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Steven currently manages both our Heat Insight Service and Gas Heating Service, leading our research in each of these fields. He joined us from Energy Saving Scotland / Changeworks in 2011, where he worked as an Energy Advisor. 

Steven holds an MSc (Distinction) in Climate Change: Impacts and Mitigation from Heriot-Watt University and an MA (Hons) in Geography from the University of Edinburgh.

State of the micro-CHP sector part 1: 2015 sales and market summary

The first of our two-part blog on the state global micro-CHP market provides a run-through of the key events that shaped the outcome in 2015 – taken from the Delta-ee ‘Micro-CHP Annual Roundup and Market Outlook’ report.

2015 was the year of the first ‘double-dip’ in the micro-CHP market

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Customer Panel highlights: Homeowners prioritise heating system ‘reliability’, and respond positively to energy storage

In my last blog I introduced the Delta-ee Customer Panela brand new resource made up of 1,000 UK homeowners. Our panellists will participate in numerous exercises throughout the year, enabling us to explore in detail customer attitudes to heat, energy, technologies, new business models, to name a few the key uses.

In this post I share some interesting findings from our first research piece with the panel and look specifically at what our participants say about the opportunity for energy storage.

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Delta-ee launches brand new Customer Panel

We are very excited to announce the launch of the Delta-ee Customer Panel. This is a brand new resource made up of 1,000 panellists who will participate in a series of research exercises – to be conducted mainly as part of our ‘Heat Insight Service’ (HIS) programme for 2016/17.

The panel is made up of a highly-representative sample of UK homeowners – whose views, feedback and experiences will provide unique insight as we help our clients identify the key opportunities for growth in the domestic heating sector (which, irrespective of recent political events, will remain the continent’s largest heating market).

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Microgen with monitoring: The way to open up the market?

In the latest survey of British homeowners carried out under the Delta-ee Microgen Insight Service it was revealed that the inclusion of remote control and remote monitoring / maintenance features could have a sizeable impact on sales of renewable heating products.

This appears a strong option for product suppliers who want to widen their market beyond the small portion of homeowners that are already buying. We are beginning to see more of the latest products on the market (particularly air-source heat pumps) offering this feature.

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Ecobuild 2015 - 7 key take-aways from the event

Once again, March’s Ecobuild exhibition in London provided a valuable window into what’s happening, and what isn’t, in the UK low-carbon heating market. The event is the largest of its kind in the UK - showcasing the latest in sustainabiliby, low-carbon design and construction and energy technologies, among other topics.  Delta-ee's Microgen Insight Service research team were in attendance for all three days of the conference and exhibition.

This time around we were impressed with the variety of new renewable heat products coming to market (if not with the lack of finance to help customers afford them), underwhelmed by the lack of push from the big heating brands and any commitment-demonstrating announcements by civil servants, and enthused by the range of innovation shown around technologies like PV and energy storage. This blog provides a summary of our seven key take-away thoughts from the event.
1. A lack of big brands exhibiting - doors opening for smaller players
This is indicative of the big boiler brands backing away from low carbon heat in the UK at present – good news for specialist manufacturers, who have an opportunity to monopolise the early market. Companies like Bosch and Baxi, and other important names like Dimplex, Mitsubishi and Daikin (to name a few) chose not to take a stand this year and instead displayed a selection of products in the merchant areas.
2. Finance needed to unlock the full potential of the domestic RHI
There is no hiding from the fact that the RHI, in its current format, has failed to have the impact many in the industry expected (or hoped). It was clear from the event that the innovative financing packages our research shows customers are looking for are yet to reach the market.

