Background
On 7 April 2025, the Advertising Codes were updated to reflect the revocation and restatement of the Consumer Protection from Unfair Trading Regulations 2008 (CPRs – the legislation from which the majority of the CAP and BCAP rules on misleading advertising derived) by the Unfair Commercial Practices provisions in the Digital Markets, Competition and Consumers Act 2024 (DMCCA). On that date, the wording of a number of the rules in the Advertising Codes was changed to reflect relevant changes introduced by the DMCCA on 6 April 2025.
Given that the complaints that formed the subject of this ruling was received before 7 April 2025, the ASA considered the ads and complaints under the wording of the rules that existed prior to 7 April 2025, and the Ruling (and references to rules within it) should therefore be read in line with this wording, available here – CAP Code and BCAP Code.
Summary of Council decision:
Two issues were investigated, both of which were Upheld.
Ad description
A paid-for Facebook ad for Octopus Energy, seen on 14 September 2024, included the claims “Installs from £500”and “Heat Pump & Install From As Little As £500. The government grant covers up to 90% of the costs of a new heat pump. Replace your old broken boiler with an award winning energy supplier and help stop our reliance on gas”.
Issue
The ASA received two complaints, including from the Energy and Utilities Alliance, who challenged whether:
- the claim “Installs from £500” could be substantiated; and
- the ad omitted material information.
Response
1. Octopus Energy Ltd explained that the claim was based on what their customers would pay, rather than the industry average cost of heat pumps. In their view consumers would understand the claim had been calculated with reference to the cost of their heat pumps, rather than those from other sources. Their data collection methodology appeared on the landing page linked from the ad.
They said their pricing model was complex and pulled data from many sources including data available for a property’s Energy Performance Certificate (EPC), for example property type, total floor area, and property features; energy consumption and patterns, taken from their own customer data; and a sophisticated machine learning model based on tens of thousands of data points from previous home surveys and installations of similar house types they had conducted. The most relevant drivers of heat pump pricing were the heating and hot water requirements (measured in kilowatt-hours) and the floor area of a property, which was extracted from customer’s EPCs. That was more reliable than housing type for the predictive model. The claim “from £500” was based on Octopus Energy ensuring that at least 10%, and as many as 15%, of houses in the UK that had been run through the model had the characteristics or criteria to be eligible for a £500 installation (post-Boiler Upgrade Scheme (BUS) government funding) based on their costs. They only provided quotes to eligible households.
Those eligible homes fell into several categories – newer homes; smaller homes; better insulated homes; homes with low energy usage; and homes that required few changes to make the switch to a heat pump, for example, a radiator swap. They said 87% of their quotes were below the national post-BUS funding average of £5,321. They provided sales data from April 2024 to January 2025 that showed 13.9% of consumers who purchased a heat pump through Octopus Energy paid £500 or less. In those cases, the total cost of installing a heat pump was £8,000, which when the £7,500 BUS funding was deducted, gave a final cost of £500. They had not included sales data from the relevant period that pertained to the installation of heat pumps under the ECO4 government grant scheme – which was aimed at providing free and discounted heating to low-income and vulnerable households – since that would have artificially inflated the proportion of installs priced below £500.
2. Octopus Energy said they had targeted the ad at consumers in their installation coverage area, which accounted for around 86% of postcode districts. It had also been targeted at consumers who had searched for keywords including “heat pump” and “air source heat pump”.
They explained that heat pumps were currently subsidised through the government’s BUS funding, they only undertook installations that met the BUS funding eligibility criteria, and they had installed several heat pumps for free. They explained that the BUS funding was subject to government funding allocations, and that the BUS scheme would receive further investment in 2025. That meant BUS grant allocation and the number of heat pump units available under the scheme would be extended for that year.
The landing page, which was one click away from the ad, took consumers through a quote-generating process that included questions to identify whether a customer’s house was eligible for the grant. It drew on elements of the complexity about their house such as age, how it was built, the type and amount of insulation, the condition of existing wiring and pipework, and how accessible that wiring and pipework was to engineers who would potentially install a heat pump. Those who did not meet the eligibility criteria were not provided with a quote and were provided with an explanation and the ability to request more information. If eligibility was disputed once a quote had been generated, they would honour the quoted price. Octopus said the nature of the eligibility criteria for the BUS government funding was such that there would be limited scenarios where a consumer would not be eligible.
The page also included links to educational content to help consumers understand more about heat pumps and the installation process. There was also frequently asked questions (FAQ) information that included reference to the “from £500” claim. They said the ad was limited by space such that they would not be able to include that information, which could give a misleading impression, and had instead included a “Learn More” button in the ad. There was information on the page that the claimed price of £500 reflected a net cost after applying for the BUS funding, which was determined during the eligibility assessment stage. Potential further costs – which could include planning permission, structural surveys, and any site preparation works – were highlighted in the sign-up journey. Their terms and conditions made clear the quotes were based on standard installations.
They referred to a consumer opinion survey they had commissioned from a third party, after receiving notification of the complaints from the ASA, to see what people understood from the claim. They said the key outcome was that the majority (58%) of respondents understood that the cost of having a heat pump installed by Octopus Energy could be as low as £500 with help from government funding.
Assessment
1. Upheld
The CAP Code stated before distributing or submitting a marketing communication for publication, marketers must hold documentary evidence to prove claims that consumers were likely to regard as objective and that were capable of objective substantiation. It additionally required that price claims such as “from” must not exaggerate the availability or amount of benefits likely to be obtained by the consumer. The Competition and Markets Authority guidance ‘Marketing green heating and insulation products: Consumer law compliance advice for businesses’ (the CMA Guidance) stated that “from” prices should reflect what a significant proportion of consumers were likely to pay for the advertised product. We had regard to the guidance in assessing the ad against the CAP Code.
