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Selling heating systems online: the first step in the evolution from products to services

Buying a new heating appliance today typically involves finding and dealing with a local installer, as well as taking time off work to wait at home for a site survey and installation, all for a price which the customer generally does not know is competitive or not. Why not just buy online? With the internet giving customers more power and more information, is this trend finally coming to the very traditional heating sector?

New entrants like Thermondo are speeding up this slow and arduous process by doing the site survey remotely, either by asking the customer a few simple questions online or over the phone, having them upload photos of their heating system, or doing a video call. The first benefit for customers here is that they don’t have to wait very long at all to get a quotation, and they also don’t need to be at home waiting for an installer to come around and do it.

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Defining Heat as a Service

A PDF of this graphic can be downloaded here.

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UK heat pump market likely to double by 2025

With the Chancellor’s recent announcement that fossil fuel heating could be banned in all new homes built after 2025, there will no doubt be significant opportunity for low carbon heating into the future. However, while we wait with anticipation for building regulations to be updated, there is still strong potential for growth in UK heat pump market.

Delta-ee recently reviewed the opportunities and barriers for heat pumps to assess how the market is likely to develop over the next few years. Despite the uncertainties surrounding future support for heat pumps after the Renewable Heat Incentive ends in 2021, and the potential negative impacts of Brexit on the heating market (however that might eventually pan out!), our central forecast foresees the UK heat pump market doubling in size by 2025.

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Integrating gas and electricity vectors in future energy scenarios with the 2050 Energy Pathfinder Model

Delta-ee recently supported Wales & West Utilities’ strategic work looking into the future role of gas in the UK as part of an integrated cross-vector energy system. We helped Wales &West Utilities develop a new generation of their 2050 Energy Pathfinder Model that assesses the impact of different future energy mixes on the balance of electricity and gas supply and demand for any size population in the UK. The main objectives of the rebuild were to critically review the methodology and assumptions, streamline the model methodology, and improve the model’s user interface.

The model simulates hourly supply and demand profiles for gas and electricity across a defined region for a sample year. Together with existing sources and demands, new sources such as tidal barrage, and demands such as EVs are included, alongside fuel switching between the electricity and gas vectors (for example, using hybrid heat pumps). This enables a range of storage, demand response and new technology innovations to be simulated. The model outputs the following results:

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Will Energy-as-a-Service kill the kilowatt-hour?

Last Thursday I attended the UK’s 2018 Heat and Decentralised Energy Conference. There were several exciting sessions on policy, technology, infrastructure and customers – reflecting a market that is starting to see a lot of change and disruption. Tim Rotheray, Director of the Association for Decentralised Energy, gave what I thought was an especially interesting talk on why he believes the time for Energy-as-a-Service (EaaS) has finally come.

Whether Energy-as-a-Service will lead to the death of the kilowatt-hour, as Tim suggested, has been a topic of debate within Delta-ee. We agree that customer culture is certainly changing. The trend from product and commodity towards services and outcomes is emerging across multiple industries. Customers will pay for services’ outcomes (such as comfort or mobility) rather than products and commodities (such as fuel). Just look at car leasing, music streaming and even clothing rental.

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What do installers think of digital sales platforms for heating systems and home services?

That’s the question Delta-ee’s upcoming installer research is aiming to answer. The heating system installation market in the UK is currently dominated by small independent local tradespeople. These businesses do both technical work and sales. However, a growing number of digital platforms are emerging where sales are facilitated by a third party. These digital platforms certainly have the potential to significantly disrupt existing sales channels, but getting installers on board will be crucial to their success.

We’ve seen lots of activity in the market for booking home services online since British Gas launched its Local Heroes platform in mid-2017. Heatable came on the scene shortly thereafter, marketing itself to installers as “your digital salesman”. Smart thermostat manufacturer Tado has since begun offering boiler repair services through its partnership with HomeServe, and both John Lewis Home Solutions and Amazon Home Services have now launched in the UK. Hoppy, born out of EDF Energy’s innovation accelerator, recently unveiled its complete home management site with a number of services to help users simplify running their homes – including a tradesperson booking portal.

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