Based on our own customer research Delta-ee still believes third party financing could significantly change the shape and trajectory of the market. If any of the big players can find a way to make this work this will be a game changer for the RHI.
3. Emphasis on wholesalers as the low-carbon route-to-market
Most large manufacturers showcased their products via the wholesaler stands: Travis Perkins Group, Plumb Centre etc., indicating a shift of focus from manufacturers – no longer trying to be a customer brand. Or maybe, just a bit of marketing maths to save costs?
4. BRE launched the new Quality Home Mark
The new Quality Home Mark – a consumer-centric replacement for the departing Code for Sustainable Homes - was unveiled for the first time. The launch marks the start of a renewed focus on energising the consumer; potentially a fantastic opportunity for microgen technologies.
5. PV still dominates the microgen sector in the UK...
Huge stands imported by Chinese manufacturers made an impressive sight once again in the Excel: JA Solar, Yingli and Jinko, for example.  Now a household name – the most recognisable technology among customers – PV demonstrates the mass appeal microgen can have if the pitch, and the price is right (at 45p/W the market has become very competitive).
6. ...Although manufacturers continue to provide more renewable heating options
While the big traditional brands may be scaling back their efforts, there is no shortage of smaller, more specialist companies bringing new products to market. For the most part it was evolution rather than revolution, but there was a wide range of next generation low-carbon central heating products on show. Notable examples included: Daikin's new reduced-size increased-performance monobloc air source heat pump (ASHP), Vaillant's wall-hung shared-borehold ground source heat pump (GSHP), Viessmann's fuel cell-powered micro-CHP and Grant UK's new condensing pellet-fired boiler.
7. Innovation was mainly focussed on 'smart' heating controls
The growing presence of companies offering the next generation of ‘smart’ heating controls: learning thermostats, zonal control and remote control apps etc., this year was undeniable. Such players were often the ones taking up space on the big stands vacated by the large OEMs. The jury’s still out on whether or not these products will be an enabler for the microgen market, but they are fast gaining momentum with customers; helping them become more engaged with their ‘boring old heating systems’.  It’s a start.

So what about next year? The ethos of Ecobuild 2016 could be all-change depending on what happens with the election in a few months’ time. With DECC’s current call for evidence and timeline for introduction on third party financing in the domestic RHI, we’d be really surprised at a comparable lack of ‘green’ financiers next year. The presence of energy storage grew at this event and we certainly expect this trend to continue, as will the encroachment of smart controls into the mainstream market. It remains to be seen whether the big heating brands will decide to become more heavily involved from 2016, probably not, but this will at least again leave the door open for the smaller, more invested manufacturers to get customers more interested in renewable heat.

Download our expanded event briefing note here.

Contact: [email protected]; +44(0)131 625 1003.
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Social housing sector remains a vital part of the microgen market – but the sales pitch needs to change

Delta-ee analysis shows that socially-rented housing accounts for more than half of the UK microgeneration market (excluding solar PV).   But our latest research with social housing providers tells us that low-carbon microgeneration is becoming a tougher sell for this customer group.

We conducted a series of in-depth interviews with Registered Social Landlords (‘RSLs’; councils and not-for-profit housing associations) in early 2014, which updated and extended our previous research from 2012 and 2013.  This research shows that while there are still strong drivers for social housing providers to engage with microgeneration, there are also new challenges with this customer group.

Why has low-carbon microgeneration become a tougher sell? Principally it’s because of:
  • An increasing frustration with the supply chain:
  • Policy interventions adding further strain on internal funds:
  • Greater competition from lower cost alternatives:

Our 2014 research indicated that the quality of the overall customer experience is too often not living up to expectations. In many cases what this boils down to is a lack of openness in communication from the supplier to customer. This one should be easy to fix, you’d think...

RSLs also told us just how impactful the welfare reforms have been on their day-to-day operations. The bottom-line is that rent arrears are up and access to both internal and external finance is more difficult. Suppliers who can offer financing options will find themselves in a great position. Lower cost options like passive flue gas heat recovery or voltage optimisation have become more attractive as a result of the budget constraints.

Despite these barriers, there are still strong drivers for social housing providers to engage with microgen:
  • An internal drive for affordability and sustainability:

  • Products offer access to secure revenue streams:

  • The urge to innovate and stay ahead of the curve: 

What hasn’t changed is the fact that microgen saves tenants money on their fuel bills and is one (of several) ways that organisations can meet their sustainability goals. Increasing and diversifying revenue streams, however, is being given more priority - so there is scope for suppliers to utilise the RHI creatively.

The opportunity is not all about incentives though.  The social housing sector continues to look more positively than other parts of the market (e.g. homeowners or homebuilders) towards whatever innovations the market can throw at it!

So, social housing is still willing to listen, if the pitch is right.

We heard enough evidence to believe RSLs should continue to be a key target for sales over the coming years, and will be responsive, given the right pitch. Crucially, it’s the ‘right pitch’ that’s shifted more than the scale of the opportunity.

Delta-ee’s research with RSLs was conducted as part of our annual research programme for subscribers to the Microgen Insight Service (MIS).  For more information on the additional deliverables we provide, contact [email protected]> or check out the MIS home page on our website.

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