Around 14% of total UK emissions come from domestic heating. Here, Richard Halsey, innovation director, and Edmund Hunt, design lead at Energy Systems Catapult, say that with 28 million homes the UK must find a way to accelerate its transition to low carbon heating solutions in order to achieve Net Zero by 2050.

Step forward, Heat-as-a-Service (HaaS)

HaaS is an innovative solution to our energy transition that offers an outcome to consumers – warmth and comfort – as opposed to products (i.e., kWh or boilers). It can also include financing to help overcome upfront capital costs, enabling customers to better afford being warm and comfortable at home without the carbon emissions. HaaS would see the provider taking responsibility for achieving the customer’s desired outcomes.

HaaS has the potential to help households navigate complex choices across technology, finance, system operation and optimisation including accessing the value of being flexible whilst achieving what they want – comfort.

Unlocking the potential of HaaS

With so much potential, how do we tap into this and deliver HaaS for the benefit of consumers?

There is a clear need for businesses to mainstream innovative propositions and develop new ones that meet the needs of consumers, including the vulnerable. The evolution from energy retail to service provision will require businesses to build more integrated solutions, but these solutions need to be simple and easy to understand for consumers and be delivered through a foundation of trust focused on outcomes.

We are starting to see more businesses developing solutions along the Heat-as-a-Service roadmap. From companies like Centrica launching a warm home guarantee for new heat pump installations to Energiesprong UK developing comfort plans for whole house retrofit of social housing

The Net Zero Infrastructure Industry Coalition, supported by Mott Macdonald, National Grid, and The UK Green Building Council has been exploring the benefits and challenges of accelerating Heat-as-a-Service in the UK. This has identified some clear benefits for businesses including acquiring new, and retaining existing customers with longer-term relationships and increased value from more appealing customer offers.

Recommendations to deliver HaaS

Realising the potential of Heat-as-a-Service will require collaborative research and innovation across a range of different areas, including business models and financing, customer behaviour and preferences, regulation and policy, service design, system integration and interoperability of different low carbon heating technologies.

To achieve this, we believe:

  1. Government and innovation funding bodies need to support businesses in developing and testing a wide range of innovative and digitally enabled Heat-as-a-Service solutions and create the conditions to bring the most promising and appealing of these to market quickly. This needs to be collaborative working with consumers and focus on packaging technologies into outcome-based solutions.
  2. The regulator needs to consider and introduce more sophisticated means of measuring competition that reflect the energy outcomes desired for consumers, such as keeping warm and decarbonising energy used in our homes and allow long term customer relationships to be developed that ensure value and support efficient delivery and use of energy in the home and move away from simply focusing on retail switching.
  3. Businesses need to be ambitious and invest in developing and testing Heat-as-a-Service solutions with real people, understand value and risk, collaborate to build roadmaps and associated supply chains for Net Nero heat.

HaaS has the potential to reshape the UK’s approach to decarbonisation and deliver warmth and comfort. We need to convince consumers that decarbonisation can work for them, rather than being imposed on them. If we don’t get this right, we won’t get their buy-in.

The rollout and adoption of HaaS can help change this view, by deferring the up-front capital costs associated with low carbon heat and energy solutions – barriers which often convince consumers that decarbonisation is out of reach for them – as well as focusing on delivering outcomes rather than measures. Innovative services can also help to streamline the process for consumers. This will go a long way in convincing homeowners to make the switch to alternative heat sources.

To find out more, click here. Or, contact: edmund.hunt@es.catapult.org.uk