Mark Wakeford is Chairman of EvoEnergy, Strategy Director of the Global Solar Council, Chair of the West Midlands Solar Taskforce and host of The Building Podcast. This article draws on his conversation with Nigel Banks, Technical Director at Octopus Energy, the UK’s largest domestic energy supplier, where he leads partnerships with housebuilders, housing associations and build-to-rent funds.
At EvoEnergy, most of my working life is spent helping businesses generate and store their own power. But the commercial market doesn’t exist in isolation. What happens in 30 million British homes shapes grid prices, network capacity and the pace of the whole energy transition.
That’s why, for episode 41 of The Building Podcast, I turned to residential electricity supply and invited Nigel Banks, Technical Director at Octopus Energy, to explain how the UK’s largest domestic supplier copes with a simple but stubborn problem: wind and sun are variable, and so are the people using the electricity they produce.
I first met Nigel at a conference where he showed just how sophisticated the residential market has become. Our conversation confirmed what I suspected then. Matching supply with demand in the home is no longer a technical puzzle. It is a question of economics, trust and customer experience.
Key takeaways
- Timing now matters as much as volume. On a renewables-led grid, when a household uses electricity can affect its bill as much as how much it uses.
- The supplier, not the customer, should do the hard work. Smart tariffs and automated control of batteries, EVs and heat pumps shift demand without asking people to change how they live.
- Zero-bills homes are already here. Octopus guarantees no home energy bills for 10 years on qualifying new builds, and Santander now factors that into mortgage affordability.
- The Future Homes Standard is an opportunity, not just a cost. Housebuilders who package solar, batteries and heat pumps well can differentiate against existing housing stock.
- Energy security is overtaking green credentials as the reason homes and businesses invest in solar and battery storage.
Why is residential electricity supply getting harder to balance?
Because the UK grid has fundamentally changed shape. Nigel reminded me that in 2012, around 40% of our electricity came from coal. Today, roughly 40–50% comes from renewables, and the system is heading towards 80–90%.
We have moved from a centralised system of large, controllable power stations to a decentralised, variable one. The upside is enormous: wind and solar have no fuel costs, so running costs are far lower. The downside is variability. Long windy spells can send prices crashing for days at a time, while still, grey winter days (what the Germans call Dunkelflaute) mean firing up gas plants that have been sitting idle.
Managing that variability is the central challenge for residential electricity supply, and it is where the home is becoming part of the solution rather than part of the problem.
When you use electricity now matters as much as how much you use?
Nigel framed household bills around three levers:
- How much energy you use (consumption)
- How efficiently you convert it into the service you want (a heat pump versus a gas boiler, an EV versus a petrol car)
- What each unit costs (and that cost varies hugely through the day)
The third lever is the one most people haven’t grasped yet. According to Nigel, between 4pm and 7pm the wholesale price of electricity often sits around 40–50p per kWh, roughly double what households pay. In the afternoon and overnight, it can be half. Most customers pay a flat average rate, so they never see that difference, let alone benefit from it.
That has big implications for how we think about efficient homes. Nigel pointed out that a typical new-build, EPC A-rated home only has a bill around 10–15% lower than an existing home. Better insulation reduces heating demand, but heating is only about a fifth of a new build’s consumption. Hot water, appliances and everyday electricity use remain.
Insulation alone gets you a 10% saving. Generating your own power and shifting when you use it can take the bill to zero.
Octopus is already using this at scale. When the grid has too much power, customers are told electricity is free for an hour. When the grid is constrained, customers are paid to turn down, and all they need is a smart meter. Nigel told me close to a million customers now take part. During the recent solar eclipse, customers were asked to reduce demand as solar output dipped, and they were rewarded with free power at the weekend.
Who should manage the complexity: the customer or the supplier?
This was the question I was most keen to ask. We’ve been running EvoEnergy for 15 or 16 years, and for the first seven or eight of those years, most of our effort went into educating customers. I wanted to know whether Octopus faced the same uphill battle.
