Europe is diverse, both in terms of geography and in terms of culture. And the solutions for the energy transition in the various European countries are just as diverse. The smarter E Europe regards this diversity to be an opportunity to learn from each other and to make the energy transition happen even faster and more efficient in each of the countries. This series of articles presents innovative and successful projects from across Europe that show how a renewable 24/7 energy supply can work. The case studies should provide impulses and inspiration, turning “does not work” into “already exists”.
In the UK, since 2023, Octopus Energy has been offering an electricity tariff called Zero Bills for homes equipped with solar panels, a battery storage system and a heat pump. Customers are guaranteed not to pay for their energy usage – not even a basic fee. The project was launched in England, where smart power meters are already much more common than they are in Germany. But some projects have emerged here recently, too.
Octopus Energy decides on a case-by-case basis whether a home is eligible. Once a home has been given Zero Bills home standard, the utility company guarantees no energy bills for a least five years.
Homes have to meet a certain energy efficiency standard to become eligible, which is equivalent to the German KfW efficiency class 55 or better. This makes the scheme particularly suitable for new builds – entire housing developments have already been awarded the Zero Bills homes standard.
Houses have to be well insulated and equipped with a PV system that supplies as much electricity as the household – including its heat pump – consumes in the course of a year. The battery storage system must have sufficient capacity for one hour of full load – that is 10 kWh for a 10 kW PV system. The home must also be fitted with advanced metering infrastructure.
Once all of these boxes have been ticked, energy-bill-free living can become a reality. The business model stipulates that Octopus Energy receives a remuneration for any excess electricity produced by the PV system. In return, the energy provider will not bill the home’s power consumption, provided it does not exceed its energy production by more than 2,500 kWh per year. Contracts last a minimum of twelve months, after which time customers are free to change to a different provider if they wish.
Octopus generates earnings by optimizing load flows according to spot market specifications, storing electricity in the battery while the market price is low, and providing the energy later – either within the home or, in some cases, by feeding it back into the grid when market prices have surged.
The company does without feed-in according to the Renewable Energy Sources Act (EEG). Direct marketing of electricity without subsidies means that at times of low spot prices, grid power (gray electricity) can be used to charge the storage device. With such arbitrage transactions, Octopus takes advantage of price fluctuations. The power company also optimizes the operating times of heat pumps, preventing them from drawing grid-supplied electricity while wholesale prices are particularly high.
Zero Bills homes can support grid stability and supply security because they can change their load in response to market signals, and because they can support distribution system operators. This helps prevent grid congestion.
According to Octopus Energy, more than 1,000 homes have already been awarded Zero Bills home status around the world. This number is set to rise to 100,000 homes by 2030. The continued expansion of photovoltaics and wind power leading to strong price fluctuations on the short-term electricity market may make this model even more attractive in the future.