OVO Energy’s decision to withdraw its Heat Pump Plus tariff from February 2026 has unsettled a group of customers who believed they had finally been offered something rare in the UK energy market: a simple, transparent way to run a heat pump at a predictable cost. The tariff’s removal matters less for what it was than for what its disappearance exposes about the economics of electrifying heat.
Heat Pump Plus was not a time-of-use product, nor did it rely on OVO remotely controlling customers’ homes. Instead, customers paid their normal electricity rate and received a monthly rebate that effectively reduced the cost of electricity used by the heat pump to 15p per kilowatt hour. In practice, this meant that a household using 300kWh per month for heating would receive roughly £39 back. For many, this was not a marginal saving but a material component of annual running costs.
A comment on my channel (posted on the video above) alerted me to OVO’s accounting, and what I found is deeply troubling for anyone who believes this industry should be building trust.
In 2022, OVO Energy paid £40 million in licensing and “management service” fees to another company, OVO Group Ltd. Both are owned by Stephen Fitzpatrick.
That same year, OVO Energy reported a pre-tax loss of £5 million. Let that sink in. A £40 million internal payment helps create a picture of a supply business on the brink, while moving substantial value elsewhere.
This, I must point out, perfectly legal practice of intra-group licensing dramatically reduces the UK supply arm’s reported profit. And lower profits mean a lower UK corporation tax bill.
At a time when household bills have been crippling, the revelation that a major supplier is using such aggressive intra-group financial engineering to minimise its UK tax contribution is a terrible look.
MPs have rightly called it unfair.
So, when this same company withdraws a key heat pump tariff (a product designed to support a crucial national net zero infrastructure shift) citing commercial viability, we have to ask: viable for whom? Where are the priorities?
The optics are not good! It creates a perception, whether intended or not, that the focus is on extracting value from the UK market through complex corporate structures, not on reinvesting to support the customer base through the energy transition.
Defenders will say it’s standard practice and audited. But in a climate of broken consumer trust and a desperate need for honest investment in decarbonisation, “standard practice” isn’t good enough.
Pulling support for green tariffs while engaging in such tax-efficient financial engineering sends a clear, disappointing message about where the real value is flowing.
The industry must be better than this if we are to have any hope of persuading customers and policymakers that we are genuine partners in the transition.
