Low Carbon Heating: Commercial Opportunities and Challenges for the UK, by Dr. Aidan Rhodes of the UK Energy Research Centre (UKERC), is published in advance of the Government’s Low Carbon Heat Strategy.
The report concludes that while there is money to be made in the low carbon market, businesses should be prepared to play something of a waiting game, as it will be decades, rather than years, before any clear winner emerges among the various technologies that currently form part of the low-carbon mix. But contractors seeking to gain a foothold in the sector, with a view to long-term gains, are advised to act now, so as to take advantage of Government incentives such as the Green Deal and the Renewable Heat Initiative.
In 2008, 47% of the UK’s energy consumption was used for heating, with most demand being met through the direct burning of fossil fuels. But as the Government seeks to achieve its ambitious target of an 80% reduction in CO2 emissions by 2030, low carbon technologies look set to become more and more important.
Significant challenges exist, however; installing low-carbon heating systems is a complex task, especially in domestic properties. Unlike electricity, which can be supplied from low-carbon sources using the same transmission network, the process often involves substantial and expensive refits to properties and heating systems. The market is also at an immature stage; each technology has its pluses and drawbacks, with none head and shoulders above the others. Heat pumps, for example, have performed better in Europe than in the UK because they work best in newer, well-insulated properties, whereas much of the housing stock in the UK is old and poorly insulated. District heating, used extensively in Scandinavia, Eastern Europe, the US and Canada, could potentially meet a some of our low carbon heating needs, but the UK lacks any culture of community heating, and the free market which operates in relation to heating throws up challenges in terms of attracting investment or Government buy-in.
Nevertheless, potential entrants to the market should take heart at the lack of an experienced and accredited low-carbon workforce in the UK – just 600 heat pump installers compared to some 10,000 heating installers.  This presents a real opportunity, but again, considerable challenges. The report cites a year-long trial by the Energy Saving Trust of 83 installed heat pumps which found many installations to be incorrectly installed, poorly designed, inappropriately sized in relation to the size of the property, and too complicated for customers to use.  New contractors will need to focus on developing the skills and knowledge base to avoid bad installations, and build reputation.
The report highlights the potential for a single company or umbrella organisation to provide simple, end-to-end installations including user training, and other modifications aimed at increasing energy efficiency. At the moment, most installations are carried out by multiple contractors, with heat pumps, for example, requiring input from plumbers and electricians, as well as the specialist heat pump installer, and no single point of responsibility if the installation fails to perform as expected.
Dr. Rhodes comments: “No-one is going to make a fast buck in the low-carbon heat market, as it will take decades before the market is mature. But a combination of factors – Government incentives in relation to almost all low-carbon technologies, the lack of a properly trained, experienced workforce, and the near-certainty that this is a market set to grow exponentially over the next decade – make investing in the low-carbon heat market a viable long-term business proposition.”
The report was produced for the Energy Generation and Supply Knowledge Transfer Network - https://connect.innovateuk.org/web/energyktn .
To interview Dr. Aidan Rhodes, please contact Lindsay Wright, Head of Communications, or Charlotte Knight, Communications Officer, in the UK Energy Research Centre’s Communications Team:
Lindsay.wright@ukerc.ac.uk- 020 7594 2669
Charlotte.knight@ukerc.ac.uk – 020 7594 1573
For a full copy of the report, go to https://connect.innovateuk.org/web/low-carbon-heat

Notes for Editors:
The UK Energy Research Centre (UKERC) is the focal point for UK research on sustainable energy. It takes an independent, whole-systems approach, drawing on engineering, economics and the physical, environmental and social sciences.
The Centre's role is to promote cohesion within the overall UK energy research effort. It acts as a bridge between the UK energy research community and the wider world, including business, policymakers and the international energy research community, and is the centrepiece of the Research Councils' Energy Programme.
www.ukerc.ac.uk