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Good Energy is set to be a major beneficiary of Labour’s ‘Warm Homes Plan’

It’s difficult to think of a UK-listed company better placed to enjoy the policies of a Labour government than green energy microgeneration specialist Good Energy. 

Good Energy has made the transition to a full-service, end-to-end green energy services provider for UK households, helping them improve fuel efficiency and reduce their carbon footprint with heat pumps, solar panels, battery storage and EV charging points.

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Under the Conservative government, Good Energy were largely limited to conscientious homeowners with readily available capital to take on the cost of installing power generation such as heat pumps and solar panels.

A Labour government and additional support for households to improve the green credentials of their properties will open up an entirely new section of the market for Good Energy. The market is currently underestimating this. 

In their manifesto, Labour set out its ‘Warm homes plan’ promising to help slash heating bills and reduce the UK’s reliance on overseas sources of fossil fuels. Labour says its will double the Tories commitment to improving household energy efficiencies by investing an additional £6.6bn.

This is a substantial sum earmarked for cutting power bills for five million homes. These are five million homes that have the potential to be Good Energy’s customers over the next parliament.

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Although the details about Labour’s plans are scant, it did say in its manifesto it would facilitate low cost loans and grants to help households improve fuel efficiencies through the use of solar panels and batteries.

The Conservative government had targeted 600,000 heat pump installations per year by 2028. One would expect Labour to ensure they supercede this figure. This would be great news for Good Energy shareholders after the company acquired a specialist solar and heat pump installation company at the beginning of 2024.

Good Energy focuses on the premium end of the heat pump market, catering to homes requiring more complex installations. This area of the market commands installations 7.5% larger than the top 200 UK installation companies, providing Good Energy with margins of 25% to 30%.

In its recent full-year results, Good Energy said the ‘solar sector is booming’. Nothing suggests this boom will end anytime soon and everything points to the number of Good Energy’s solar customers increasing from the current 180,000.

EVs

Although Labour have been relatively quiet about electric vehicles, a truly green policy agenda targeting net zero goals can’t be achieved without support for the adoption of EVs. One would expect this to come later in the parliament.

When it does come, Good Energy’s investment in Zapmap, the UK’s largest EV charging point mapping app, will look very sensible indeed. Zapmap has a 70% share of the UK market EV users and has a diverse model that allows drivers to book and pay for EV charging points while providing Zapmap crucial data that can be provided to the wider market.

In addition, as part of their end-to-end clean energy service expansion, recent acquisitions bolster Good Energy’s capabilities in the EV charging installation arena.

Good Energy has set out a growth plan that will likely succeed in any political environment. A Labour government will accelerate these plans.

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