Mostra MCE is a biennial trade fair in Milan covering heating, cooling, water and energy – while having a strong focus on the Italian market, it’s a major international event. Maria Synodi from our Connected Home team and I had the opportunity to visit and we enjoyed meeting many of our subscribers and industry contacts there (and also escaping from the snow in Edinburgh!).
In this short blog we share some of the things we learnt, and hope you find it useful. As always, we welcome your feedback and questions so please feel free to contact us directly.
Disruption of the heat market is gaining pace
Three themes came out of Mostra MCE for us:
- More competition. Low cost manufacturers – particularly from eastern Europe – are becoming more prominent. Whether they can establish the distribution channels and route to customer remains an open question but it’s clear these companies have to grow outside of their domestic markets to reach scale.
- A different type of competition. Alternatives to the standalone gas boiler are continuing to become more credible and competitive. We saw evidence that different types of hybrid technologies are emerging – not only gas boiler/ASHP but also all electric solutions or even gas boiler/GHP combinations (see below). We heard how the major air conditioning companies were showing air-to-air products that could do heating & cooling but also had a hydronic circuit to provide low temperature heat (for example to underfloor heating). These products could be well suited to the new build housing market and be a threat for traditional heating manufacturers in Europe.
- Digitalisation. No one (including Delta-ee) is suggesting that most customers are today willing to buy a new heating system online, but this may change in the future. We saw further evidence that the major manufacturers are all actively developing their digital strategies – for example it was interesting to see both Ariston and Baxi show smart thermostats which carried their own brands. Building a strong brand with householders (not just the installer) may become increasingly important in this changing market where smart speakers compatability (i.e Amazon Echo, Google Home, Siri) is a must-have today. It’s clear that many of our clients see significant opportunities and threats from increasing digitalisation and it’s become one of the main areas that we are supporting our clients in. It will be one of the key themes at our digital summit in Edinburgh in April: www.delta-ee.com/EDES2018.
Remote boiler diagnostics are emerging
Despite still being a niche concept, we saw a wide range of companies, from established players like Ariston to smaller players like Cosmogas, developing their own remote diagnostics solutions. A year ago, this market was almost non-existent but it is currently emerging and gathering cross-industry interest from start-ups, HVAC manufacturers and boiler servicing companies, who look to gain a piece of the pie. We expect an intense market competition in this market in the following years.
Robur Gas boiler/Gas Heat Pump Hybrid
It was interesting to see that Robur were showing this new product, not commercially available yet and designed for the north European market. This is the same K18 unit but with an integrated 18kW boiler. The GHP provides the base load for heating circuit and the boiler does the peak for DHW. The main advantage appears to be that there is no requirement for a hot water tank – therefore opening up the combi boiler market.
Storage, DSR and EV Recharging Not Hot at Mostra
While Delta-ee expect Italy to be one of the strongest markets in Europe for behind-the-meter storage in the next 2-3 years, it was surprising the relatively low profile that battery storage products had at the exhibition. However, the vendors we spoke with confirmed our positive outlook for the market – particularly if the tax rebate scheme that currently applies in Lombardy is extended to other regions. There seemed to be an absence of vendors promoting products or services relating to demand side flexibility – perhaps not as surprising given the very embryonic state of this space in Italy. Regarding EVs, I guess it’s not seen as part of the “home” and so not a focus for the organisers of the event. One of the German storage companies is, however, already talking about introducing its EV customer proposition into Italy. By Mostra MCE 2020, I would expect EVs to be part of the home – let’s see.
A Couple of Personal Favourites
Congratulations to Glen Dimplex who have designed an outside heat exchanger that even my wife might let me put in our garden – it’s been a source of confusion for me over the years as to why more companies have not put some design effort into this.
For those of us who don’t already have a perfectly good set of speakers that can be moved to the bathroom if necessary, we also spotted a bathroom radiator with speakers built in! It’s solving a first-world-problem, that’s for sure – and it looks pretty cool – but is it worth the investment?
And commiserations to the (unnamed) company that had a Humvee as its stand – and I mean ‘as’! The Humvee was just big enough to occupy the entire booth space with a (very) small gap behind it for a company representative. I’m sure it was a good idea on the whiteboard but at an industry fair focused on energy efficiency and comfort? A laugh-out-loud moment.
We have our annual heat summit in Berlin in June and some of the above themes will be on the agenda there – find out more at www.delta-ee.com/DEHS2018.