Legal & General takes stake in ground source heat firm as it looks to scale up investments in climate change, positioning for post-crisis environment

Complementing Legal & General’s existing clean energy investment portfolio, which now includes low carbon heat, transport and power generation, the deal follows Legal & General’s increased stake in Pod Point, one of the UK’s largest electric vehicle charging companies, alongside EDF. Investing in sub-scale industries that it can use its platform to grow rapidly in the post-crisis period, the investment in Kensa supports Legal & General’s ambition to form part of the UK solution to reaching net zero carbon emissions by 2050.

Heating and hot water for UK homes make up 25%1 of total energy use and 15%2 of our greenhouse gas emissions. By 2025, the current consultation on new building regulations will likely outlaw fossil fuel heating systems for new build homes, presenting a significant and immediate opportunity for an alternate low carbon heating solution. Retrofit represents a significant market opportunity, with around 23 million homes in Great Britain using mains gas (carbon intensive) as their heating fuel, two million homes electrically heated (high running costs) and the remaining two million using heating oil or other fossil fuel systems (carbon intensive and high running costs).

As the UK’s largest manufacturer and installer of ground source heat pump technology, Kensa is the only integrated supplier and one of the most developed and effective for delivering homes with the lowest operational carbon emissions. Legal & General’s investment in Kensa presents a unique opportunity to partner with a market leader at a time when growth in the sector is accelerating rapidly. Alongside offering an alternative heat solution to existing and new build houses across the UK, this partnership will provide Legal & General’s extensive ecosystem with a low carbon heating solution, as it works with local authorities, government and key industry players to create scaled solutions.

Within Legal & General’s own fast-growing housing platform, which spans build-to-rent, build-to-sell, later living and affordable housing, as well as modular construction, plans are already under way to make all its new housing stock operationally net carbon neutral between now and 2030. As part of this, its later living business, Inspired Villages Group, is in advanced discussions with Kensa to put in place ground source heat and has rolled out Pod Point electric car chargers, amongst other initiatives.

Legal & General’s partnership with Kensa coincides with the completion of a new 900m2 manufacturing premises in Cornwall, which will enable the production of up to 30,000 ground source heat pumps every year.

To view the full press release, please click the link below.

Kensa Group

Established in 1999 and headquartered in Cornwall, the Kensa Group is a fast-growing collection of award-winning businesses involved in the manufacture and installation of ground source heat pumps and the ownership of associated underground infrastructure. Now employing over 100 people the Kensa Group encompasses Kensa Heat Pumps Limited, Kensa Contracting Limited, and Kensa Utilities Limited. Kensa Heat Pumps remains the UK’s only manufacturer of ground source heat pumps and is the long-established market leader according to BSRIA annual reports. It provides products and technical support to an extensive network of plumbing contractors. Kensa Contracting is a specialist installation business which focusses on large-scale new build and social housing retrofit programmes. It benefits from unrivalled experience and expertise and has delivered the UK’s largest installations in the residential sector. Kensa Utilities is an infrastructure asset company which funds, owns and maintains shared ground loops that serve heat pump installations. It utilises subsidy support to provide these assets at zero cost to the housebuilder or social landlord.