Delta-ee recently carried out a study for the Department for Business Energy and Industrial Strategy (BEIS) to identify the current costs of domestic heating appliances.
The purpose of this study was to inform BEIS’ internal strategy and policymaking decisions.
Three key observations from the study are:
- Low carbon alternatives to boilers / electric heating (such as biomass boilers and air to water heat pumps) remain several £1,000s to £10,000+ more expensive. Government support is critical to the long term development of a sustainable residential market for more efficient lower carbon alternatives to conventional heating systems.
- Finding a single ‘typical’ price is nearly impossible - prices vary widely for the same technology – depending on the size of system, the installer, the location, brand, etc.
- The complexity of the installation will have a significant impact on the fully installed price.
The study examined the main types of UK heating appliances, including:
- Gas boilers
- Oil boilers
- Heat pumps (air-water, ground-water and air-air)
- Electric heating
- Biomass boilers
Data on the cost of heating measures was sourced via interviews with installers and publicly available data. The study found that information from price compare websites, merchants or price lists are useful, but need to be treated with care - this information typically does not indicate the fully installed costs and/or leave out certain costs associated with an installation (e.g. cost of labour or ancillary equipment).
Figure 1 below gives an idea of the typical items included in the fully installed cost of a heating system in a new build setting.
Figure 1: Illustration of some of the typical costs that make up the fully installed cost of a new heating system (in this case for a gas combi boiler)
Figure 2 displays the typical fully installed cost of common domestic heating measures in a new build setting. The range of costs presented reflects the cost variations of the high-end versus cheaper brands and complex versus more simple installations. For example, the upper end cost of the biomass boiler displayed in Figure 2 is representative of a high-end 32kW pellet boiler installed with a large wood pellet store in a house requiring a large heat distribution system (i.e. radiators).
Figure 2: Cost range for typical domestic capacities of heating measures – excluding VAT (click image to open full size).
Air to water heat pumps and biomass boilers are still significantly more expensive than conventional boilers. However, lower annual running costs and Government support makes these technologies attractive proposition for customer in certain segments of the housing stock. This is a situation that the UK government has been addressing and continues to address with a suite of low-carbon heating technology subsidies such as the RHI. Declining cost and the UK’s commitment to battling climate change by driving down CO2 emissions will be strong drivers for the lower carbon heating technologies going forward.
Figure 2 further illustrates how air-air heat pumps (which currently makes up a very small percentage of domestic heating) and electric heating can potentially be very cost competitive heating measures. However, it is important to note that their costs, as reflected in Figure 2, are for the provision of space heating only (i.e. no domestic hot water production).
The Figure above illustrates some of the detailed data in the BEIS report. If you’d like to know more about how we calculated the above costing figures or the UK heat market in general then please don’t hesitate to get in touch with me ([email protected]) or my colleagues from Delta-ee’s Heat Insight Service (https://www.delta-ee.com/HIS).