Heat-as-service declared a hit in Living Labs trial

The trial was run as part of the Living Lab project, coordinated by the Energy Systems Catapult, where 100 homes spread across Newcastle, Manchester, the West Midlands, Gloucestershire and Bridgend in Wales were fitted with “smart heating systems”.

The Catapult team devised a heat-as-a-service offering called a “Heat Plan”. Instead of buying units of energy (kWh), consumers could buy hours of warmth in their home, known as “Warm Hours”.

Under the trial, Baxi Heating UK successfully sold a Heat Plan that bundled a new heating system, servicing, maintenance and energy for a fixed monthly price.

The fixed price was based on data about the thermal efficiency of their home and the number of hours of warmth needed each week and was not affected by the weather or outside temperatures.

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

 

Dr Matt Lipson, consumer insight business lead at Energy Systems Catapult

Under the “mobile phone-style” Heat Plan, a replacement heating system was bundled with servicing, maintenance and the energy needed to be comfortable, as a phone would be bundled with calls, texts and internet data.

Meanwhile, Bristol Energy, which is owned by Bristol City Council, also trialled heat-as-a-service products, selling both fixed price and Pay-As-You-Go Heat Plans to domestic customers.

The two options covering both heat and hot water, with variations on the levels of service and payment terms. Living Lab residents could compare the options on digital Energy Services Marketplace.

In five households, the Energy Systems Catapult also tested the performance of hybrid heating systems that combine traditional gas boilers with an electric heat pump.

This model can help to defer the up-front capital barrier associated with many low carbon heating options thereby aiding decarbonisation efforts

 

Jeff House, head of external affairs, Baxi Heating UK

Participants in the year-long trial, which started in February 2019, were asked to give their feedback to researchers at Energy Systems Catapult, to helping them to understand how Heat Plans affected energy behaviour.

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 at 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.

“To help understand the practical aspects of delivering such a solution we have found our work with the Catapult invaluable.”

Samantha Nicol, head of innovation at Bristol Energy, said: “We are thrilled to be the first UK energy company to be trialling Heat Plans in Energy System Catapult’s Living Lab.

“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.”

The trial offered 20 households in the Catapult’s Living Lab a Baxi Heat Plan. Each already had smart heating controls installed and were familiar with the concept of ‘Heat Plans’.

From the group of 20, 13 wanted to discuss the offer; 10 said they liked it and were enthusiastic; 1 household that had an old, inefficient boiler accepted the offer and had a boiler installed.

Meanwhile, the Bristol Energy Heat Plan was offered to 85 Living Lab households that already had smart heating controls installed and were familiar with the concept of Heat Plans.

Following the trial, a sub-set of households signed-up to continue the Bristol Energy Heat Plan trial. The most common reasons given for switching was “improved control and comfort” and “certainty of price”.

The “Hybrid Heating Systems”, combining a heat pump with an existing gas boiler, were 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.

Heat pumps were installed in 5 of the 100 homes in the Living Lab, creating a hybrid system.

The Hybrid heating systems achieved the same temperatures and levels of comfort as the gas boiler had done by itself. Four of the 5 homes trialling the hybrid system were open to removing their gas boiler and relying entirely on a heat pump if they could buy their heat as a service, such as a Heat Plan.

 

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