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Chris Jones wonders if we could find a new model for funding heating

With music streaming, e-books to download and films to watch at the touch of a button, the entertainment industry has undergone something of a revolution during the digital age.

Charity shops have become over-stocked with CDs and DVDs as many consumers have welcomed the opportunity to declutter and spend their money on subscriptions to various streaming services.

It seems that the younger generation is a lot less concerned about private possessions and the need for ownership, recognising that music and movies can be enjoyed and consumed without being obliged to visit a retail store and return home with some more dust collectors.

Many consumers also appreciate the benefits of leasing a car, enabling them to get from A to B without the inconvenience of taxies and having any concerns about potential mechanical failures or the vehicle depreciating in value.

Perhaps it is time to re-think whether we need to own our heating system

Chris Jones PHAM News Chris Jones Editor of PHAM News

Heat as a service

Can the domestic heating market not provide a similar level of purchasing options?

After all, when it comes to heating our homes, it’s the feeling of being warm and comfortable that people appreciate rather than the appliances designed to deliver that comfort.

So, at a time when the cost of low carbon heating solutions are likely to be beyond the reach of many household budgets, perhaps it is time to re-think the need to own the products that generate our heating and hot water.

Heat as a Service (HaaS) has been gaining some traction as a potential model for how businesses sell heating.

The concept is based on the recognition that consumers care more about the temperature within a room rather than how that temperature might have been achieved, so the energy provider charges for ‘hours of warmth’ rather than kilowatt hours of energy.

The reassurance of fixed prices

In field trials undertaken by Energy Systems Catapult, consumers were given the opportunity to pay a fixed price for different ‘heat plans’, enabling them to get the level of comfort they wanted without having to worry about the units of fuel consumed.

The research suggests that consumers liked the idea of paying a set price, even if it was more than what they were paying on their energy bills, and also the opportunity to spread the cost of energy performance improvements over time.

As it stands, despite the widespread acknowledgement that we need to accelerate the transition away from fossil fuels, there has been a distinct lack of imagination about how such a switch can be made more affordable for homeowners.

Government schemes have focused on subsidies that reduce the initial capital outlay, but the current Boiler Upgrade Scheme still fails to provide heat pumps at a price that will persuade a sufficient number of consumers to abandon their gas boiler system.

Proposals to start penalising boiler manufacturers may ultimately result in a closer price parity between technologies, but the prospect of higher priced gas appliances is not exactly going to address the affordability issue.

Showing off your new technology

Comparisons have been made with the electric vehicles market, where legislation and incentives have been introduced to prod manufacturers to invest in the production of cars that won’t be so damaging to the environment.

However, it needs to be acknowledged that it is easier to excite consumers about the latest advancement in car design than the piece of kit that warms their homes.

New Tesla drivers are only too happy to let friends and neighbours know about their latest purchase, but how often do you hear people boasting about their new heat pump system?

While some may express a degree of satisfaction in being able to do their bit to lower carbon emissions, it again comes down to the point that for the majority of consumers it’s the heat that is the priority and not so much the mechanism that produces the warmth.

We need a shake-up

Rather than looking at ways to reduce upfront capital costs, perhaps government resources might be better deployed providing support for payment options that might effectively eliminate them altogether.

It clearly requires a shake-up of the existing supply chain, but energy providers, manufacturers and installation companies should be incentivised to work in closer collaborative partnerships to ultimately provide UK homeowners with a more financially viable way to access low carbon heating solutions.

If manufacturers and installation companies are truly confident in the products and services they deliver, perhaps the way forward is for suppliers to retain ownership of the heating system itself, including responsibility for ongoing maintenance, while the consumer pays in regular installments for the all-important outcome – assured comfort and peace of mind.

Such a model may still require a certain level of taxpayer funded support, but would that money not be better spent if it enabled lower-income families to benefit from the latest that energy saving technology has to offer?

Chris Jones is editor of PHAM News