Baxi Heating and Bristol Energy are the first companies in the UK to successfully trial selling ‘heat as a service’ ‘Heat Plans’ developed by Energy Systems Catapult.
Energy Systems Catapult created a heat as a service offering called a Heat Plan where, instead of buying units of energy in kWh for instance, consumers buy hours of warmth in their home, which the company calls ‘Warm Hours’.
Now, two British companies have successfully trialled these Heat Plans with consumers. Baxi Heating successfully sold a Heat Plan that bundled a new heating system, servicing, maintenance, and energy for a fixed monthly price.
Meanwhile, 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 (PAYG) Heat Plans to domestic customers
Energy Systems Catapult also tested the performance of hybrid heating systems that combine traditional gas boilers with an electric heat pump.
Energy Systems Catapult runs innovation trials in its ‘Living Lab’, where 100 homes spread between Newcastle, Manchester, the West Midlands, Gloucestershire, and Bridgend in Wales are fitted with smart heating systems that provide room-by-room temperature control and a wealth of data on consumer behaviour and the thermal performance of the home.
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, 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.”
Energy Systems Catapult worked with Baxi Heating UK to create a mobile phone style Heat Plan where the physical device – in this case a replacement heating system rather than a smartphone – is bundled with servicing, maintenance, and the energy needed to be comfortable.
On average in the UK, one in every 20 households need to replace their gas boiler each year. With that in mind, the trial offered 20 households in Catapult’s Living Lab a Baxi Heat Plan.
Each of the 20 Living Lab households already had smart heating controls installed and were familiar with the concept of Heat Plans. The results were:
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 a service has the potential to revolutionise the heating industry.
“In part, this model can help to defer the upfront 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."
Bristol Energy worked with Energy Systems Catapult to design and trial two Heat Plan options for heat and hot water, with variations on the levels of service and payment terms.
Using consumers’ own data, residents in the Living Lab could compare two Heat Plan offers on a digital ‘Energy Services Marketplace’. One was priced for a fixed number of Warm Hours based on their existing heating schedule. The other was a PAYG option with a price per Warm Hour.
Participants who took part in the year-long trial, starting in February 2019, were asked to give their feedback to researchers at Energy Systems Catapult, helping them to understand how Heat Plans affected their behaviour with energy.
The Bristol Energy ‘Heat Plan’ was offered to 85 Living Lab households (the other 15 homes were involved in other trials) that already had smart heating controls installed and were familiar with the concept of ‘Heat Plans’. The results were:
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.”
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