Keith Taylor, director of AMA Research, gives an overview of the space heating market.
The UK space heating market forms a key part of a total UK heating market worth around £2 billion.
Since 2013 the market for domestic and non-domestic space heating products has steadily increased, with demand picking up as the economy improves. The space heating market is estimated to have grown by around 4% in 2014, with a similar growth rate predicted for 2015.
Positive influences on this market include growing concerns over energy efficiency and the environment, and both domestic and non-domestic space heating products are increasingly designed to deliver improved thermal performance, with a view to achieving lower running costs.
Further revisions to Part L 2013 have contributed to a reduction in the overall heating load in the new build sector, with increased energy efficiency requirements. This has impacted on the type of domestic space heating products that are specified, with more efficient solutions in greater demand.
This increased emphasis on reducing energy consumption and carbon emissions is also having a significant impact on the type of commercial space heating systems specified.
Also, considerable replacement opportunities remain in existing non-domestic buildings; there is still a large number of inefficient heating systems in use.
The government has introduced a significant amount of environmental legislation in recent years placing a greater emphasis on carbon emissions and fuel efficiency.
Winter temperatures also have a significant influence on demand for domestic space heating products, particularly on portable products. Since 2011, winter temperatures have remained relatively mild, impacting on demand to some extent. However demand for wood burning stoves has seen a significant positive growth and they have become a desirable addition to the home.
Electric and gas fuel effect fires continue to demonstrate underlying growth, motivated by ease of control and convenience. Flueless designs are particularly popular as they offer an affordable way to update a room.
The steady growth of communal or district heating systems is having some positive impact on demand for commercial boilers. This is where heat is generated in one central location and distributed throughout a number of multi-residential buildings, typically flats and apartments.
The future performance of the UK space heating market is likely to be influenced by overall trends in house building and construction, RMI activity, fuel prices, energy efficiency legislation, renewable technologies, levels of personal disposable income, and niche market drivers such as the self-build and conservatory markets.
The Energy related Products (ErP) Directive for commercial hot water boilers will come into effect from 26 September 2015, and other initiatives such as the ECO scheme and the Green Deal will also influence growth to some extent.
The Carbon Reduction Commitment (CRC) energy efficiency scheme, launched in 2013, will provide some positive influence on non-domestic heating installations. As part of the transition to a low carbon economy, there is a government initiative to install smart meters in all homes and businesses by 2020. The widespread roll-out is planned to start in 2015 and will impact on the demand for energy efficient space heating solutions.
Given that fossil fuels are diminishing and government targets for reduced CO2 emissions have to be met, the impact of renewable technologies on the UK space heating industry in the medium to longer term is likely to be significant.
It is anticipated that the trend towards low carbon buildings will result in the adoption of a wider range of technologies in order to deliver efficient space heating. These are likely to use a combination of both fossil fuel and renewable heat sources.
The current forecast is based on steady recovery for the wider economy and for consumer and business confidence levels. By 2019 it is estimated that the UK space heating market will be worth some £630m, having grown by 12% compared to the estimated market size in 2015.
The ‘Space Heating Market Report–UK 2015-2019 Analysis’ report is published by AMA Research, a provider of market research and consultancy services within the construction and home improvement markets.