Much like the man of steel himself being confused for what he’s not, heating manufacturers are increasingly being confused for what they used to be (see: boiler manufacturers). That is, they’re increasingly moving away from their traditional manufacture-only role as a result of the broader energy market shift towards distributed energy. As I’ve said before, this shift is resulting in large disruptions in the energy market, with many firms being forced to reconsider their existing business models and re-evaluate their likely future opportunities for value creation. Incumbent heating manufacturers are no different; with their core markets under threat by new entrants they are increasingly searching for a hero to save them. Alas, in the absence of superman, they’ll probably have to save themselves.
From manufacturer to super hero supplier
As part of our Energy Services Innovation work at Delta Energy & Environment, we are constantly on the look-out for new and innovative business models to help our clients develop the right proposition for themselves and their customers. We have recently combined this work with analysis from our heat insight service, examining how heating manufacturer business models are taking flight and evolving within the UK and other European markets. One such manufacturer, Flow, traditionally known for its work developing a market-leading micro-CHP proposition, is breaking down the stereotypes and exploring what the future holds for an entrepreneurial heating manufacturer.
Is an energy utility the new alter-ago of the heating world?
In the past we’ve been interested in Flow’s re-packaging of its micro-CHP appliance as a novel energy supply offering. Financial savings that accrued were used to finance the unit itself – thus giving the end-customer “something for nothing” (i.e. a no upfront cost heating system). This was often advertised under the catch-phrase:
“changing the way people think about energy by delivering micro-CHP to the mass market”.
More recently they, and firms like them, have upped-the-ante, switching their focus to the provision of a wider range of energy products & services. More specifically, through a broadened vision and smart partnerships, they are providing customers with much more than a heating system, including: energy supply contracts, smart home products, insurance & warranties. That is, they are providing “energy for life”.
This shift in approach represents an attempt by some manufacturers to broaden their potential value streams, all as part of a new set of firms entering into the energy utility space. The question is, do they have what it takes to leverage their existing skills, and those of their side-kick firms to make a go of it and dethrone incumbent players in the race to transform into a modern energy company?
So what about me?
In a world increasingly filled with super hero supplier wannabes, we’re increasingly asked: What do customers want? What approach should I take? How can I make sense of all this change, and make the most of it?
Working at the forefront of the distributed energy transition, we look to answers these questions, and put approaches like those of Flow above into a tailored context appropriate for firms and their businesses. Our ongoing monitoring and analysis of market changes allows us to keep abreast of the latest opportunities and help firms restructure their business model approach to bring out the superhero within.
So do you have what it takes to be a super hero supplier, that is, a modern energy company? Shoot me an email, [email protected], and let me know. Alternatively, join the discussion and get involved via our LinkedIn Group ‘Delta-ee Energy Services Innovation Group’.