Nigel’s answer was that the customer base splits in two. At one end, there are enthusiastic engineers who want to programme their own batteries, build their own software against Octopus’s open APIs and squeeze out every penny. At the other end is the mass market, which has no interest in how it works. Those customers want lower bills, simplicity and things that just work.
Trust is everything here. If someone wakes up and their car isn’t charged, or there’s no hot water for the shower, they’ll switch the smart features off. So Octopus has designed its approach to run quietly in the background:
- Batteries: In a Zero Bills home, the customer simply keeps the battery connected and Octopus decides when to charge and discharge it.
- Heat pumps: Research with the Centre for Net Zero found customers are happy for their home to be gently pre-warmed in the afternoon and cool by half a degree over a two-hour peak. Nobody notices. But overheat the house at 4am and you’ll wake them up, so there are limits.
- Simple controls: Instead of a complicated thermostat, the Octopus heat pump has a boost button. Feeling cold? Press it. Need to charge the car before going out again? Press boost.
I think this is the most important lesson for the whole sector. Rather than asking the public to work out when to run the dishwasher, the supplier takes on the job of matching demand to generation. That makes a far more manageable, flexible network possible.
Nigel also described a culture of rapid iteration: trialling three or four approaches with the first 10,000 customers, seeing what works, then rolling it out to millions. That only works if customers trust you to fix things quickly when they go wrong, and he was candid that early smart meters, particularly in stone-walled homes, didn’t always live up to their name.
How do smart tariffs work with home technology?
Octopus has designed its tariffs around the hardware in the home. The examples Nigel shared show how far residential electricity supply has moved from the single flat rate:
| Tariff |
Who it's for |
How it works |
| Zero Bills |
Buyers of qualifying
new-build homes
|
No home energy bills for 10 years,
subject to a fair use limit.
EV charging is billed separately.
Octopus controls the battery.
|
| Tenant Power |
Housing associations
and their tenants
|
Tenants get 30% off electricity
all year; landlords earn a revenue
stream from the solar and battery
systems they install.
|
| Agile |
Engaged customers
|
Tracks the half-hourly wholesale
price. On windy days prices can
go negative, meaning customers
are paid to use energy.
|
| Vehicle-to-grid tariff |
EV drivers with
bidirectional charging
|
The car powers the home during
expensive peaks and recharges
cheaply overnight. Nigel said
this can allow around 10,000 miles
a year of free driving.
|
Tenant Power is a good example of solving the real barrier. Housing associations would happily give every tenant zero bills, but they don’t have the capital. Sharing the benefit between landlord and tenant makes the economics work. As Nigel put it, the technology is now mature. The challenges are economic, political and financial.
Are batteries and electric vehicles the answer to variable supply?
They are a large part of it. Battery costs have fallen dramatically in recent years, and confidence in cycle life has improved enormously, so adding storage to solar is now financially attractive.
The EV opportunity is even bigger. Nigel noted that a typical EV battery is three or four times the size of a large home battery, and most cars spend most of their time parked. Octopus already controls something in the region of 2GW of EV charging overnight. That’s comparable to a large nuclear power station that can be turned up and down to suit the grid.
Most of that flexibility is currently one-way: smart charging that speeds up or slows down. But vehicle-to-grid hardware costs have dropped sharply, and more V2G-capable cars are arriving from Chinese and European manufacturers. Nigel expects bidirectional charging to grow quickly over the next few years, often bundled into vehicle leases.
I did joke with him that, as an employer, I could picture everyone charging up at our offices all day and then running their homes on it overnight. We do have solar panels on our roof, just not quite enough for the whole car park.
Why are UK electricity prices still so high?
Nigel gave a clear explanation. Electricity demand in the UK has been falling for nearly a decade, but the fixed costs of the system have not. Those costs are spread across fewer kWh, which pushes unit prices up. At the same time, gas plants set the marginal wholesale price the vast majority of the time. Nigel estimated it was around 97–98% of the time last year.
Two things should change that:
- Electrification. As heat, transport and data centres move onto electricity, total consumption rises and fixed costs are diluted.
