Sales of boilers, radiators, controls and pumps have grown by £100 million as Internet of Things, the Renewable Heat Incentive and ECO2 underpin demand growth, according to a new report on the domestic central heating market.
The report from MTW Research shows that 250,000 central heating installations were undertaken in the last three years as a result of the ECO scheme, with MTW indicating that this provided a welcome boost for heating manufacturers, distributors and installers.
The company has forecast sales growth for central heating products at £20 million for 2017 despite more challenging market conditions in 2016.
Based on data from 140 heating suppliers, the research shows that 18.4 million central heating products were sold in 2016 - the highest number ever. While pricing pressure remains a key issue, investment in added value features such as the Internet of Things (IoT), ‘Smart Technology’ and enhanced user / installer benefits is giving rise to a ‘two-tier’ market in terms of positioning and growth.
The report identified a number of growth sectors in the domestic central heating market in 2016, prompting further optimism for manufacturers and distributors. One example is the higher value biomass boiler market, with solid fuel rising by 40% in the last few years as biomass sales are supported by the Renewable Heat Incentive (RHI), despite biomass tariffs reducing by 20%.
The report also identified rapid growth in smart heating controls and domestic IoT devices. MTW’s director Mark Waddy explained: “Our data models indicate the global IoT market rising by 24% in 2016, with UK IoT market growth of 13%. ‘Smart’ heating products such as IoT controls, IP connected radiators, smart valves and intelligent boilers are transforming the UK heating market in 2016 with double digit growth for the smart central heating market in the near term.”
MTW also reviewed the burgeoning heat pumps market in value and volume, reporting near double-digit growth with ground and air source heat pumps gaining share of the overall domestic heating market in 2016.
Sectors such as heat pumps and the circulators market have continued to benefit from the Energy Related Products legislation with boiler and heat pumps sales boosted by a £6 million bonus pay out from RHI installations.
Forecasting further ahead, the report indicates that heating sales are set to rise to near double-digit growth by 2020, though sectors such as the radiators market, valves and the heating controls market are becoming increasingly polarised in terms of value and volume.
The research also included analysis of 140 heating suppliers and channel shares to 2020, uncovering a generally optimistic market for central heating sales in 2016 with growth of £100 million forecast across the spectrum of the heating market.
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