The ASA considered consumers would understand the claim “Installs from £500”, in the context of the ad, to mean that a significant proportion of consumers could purchase a heat pump and have it installed by Octopus Energy for £500.
We first assessed the sales data provided. It showed that at the time the ad appeared, in September 2024, 5.8% of heat pump sales had been made at or below the price claimed in the ad. In the preceding months for which Octopus Energy held data, less than 5.8% of sales made had been at or below the claimed price. The data showed that for the final two months of 2024 the proportion of heat pumps sold at or below £500 stood between 23% and 24%. However, the data did not show that a significant proportion of sales, at the time the ad appeared, were at the claimed price of £500. We therefore considered the price did not reflect what a significant proportion of consumers were likely to pay at the time the ad appeared.
We understood Octopus had used a predictive model to underpin the claim made in the ad. They had input details from tens of thousands of surveys they had carried out on homes assessed for heat pump installation, along with data they had pulled from recent, available EPCs into a predictive model. The model covered homes of different sizes, insulation levels and with different degrees of change needed to switch to a heat pump.
Using the model, Octopus Energy had established that 10% of UK homes could achieve the claimed price of £500 for a heat pump and installation. However, we understood that not all UK homes were eligible for the BUS government funding upon which that price relied. We considered that, and the fact the Octopus Energy model included only quotes provided to houses that would qualify for the funding, reduced the proportion of consumers who could achieve the claimed, inclusive price.
We had not seen sufficiently robust evidence that a significant proportion of consumers to whom the ad was targeted could purchase a heat pump and have it installed by Octopus Energy for £500. We therefore concluded the ad was likely to mislead.
On that point, the ad breached CAP Code (Edition 12) rules 3.1, (Misleading advertising), 3.7 (Substantiation), and 3.22 (Prices).
2. Upheld
The CAP Code required that price statements must not mislead by omission. The CMA guidance further stated that ads were likely to mislead if they included the value of any government funding in a headline price where that funding was subject to specific, or strict, eligibility criteria and was not available to most consumers to which the advertising was directed. If the value of government funding was included in a headline price, that should be stated clearly and prominently next to the headline price, along with the amount of the funding included, and that there were eligibility criteria. We had regard to the guidance for assessing the ad as to whether it had complied with the CAP Code.
We understood the ad had been targeted at people in postcode districts within Octopus Energy’s installation area, which would include non-homeowners, and specifically those who had made keyword searches for “heat pump” and “air source heat pump”. The ad stated “Install From As Little As £500” and “The government grant covers up to 90% of the costs of a new heat pump”. While the ad referred to an unspecified “government grant” (which would be understood as referring to government funding), it did not include information to explain the claimed “from” price included the funding, its value, nor that eligibility criteria had to be satisfied in order to receive it. In the absence of that information, the ad gave the impression that government funding was available to all consumers to whom the ad was targeted, and the cost of a new heat pump from Octopus Energy, including all of the costs necessary for its installation, could be as little as £500. We considered the ad was ambiguous as to whether the price shown was the remaining 10% payable once the other 90% had been deducted by way of government funding. We considered the consumer survey provided by Octopus Energy showed a significant proportion (14%) of those surveyed understood the claim as meaning that the cost of getting a heat pump installed could be as low as £500.
The government funding referred to in the ad was the BUS grant. There were several eligibility criteria that consumers needed to satisfy to qualify for the funding, including that the applicant must be a homeowner of a house with a valid EPC, replacing an existing fossil fuel heating system, and only receiving funding from one source of public funds. If eligible for the funding, consumers would receive £7,500 toward the cost of an air source heat pump and installation, plus other costs such as a hot water cylinder, any necessary radiators, delivery and labour, and plumbing and electrical works. We understood further costs that might be incurred included planning permission, structural surveys, and any site preparation works. Quotes provided by Octopus Energy covered the former set of costs, but not the latter.
The ad did not state the funding was subject to eligibility criteria. While we understood eligibility criteria for the funding were stipulated on a landing page, one click away from the ad, we considered that the fact the funding was subject to meeting specific criteria was material information that was likely to affect consumers’ understanding of the ad’s overall message. This information was therefore required to be stated in the ad, so that consumers could proceed further into the consumer journey of obtaining a quote for a heat pump installation with Octopus Energy in an informed manner. We further considered the ad was not limited by time or space to such an extent that the information could not be provided. Information about the BUS grant and its eligibility criteria was included at the bottom of the landing page, across several frequently asked questions (FAQ) sections. Consumers did not need to read all of the information on the page in order to proceed through the process of having a heat pump installed at their property. The ad also did not state that installation was subject to a suitability survey, conducted by Octopus Energy, and that preparatory costs, referenced above, might apply to some consumers, and that those costs were not included in quotes generated by Octopus Energy.
We considered that was material information that should have been included. Because the ad omitted material information, we concluded it was likely to mislead.
On that point, the ad breached CAP Code (Edition 12) rules 3.1, 3.3 (Misleading advertising) and 3.17 (Prices).
Action
The ad must not appear again in the form complained of. We told Octopus Energy Ltd to ensure that suitably robust evidence was held to demonstrate that any claimed ‘from’ price could be achieved by a significant proportion of consumers. We further told them to ensure ads making price claims for heat pump installation included all material information, including clarification of any government grant included in the advertised price, and the existence of eligibility criteria.