- Using renewable output more wisely. Nigel estimated that around £1.5 billion worth of energy was wasted last year because wind farms in Scotland had to be switched off while gas plants in the south were turned up. Flexible demand in homes, and more storage, helps capture that energy instead.
He also observed that the UK will be wind-led rather than solar-led. Markets like Australia, Spain and California see prices fall to zero or below on sunny afternoons (the famous “duck curve”). In the UK, offshore wind could drive very low prices for extended periods, provided we can use that power when it’s available.
Why is the UK leading the world in smart residential energy?
This surprised me, and I suspect it will surprise many listeners. The UK doesn’t have the fastest-decarbonising grid or the highest renewable penetration. Yet Octopus hosts visitors from around the world and works with partners in China, the Middle East, America, Australia and Africa.
Nigel attributes it to a combination of factors arriving at the same time:
- A deregulated retail market that let innovative suppliers enter around a decade ago
- Rapid growth in variable renewables, creating a real need for flexibility
- A market structure that supported dynamic tariffs early
- Smart meter rollout: by contrast, he said Germany has around 3% smart meter penetration and nearly 900 distribution network operators, which severely limits smart tariffs
He also credited a mindset shift. Many countries have treated flexibility purely as a grid-scale problem to be solved with large batteries acting like traditional power stations. Octopus focused instead on the flexibility already sitting in customers’ homes, and found that customers were happy to have their equipment smart-controlled, provided it worked in their interest.
This matters for my work with the Global Solar Council, which promoted this episode. The Council aims to see 300 million homes with solar by 2030, up from around 70–80 million today. Demonstrating that the technology works is crucial, but so is showing other governments that an open market, smart meters and supportive regulation are what allow companies like Octopus to deliver. And the momentum is real: when I interviewed the head of Australia’s trade federation, he told me 5% of Australian homes had a battery fitted last year. Nigel pointed to Pakistan’s rapid rooftop solar growth and to Aleppo, where rooftops are covered in panels because grid power is scarce and expensive.
As Nigel said, if we can make zero bills work in Scotland, making solar work in Africa is far more straightforward.
What does this mean for housebuilders?
The Building Podcast reaches a great many housebuilders through the National Federation of Builders, so I asked Nigel what a builder of a 50- or 60-unit development should do.
The context is the Future Homes Standard. It comes into force on 24 March 2027, with a 12-month transition, so from March 2028 new homes will need on-site renewables such as solar and low-carbon heating like heat pumps rather than gas boilers. Many builders see that as a cost burden in an already difficult sales market.
Nigel sees it differently. The equipment you’re required to fit is most of the way to a zero-bills home. Add a battery, perhaps a little more solar, and you have a powerful consumer proposition. In his words, you might add £5,000 to the build cost but create £10,000 more in sales value, and differentiate your homes against the existing stock that is your real competition.
One unexpected finding from Zero Bills sites is the number of downsizers moving in: retirees leaving larger homes for something smaller with no mortgage and no energy bills, then telling their friends.
His practical advice:
- Engage early and try five or ten homes on a site before committing a whole development.
- Get the DNO application right at the start, and set up connectivity properly. That’s what has tripped up first-time installs, not the technology.
- Consider optional extras. Home batteries and smart EV charging can be sold as upgrades, which fits the traditional new-homes sales model and reduces upfront risk.
Mortgages are catching up
The affordability barrier is also starting to fall. In July 2026, Octopus and Santander launched a mortgage that takes the Zero Bills guarantee into account in affordability assessments. Nigel estimated that over a 25-year mortgage this could mean £20,000–£30,000 of extra borrowing capacity. For first-time buyers in particular, that is significant.
It reminded me of Energy World in Milton Keynes in the mid-1980s. We built the second most energy-efficient house on the site. It cost £3,000 more than the equivalent standard home, and back then that premium was a real blocker for buyers. Decades later, the homes we built in that era are popular precisely because of their low running costs. The value was always there. We just couldn’t monetise it at the point of sale. Mortgages that recognise running costs change that.
Nigel made a point I think every housebuilder should remember: zero bills is a much more attractive proposition than zero carbon. Most of us in the industry care about carbon. Most buyers care about cost. The same technology delivers both.
