The company, an innovator in low carbon heating technology, had hoped that heat batteries would receive VAT relief in the Autumn Budget after significant support from cross-party MPs and key industry stakeholders, but the technology continues to be excluded.
tepeo CEO, Johan du Plessis, said: “It’s with a heavy heart that we’ve had to announce a restructure at tepeo. Until such time that the policy landscape shifts, it’s impossible for new low-carbon technology categories, such as heat batteries, to scale.
“We have always been clear on our mission to decarbonise home heating through our innovative heat battery technology. However, the slower-than-expected expansion of policy and regulatory support has meant we need to make these changes to our business. This will ensure we remain focused on supporting our customers, partners, and broader stakeholders while we secure the policy shifts that are essential for this product category to scale.”
Fortunately, the company has the support of its investors to continue meeting existing demand and serving its customers while it lobbies the government for a more level playing field for highly flexible low-carbon heating.
The company remains hopeful that critical changes will be introduced during the next Budget and the Warm Homes Plan, but they have not materialised in time to prevent the current situation it finds itself in.
A number of organisations and individuals have offered words of support to tepeo.
Heat batteries important to decarbonisation
Tom Lowe, Thermal Storage UK, the trade association for heat batteries and heat flexibility, said: “Electrifying heating in British homes is essential for decarbonising the UK and requires a supportive policy framework to succeed. The Government has an opportunity with the Warm Homes Plan this spring to step up its support for innovative manufacturers such as tepeo, who make highly flexible heat batteries.”
Beverley Gower-Jones, Managing Partner at the Clean Growth Fund, said: “As one of the UK’s leading early-stage investors in ClimateTech, it’s clear to us how important tepeo’s heat battery technology is to the decarbonisation of domestic heating. We remain confident in its potential to revolutionise the way we heat our homes. However, without urgent policy action from the government to derisk the barriers to scale, the industry will not unlock the significant investor appetite to fund growth.”
tepeo also continues to receive strong support from its customer base. Damian Lofthouse, a zero emission boiler (ZEB) owner, said: “Heat pumps benefit from government subsidies, which makes them more affordable. If the ZEB had similar support, it would be a no-brainer for most households.”
He said the upfront cost remains a key barrier and advocates for policy changes to level the playing field for renewable technologies. “Subsidies for the ZEB would unlock its potential to decarbonise more homes, especially for households that might otherwise opt for gas boilers due to cost,” Damian added.
tepeo’s work aligns closely with the UK government’s net-zero ambitions, and the company remains determined to advocate for the policy changes needed to enable widespread adoption of low-carbon heating solutions.
ZEBs can shift up to 95% of energy demand to off-peak times
With a history of successful projects, including the Neat Heat Trial, partnerships with leading energy suppliers, and recognition of heat batteries through the Warm Homes: Social Housing Fund, tepeo says its commitment to delivering reliable, sustainable heating solutions remains steadfast.
The 18-month Neat Heat trial, led by UK Power Networks in partnership with OVO and tepeo, demonstrated that tepeo’s ZEBs can shift up to 95% of peak energy demand to off-peak times, easing pressure on the grid, while significantly reducing carbon emissions.
Image credit: tepeo