Bringing together delegates from across the energy sector, our European Heat Summit 2018 inspired interesting discussions, debates and insights on the hot topics of the low carbon heating industry. Delegates talked about the key challenges and opportunities presenting themselves now and going forward, and how companies are responding to these.
The Summit discussions encompassed several topics that are key for the future of the low carbon heating industry, but some themes stood out throughout the event:
- There are several innovative business models providing a more personalised and simplified customer experience, from online sales of boilers to energy community offerings. Online sales especially represent a potentially significant means of empowering customers in the selection of heating systems but are currently focused on displacing parts of the supply chain (such as the current reliance on installer selling capability) rather than boosting uptake of low carbon solutions.
- The business models of the future are largely service-based, focussing on comfort and peace of mind for the customer (whether through maintenance models, or heat (in kWh or degrees) as a service) and taking advantage of smart applications. This trend has already opened the door for new market entrants (including major players from other parts of the value chain that have previously not been end-customer facing).
Image 1: Session 2 explored new and emerging business models
- End-customers are rarely engaged with their heating system, so added value is key. It is here that integrated offers (such as bundling with lifestyle products such as smart controls) can come to the fore. End-customers are prepared to respond to incentives to support the energy infrastructure (through allowing remote flexible operation of their heating system) if the price is right and the intervention does not noticeably disrupt or reduce service level.
- Successful energy system transition to a low carbon residential heat sector will include a range of solutions targeted to meet respective customer needs. However, this will only be achieved if customers are properly informed regarding the available options. The lack of public awareness of technologies and poor understanding of how these might suit their particular circumstances, is a major challenge in incentivising change in end-customer purchasing behaviour. Public awareness campaigns and incentivising installers to leverage their influence over end-customers are valuable tools here.
- Policy at EU and national level is driving significant change in residential heat and manufacturers are grappling to come to terms with the implications for their business whilst actively developing products to meet the demand for low carbon gas and electrically-driven solutions.
If the low carbon heating industry is to grow rapidly enough to meet European and national decarbonisation targets, significant developments in business models and end-customer awareness are required. While policy can help to push the market, customer pull is key. Industry must therefore sustain engagement with the end-customer throughout the lifetime of their heating system, not just at the point of sale. Without this, the heating market will not develop at the speed required.
Innovation in business models and routes to market are already empowering customers, providing greater choice and disrupting the established value chain. As the heating industry rises to the challenge of decarbonisation, and additional considerations such as sustaining the electricity and gas networks, we expect this exciting metamorphosis to continue. Watch this space.
Image 2: We were pleased to welcome speakers from the above companies to DEHS2018.
Visit www.delta-ee.com/DEHS2018 for more information.