The retrofit challenge
New homes are only a small part of the picture, as roughly half a percent of the housing stock is replaced each year. Nigel noted that over a million homes have been built with gas since the original zero carbon homes policy was dropped, and another million may follow before the Future Homes Standard bites. All of those will need retrofitting.
For existing homes, electrification (heat pumps and EVs) delivers the decarbonisation, while solar and batteries deliver the best financial return. Combining all three achieves both. And just as new homes helped make double glazing the norm, Nigel hopes they’ll make solar, batteries and heat pumps an expectation rather than an upgrade.
The same logic applies to business energy
Towards the end of our conversation, Nigel made a point that sits at the heart of what we do at EvoEnergy. For both homes and businesses, the big opportunity of solar and battery systems is taking control of your energy costs. Instead of buying all your power at whatever price the market dictates, you generate and store perhaps 30–50% of it yourself, at a cost you know upfront and spread over time.
That reduces exposure to volatility. And as Nigel observed, energy security is now probably as strong a driver of interest as environmental concerns, perhaps stronger. Ironically, that may accelerate renewable adoption faster than the green argument ever did.
If you run a commercial site and want to understand what on-site solar and battery storage could do for your energy costs and resilience, talk to the EvoEnergy team.
Will the UK reach net zero?
I closed with the difficult question. Nigel’s answer was optimistic but realistic.
Technically, net zero is very achievable. All the technologies exist at a cost that makes sense. The challenge is speed. Nigel believes we could reach a 95%+ clean electricity system within five or six years. From there, he hopes we can replace the vicious cycle of falling consumption and rising costs with a virtuous one, where more electrification lowers costs and makes electrification the obvious choice for more of the economy.
These transitions tend to follow an S-curve: slow to start, then faster than anyone expects once a tipping point is reached. The biggest hurdle, in Nigel’s view, is heat pump adoption, largely because of doubts over whether they work. The answer is more positive customer experiences, and he sees cooling as a potential accelerator as heatwaves become more common.
I share his optimism. Through my involvement with construction colleges, I see talented young people entering this industry, and as Nigel said, there are fantastic careers to be had in energy and construction. We have every reason to be positive. We just have a lot of convincing still to do.
What struck me most from this conversation is that the future of residential electricity supply isn’t about asking people to sacrifice comfort or convenience. It’s about making the cheaper, greener option the better one too. When those three line up, adoption takes care of itself.
Frequently asked questions
What is residential electricity supply?
Residential electricity supply is the provision of electricity to households by licensed energy suppliers. In the UK, it is increasingly shaped by variable renewable generation, smart meters and time-of-use tariffs that reward households for using electricity when it’s cheapest and most plentiful.
How do renewables affect household electricity bills?
Wind and solar have no fuel costs, which lowers the cost of generation, but their output varies. That makes wholesale prices swing through the day, with evening peaks often costing around double what households pay on a flat rate. Smart tariffs let households benefit by shifting demand to cheaper periods.
What is a Zero Bills home?
A Zero Bills home is a new-build property fitted with solar panels, a home battery and a heat pump to an Octopus Energy specification. On the Zero Bills tariff, the homeowner pays no home energy bills for 10 years, subject to a fair use limit. EV charging is billed separately.
What is vehicle-to-grid (V2G) charging?
Vehicle-to-grid charging lets an electric vehicle send power back to the home or grid as well as draw from it. The car can power the home during expensive evening peaks and recharge overnight when electricity is cheaper.
When does the Future Homes Standard come into force?
The Future Homes Standard comes into force in England on 24 March 2027, with a 12-month transitional period. From 24 March 2028, all new homes must comply, which in practice means on-site renewables such as solar panels and low-carbon heating instead of gas boilers.
About the Author
Mark Wakeford is Chairman of EvoEnergy bringing decades of experience across engineering, construction and renewable energy. He plays a key role in shaping EvoEnergy’s long-term strategy while contributing to the wider development of the UK solar industry, with particular focus on skills, supply chain resilience, industry standards and the transition to net zero.
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