%
The government has set a target for 600,000 heat pumps to be installed in the UK by 2028 as part of its net-zero strategy, offering a £5,000 grant for the pumps in England and Wales, while in Scotland this can be as high as £7,500.
Trade body Energy and Utilities Alliance (EUA) warned that targets for rolling out heat pumps are unrealistic however, suggesting that thousands more engineers will be needed for these to be met.
With there being an estimated 3,000 engineers in 2022, the EUA said this figure would have to climb to close to 140,000 by 2028 for government targets to be met, also outlining the costs for switching rural households from oil systems could exceed £10,000 each.
The EUA has previously suggested a mixed rollout of hydrogen ready boilers and heat pumps will be needed, ahead of proposed plans to introduce a hydrogen-blend into the UK's gas supply.