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European heating: a market on the cusp of disruption

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At Delta-ee we’ve been analysing and researching the heating market for over 10 years. We think it’s interesting - even fascinating! To many though it is a market that is stable, slow moving and hard to break into (many have the scars from trying to do so). We agree in many ways it has been like this, but we firmly believe it won’t be in the future. There will be some big winners from this change – and some big losers.

There are several factors contributing to the disruption of the market and we will discuss these in-depth at our upcoming European Heat Summit. Visit to view the programme and register for this exclusive event. For now, read on to find out more about five of the most influential factors in the market at the moment.

  1. Customer centricity. Customers in many industries are increasingly empowered and demanding. In mainstream retail, customers demand experience and service beyond the product itself and the internet has enabled customers to research and understand products. Relating this to the heating sector, we find customers increasingly wanting to make or be part of the decision making process, rather than purely relying on their installer. Companies that can play into this – with great experience and service – will be the winners. The route to market is changing.
  1. Digitalisation and connectivity. Soon, all new heating systems, thermostats, and even many radiator valves will be connected. The opportunity (and challenge) isn’t a technical one, it’s one of propositions and business models. In a world where insights from data can be used to specify the right heating system for a particular customer, provide remote monitoring, optimisation and diagnostics, and help customers improve their comfort for lower costs, today’s way of doing business will seem archaic.
  1. The rise of services. If you haven’t yet heard the acronym “aaS” then you will soon. Product-as-a-Service business models are gaining traction – focusing on providing customers with the service they want, rather than selling them a product. Younger people are increasingly comfortable with the idea of paying for a service rather than owning a product. “aaS” will transform the transport industry, and in our view change a significant part of the heating industry, as elements of the “aaS” model start to make inroads.
  1. Decarbonisation and electricity system coupling. Decarbonisation of heat is progressing slowly compared to electricity, but it is coming. Arguments prevail around the future mix of gas, electric and heat networks. In our view, what is certain is that (1) the proportion of heat demand met by electricity will grow, and (2) there are big opportunities available from optimising the operation of heating systems according to electricity systems values. 
  1. Technology and product development. The condensing boiler is at an evolutionary dead-end. Electric heat pumps are a mature product. But we are strong believers in the opportunity for more efficient heating systems. A big part of the answer is in the word “system”, which means heating systems will be more complex in the future. Electrically driven heat pumps still have lots of potential for further improvement, and technologies such as gas-driven heat pumps, hybrid heat pumps and micro-CHP offer potential for gas.

To explore the disruption, change and opportunity of European heating markets, come to our European Heat Summit in Edinburgh on 7-8 June. Visit or email for more information.


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