Energy companies trial ‘heat-as-a-service’ to drive demand for low-carbon solutions

UK energy companies Bristol Energy and Baxi Heating have completed year-long trials funded by the Department of Business Energy and Industrial Strategy (BEIS) to explore whether offering heat as a service could drive demand for low-carbon heating solutions in the UK's domestic building stock.

Energy companies trial ‘heat-as-a-service’ to drive demand for low-carbon solutions

The trial aimed to uncover whether smart systems could unlock a pathway for low-carbon alternatives

The two energy companies partnered with Energy Systems Catapult to trial Living Labs, whereby 100 homes across Newcastle, Manchester, the West Midlands, Gloucestershire and Bridgend in Wales were fitted with smart heating systems.

The aim of the trial was to garner how the public would interact with the systems, due to many prioritising comfort and cost over whether or not the heat source is low carbon. In response, the companies trialled selling “heat-as-a-service”, offering a “Heat Plan” where consumers purchased ‘hours of warmth’ rather than units of energy (kWh). This enabled the households to schedule and budget for heating and was offered a fixed price based on data about the thermal efficiency of their home and the number of hours of warmth needed by the customer each week.

According to Energy Systems Catapult, the accessibility and ease of the smart heating systems could lead to more willingness amongst the public to adopt low-carbon heating.

Energy Systems Catapult’s consumer insight business lead Dr Matt Lipson said: “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.

“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.”

Net-zero consistency

The UK’s net-zero emissions target for 2050 will require every household to replace their heating system with lower carbon alternatives. It is estimated that this will take more than 1,000 years at the current rate, the Living Labs study claimed. Around 75% of the UK’s current heating demand in buildings is met by natural gas.

Energy Systems Catapult worked with Baxi Heating UK on a smartphone-style contract where a replacement heating system comes as part of a servicing and maintenance bundle alongside the energy required.

For Bristol Energy, Energy Systems Catapult trialled two Heat Plan options for heat and hot water to 85 homes, fixing a price based on existing heating schedule data, or through a pay-as-you-go option.

Energy Systems Catapult also tested the performance of hybrid heating systems that combine traditional gas boilers with an electric heat pump at five homes. The performance of the hybrid systems was trialled to see whether customers could achieve the same levels of comfort using a low-carbon smart system. Heat pumps delivered between 6% and 63% of the heating across the five different homes.

According to the report summarising the trial, manufacturers designing low-carbon heating systems should look to give users better control of their heating to drive uptake.

“Participants said that Heat Services reduced their concerns about installing unfamiliar, low carbon heating systems because they knew they would be able to get the same level of comfort as they could with a gas boiler for a predictable price,” the report said.

“The Heat Plans that people purchased revealed insights into what influenced their willingness to pay for different types of service. This information can provide insight into how much people would be prepared to pay for low-carbon heating that provides a better experience than they currently enjoy.”

Following the trials, when asked if they would consider a low-carbon alternative if their costs and comfort could be assured, 85% of users responded positively.

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Matt Mace

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