Craigavon, Northern Ireland As the United Kingdom faces rising temperatures and urgent calls to decarbonise, Octopus Energy has begun mass-producing heat pumps in Northern Ireland, aiming to accelerate the country’s transition away from fossil fuel-based domestic heating. The factory in Craigavon currently outputs 600 units monthly, with plans to double capacity a critical step as the government seeks to install 600,000 heat pumps annually by 2028.
Heat Pumps: A Key to Decarbonising Domestic Heating
The UK government has set ambitious targets to tackle climate change by reducing emissions from home heating, which accounts for nearly a third of the country’s carbon footprint. Heat pumps, which run on electricity and extract heat from the environment, are seen as crucial to this effort. Unlike traditional gas or oil boilers, heat pumps operate with significantly lower emissions when paired with renewable electricity.
Octopus Energy’s Northern Ireland facility, unusual for an energy supplier, is producing heat pumps designed in-house, combining manufacturing innovation with smart technology. “We can have a plug-and-play solution that works in the majority of homes in the UK,” said Aimee Clark, head of commercial at Octopus Energy.
Currently, the plant produces around 600 units a month but expects to ramp production to 1,200 units by activating a second production line, with potential for further increases if consumer demand grows.
Industry Context and Market Challenges
Despite the UK government’s commitment, heat pump uptake remains well below the target. Sales reached just under 100,000 units in 2024, far short of the 600,000 per year benchmark set for 2028. The surge in installations that followed Russia’s invasion of Ukraine and the resulting spike in European gas prices has since slowed.
Paul Kenny, director general of the European Heat Pump Association, noted the cooling demand challenges: “Right now what we have is factories that are at low capacity factors, they’re idle or running well below what they could be running.” This softening demand partly results from declining gas prices, which have eroded heat pumps’ cost-competitiveness compared to traditional boilers.
Northern Ireland, despite having the highest proportion of oil heating systems of any UK region a particularly polluting option does not currently offer widely available grants to ease heat pump installation costs, contrasting with other parts of the UK. TJ Root, Octopus’s Cosy program director, called it “incredibly ironic,” highlighting a disconnect between policy incentives and industry ambitions.
Manufacturing Innovations and Technological Features
The heat pump technology used by Octopus is based on a well-established principle dating back to the 1800s, but the company asserts that its design choices deliver meaningful performance advantages.
A defining feature is a patented internal metal plate through which refrigerant flows, absorbing heat from the system’s electronics and cooling them simultaneously a system that improves overall efficiency, according to Mateusz Dewhurst, Octopus’s director of manufacturing. The units also include cavity wall insulation beads to reduce thermal losses.
Octopus has embedded numerous sensors within the heat pumps to monitor heat and pressure variables continuously. This data enables technicians to intervene proactively if performance declines, maintaining a high coefficient of performance (CoP) a key metric indicating how much heat is produced per unit of electricity consumed, with higher ratios translating into lower running costs.
Homeowners can also track their system’s efficiency through a dedicated smartphone app, enhancing transparency and customer confidence.
Skills Development and Workforce Perspective
The Craigavon factory also serves as a site for workforce development. Patrick Doran, a production line worker, described his experience mastering multiple stages of the assembly process, from pipework to wiring electronics. “It kind of gets harder as you go up it’s like levels in a game,” he said, emphasizing the training opportunities available.
Such skill cultivation is vital as the UK attempts to scale up heat pump installations, requiring a specialist workforce capable of ensuring proper setup and maintenance. Steven Metcalf, a researcher at the University of Warwick, highlighted the importance of installation quality for performance outcomes. “It could be the difference of a CoP of 2.5 versus 4 your bills will scale with that,” he said. “It can be a huge penalty for getting a bad install.”
Broader Implications and Future Outlook
The expansion of domestic heat pump manufacturing aligns with the UK’s broader energy transition goals, including reducing reliance on fossil fuels and enhancing energy security amid geopolitical uncertainties. Heat pumps present an opportunity to harness increasingly clean electricity supplies for heating, contributing to net zero ambitions.
However, meeting the 2028 target will require overcoming economic, policy, and consumer acceptance hurdles. Public confidence depends not only on technology reliability but also on financial viability and streamlined installation processes, experts say. Countries like Norway demonstrate successful public adoption under colder climate conditions, offering potential lessons for the UK.
Government policy remains a critical factor. Consistent subsidies and carbon pricing mechanisms could incentivize greater uptake, helping manufacturers like Octopus operate production lines at full capacity.
In the meantime, Octopus Energy’s initiative represents a significant step, combining in-house product development, integrated smart monitoring, and local manufacturing. As temperatures rise and the climate crisis intensifies, such efforts will be essential to decarbonising UK homes and meeting international climate commitments.
About the Author:
Chris Baraniuk is a technology reporter focusing on renewable energy and climate-related innovation. This report is based on an exclusive visit to Octopus Energy’s heat pump manufacturing plant in Craigavon, Northern Ireland.
Keywords: UK heat pumps, domestic heating, decarbonisation, Octopus Energy, renewable energy, climate change, green technology, energy transition, heat pump manufacturing, Northern Ireland, energy policy, government targets
Pour une analyse plus détaillée et une couverture continue des marchés du travail américains, des politiques commerciales, du gouvernement, des finances et des marchés britanniques, restez à l'écoute de PGN Business Insider.
