Two British energy firms have successfully trailled a new 'heat-as-a-service' approach to heating homes, based on smart heating systems that charge consumers per hour of warmth rather than unit of energy.
The trials, run by the Baxi Heating and Bristol Energy, were coordinated by the governmen-backed Energy Systems Catapult. It ran the trials in 100 homes across Newcastle, Manchester, the West Midlands, Gloucestershire, and Bridgend, where it fitted smart heating systems providing room by room temperature control and a wealth of data on consumer behaviour and the thermal performance of the home.
Baxi Heating trialled mobile phone-style bundles combining heating system and energy bills for a fixed monthly price in 20 of the homes. Labelling them 'Heat Plans', Baxi bundled together a heating device with servicing, maintenance, and energy.
Of the 20 homes on the trial, 13 said they wanted to discuss the offer, 10 that they liked it and were enthusiastic about continuing, and one - the only one of the 20 who had an old inefficient boiler ready to be replaced - accepted the offer and installed a new boiler.
"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," said Jeff House, head of external affairs at Baxi Heating UK. "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."
Bristol Energy took a slightly different approach, designing two 'Heat Plan' options, one for heat and one for hot water. One was priced for a fixed number of 'Warm Hours' based on their existing heating schedule, while the other was a Pay As You Go option with a price per 'Warm Hour'. The trial was offered to 85 Living Lab households, a subset of which signed up to the trial, with the most common reasons for switching being 'improved control and comfort' and 'certainty of price'.
The UK has a target of achieving net zero emissions by 2050, but only five per cent of UK homes currently have low carbon heating systems, compared to 85 per cent with gas boilers. Heating accounts for a massive 32 per cent of all the UK's greenhouse gas emissions, and while the government has passed legislation banning gas boilers from being included in new-build homes from 2025 experts remain concerned that decarbonising heat remains one of the biggest technical challenges for the net zero transition.
Low carbon heating remains "a step into the unknown for most households", according to Dr Matt Lipson, consumer insight business lead at Energy Systems Catapult. He argued that moving people towards paying for hours of warmth instead of KwH could help ease the transition to low-carbon forms of heat.
"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," he said. "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."
Energy Systems Catapult is also testing the performance of hybrid heating systems that combine traditional gas boilers with an electric heat pump, installing heat pumps in five of the 100 homes in the Living Lab system. It found that heat pumps delivered between six and 63 per cent of the heating, depending on how each household used their smart controls. The household utlilising the heat pump only six per cent of the time subsequently increased that figure to 51 per cent following some simple advice, the firm added. Ultimately, four of the five homes trialling the hybrid system said they were open to removing their gas boiler and relying entirely on a heat pump.
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