Two British energy firms trial heat-as-a-service to drive net-zero
In an industry first, two British companies have successfully trialled selling ‘heat-as-as-service’, in a move that experts believe will pave the way for the low carbon retrofit revolution.
Energy Systems Catapult runs innovation trials in their Living Lab – where 100 homes spread between Newcastle, Manchester, the West Midlands, Gloucestershire and Bridgend in Wales – are fitted with ‘smart heating systems’ that provides room-by-room temperature control and a wealth of data on consumer behaviour and the thermal performance of the home.
Energy Systems Catapult created a heat-as-a-service offering called a ‘Heat Plan’ – where instead of buying units of energy (kWh), consumers buy hours of warmth in their home – called ‘Warm Hours’.
Now two British companies have successfully trialled ‘Heat Plans’ with consumers:
- Baxi Heating UK successfully sold a ‘Heat Plan’ that bundled a new heating system, servicing, maintenance and energy for a fixed monthly price; the price stays fixed no matter what the weather brings, and consumers can see precisely how much it will cost to achieve the comfort they want.
- Bristol Energy became the first energy supplier in the UK to trial selling heat-as-a-service, selling both fixed price and Pay-As-You-Go ‘Heat Plans’ to domestic customers. This is just like a mobile phone bundled with calls, texts and internet data into a single service for a fixed monthly price.
- Energy Systems Catapult also tested the performance of hybrid heating systems that combine traditional gas boilers with an electric heat pump.
Dr. Matt Lipson, consumer insight business lead at Energy Systems Catapult, said: “The UK has a target of achieving net zero emissions by 2050, yet only about 5% of UK homes currently have low carbon heating, compared to 85% with gas boilers. Low carbon heating is simply a step into the unknown for most households. Consumers have concerns about their ability to get warm and comfortable at an affordable price and how to fix the system if it breaks down.
“Yet our research clearly shows that people care more about heating outcomes – such as getting warm and comfortable – than which device or system delivers the heat.
“To overcome this impasse, we developed a Heat-as-a-Service offering called a Heat Plan. Where instead of buying units of energy (kWh), consumers buy hours of warmth in their home. This allows people to schedule and budget for a specific number of ‘Warm Hours’ – giving them the temperatures they want, in the rooms they want, at the times they want – for a fixed weekly or monthly price.
“If people have the peace of mind that heat-as-a-service will deliver the comfort they want at a price they can afford … then when it comes time to replace their gas boiler, they will be more confident of switching to a low carbon heating system like a heat pump, district heat network or hydrogen boiler.
“Now the work we are doing with Bristol Energy and Baxi is taking a leap forward, piloting commercial offers, that could pave the way for low carbon retrofit revolution”.
Jeff House, head of external affairs, Baxi Heating UK, said: “As society continues to adopt service-based offerings in other sectors it is clear that Heat-as-as-Service has the potential to revolutionise the heating industry."
In part this model can help to defer the up-front capital barrier associated with many low carbon heating options, thereby aiding decarbonisation efforts, importantly it also can help to streamline the customer experience when dealing with their heating provision.
Samantha Nicol, head of innovation at Bristol Energy, said: “By working with the Catapult, we’ve gained great insights into consumers’ behaviour and attitudes around how our customers like to heat their homes. We’re continuing to pursue research development in this area with new trial offers coming soon… in our mission to decarbonise heat.”
Trialling hybrid heating systems
The performance of Hybrid Heating Systems (combining a heat pump with an existing gas boiler) was trialled to understand how the system worked with smart controls as part of a Heat Plan and whether consumers could achieve the same comfort levels.
Highlights from the hybrid heating system trial included:
- More than half of households in the Living Lab had never heard of heat pumps
- Heat pumps were installed in 5 of the 100 homes in the Living Lab, creating a hybrid system
- Hybrid heating systems achieved the same temperatures and levels of comfort as the gas boiler
- Heat pumps delivered between 6% and 63% of the heating across the 5 different homes, depending on how each household used their smart controls
- The household utilising the heat pump only 6%of the time increased that figure to 51% with some simple advice on reducing the number of manual overrides to their heating schedule, which would force the boiler to frequently kick-in
- 4 of the 5 homes trialling the hybrid system were open to removing their gas boiler and relying entirely on a heat pump