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Pathways 2.0: your answer to "what if?"

The European Heating & Cooling Strategy and the looming Paris global climate summit are potential triggers for rapid growth in low carbon heating.  But in this evolving policy context, where are the opportunities in residential heating markets, and what are the risks?  Delta-ee is pleased to announce the launch of Pathways 2.0, a tool which is designed to help our clients answer these questions.

Join our launch webinar on the 22nd September 2015 to explore the potential for disruption in the residential heating market using Pathways 2.0. Including:

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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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Italy: A huge residential boiler market, but is there an opportunity for low carbon?

We recently completed our Roadmap Service forecasts for Italy and, having now assessed a number of major European residential boiler markets and the opportunity they present for low carbon technologies, it’s clear that no two markets are the same. Italy is certainly unique!

With around 1 million residential scale heating appliance sales per year, Italy is a big boiler market – the majority of which are gas boilers. So it’s potentially a large market for developers of new heating technologies to target. But Italy is very different to other European markets in terms of: the mix of heating appliances installed; climate (influencing the choice & appeal of heating systems in the North versus the South); the policy framework for low carbon; & economy.

So, does a big boiler market = a big opportunity for low carbon?

Our Roadmap Service takes these factors into account and quantifies the significant role that boilers will continue to play in Italy to 2025. It also identifies clear opportunities for a number of low carbon technologies. A significant share of the heating market is up for grabs.

The figure below illustrates how the value of the heating market in Italy transforms to 2025 from our Roadmap Service forecasts. “Other” technologies (i.e. low carbon heating technologies such as heat pumps, hybrids, micro-CHP, solar etc.) double their market value to ~€2billion by 2025.

Breakdown of the value of the heating market in Italy today and in 2025.



What will drive this transformation in the value of the Italian residential heating market to 2025?

The key drivers that we see delivering this growth are:

1. A recovery in the new build market, which is almost non-existent today

2. Tightening and enforcement of building regulations

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