How heat pumps save money for consumers and increase business for installers
Plus some useful rules of thumb for winning the right projects.
Heat pumps are good for consumers. We’ve all heard the scare stories of misapplied technologies leaving householders out of pocket and in the cold. But we should remember that in the majority of cases, where installed appropriately with well educated users, they provide an excellent service.
Results of Phase 2 of The Energy saving trust heat pump trials have underlined this. It concluded that well installed heat pumps, in homes which have adequate insulation, can reduce running costs substantially. An air source heat pump (ASHP) could save between £150 (replacing oil) and £530 (replacing electric economy 7 storage heating) a year. It would also reduce carbon emissions by 1,400 - 5,700kg CO2 a year. A ground source heat pump (GSHP) could save between £300 (oil) and £685 (electric) a year.
Combine these savings with the income now available from RHI payments and the total figures could be around £1,350* a year on air source heat pumps and around £3,000* a year on ground source heat pumps.
The success of the heat pumps’ performance during the study was underpinned by the experience of the users. Eighty per cent were satisfied with their heat pump’s performance, while over three quarters (77 per cent) would recommend a heat pump to a friend, mainly because of its efficiency and running costs of the system.
Like any system heat pumps are sensitive to design and commissioning, and in recent years the MCS standards have made the requirements clearer and easier for installers to follow.
For installers the gains to their business of installing heat pumps rather than boilers can also be impressive. This is particularly true in the emerging market we find ourselves in.
Early adopters of heat pump technology are typically those with large heating bills or custodians of multiple properties, and are consequently large high-value projects. This end of the market includes luxury new build, large historic homes, social housing and commercial enterprises. The latter groups also offer the opportunity for a great deal of repeat business as trials are rolled out and an ongoing management contacts for the support of the technologies.
New installations of heat pumps are also often accompanied by a full overhaul and upgrading of emitters and plumbing, making those projects even bigger and more lucrative. Getting in early here means the chance to capitalise on the wave of investment that comes with a change to a new technology.
Getting in early also means an opportunity to establish your business as an authority, and take local market share before the competition becomes too fierce.
My advice to getting a share of this lucrative business is simple: know your rules of thumb. Having the knowledge of some simple guidelines under your belt will help you assess quickly whether a heat pump is suitable for a project and will meet the clients budgets and expectations. Having a few simple questions to ask up front will save endless fruitless site visits and quotes, allowing you to focus on projects where there is real potential. So here are my top rules of thumb for the installer:
- Know the return on investment for the customer in terms of the fuel that would be displaced. Replacing mains gas rarely pays (if cost saving is the project driver). But replacing oil, electric or LPG heating can offer them much higher savings.
- Have a good handle on the seasonal performance figures for your part of the country for the different kinds of heat pump. Air source in particular can vary quite dramatically dependent on location and will typically perform better where the air remains warmer. SPF on an air source in Scotland can be 2.9 compared to 3.2 in the South of England. Ground temperature varies a lot less but you can still expect 4.3 in the South compared to 4.1 in the far North. The DECC Heat Emitter Guide is a useful resource for checking this. You can also get location specific picture of typical energy requirements for heating from our heat pump contrubition tool.
- My best estimate from seeing numerous installations is that installation costs to a consumer are around £650 per kW for an air source and double this for a ground source heat pump. I’d be interested to know if you work from different figures though!
- For a horizontal ground source collector you will get a maximum of 25W per square metre. For a new home this means a collector covering roughly double the floor area. The table below will allow you to estimate the requirements for older homes.
- For a vertical borehole you can achieve 50-55w per linear metre.
- To get the RHI funding a project will need to be retrofit and the property will need to be well insulated.
Heat loss by age of home
In short Heat pumps are good all round. They are good for the environment and good for consumers because they save energy. They are good for installers because they are higher value installations and they offer the opportunity to grow your business in new directions. What remains to be done is to ensure that every installation is the best it can be. That’s why we have just become accredited under 1SO 9001, why, unlike the competition, we offer a free design service for every job and why as a result we are widely regarded as offering the best services and products on the market. So if you haven’t partnered with us yet, give us a call and join one of our free training courses.
*Based on a four bedroom detached property with 250mm loft insulation and filled cavity walls (as per minimum requirements for RHI eligibility) with electric storage heating. The income is worked out based on the RHI tariff of 7.3p/kWh for renewable heat generated from air source heat pumps with an average SPF (H4) of 2.45; and 18.8p/kWh for renewable heat generated from ground source heat pumps with an average SPF (H4) of 2.82, based on the results from the Energy Saving Trust’s heat pump study. The savings may change depending on future changing fuel prices, which are not accounted for in the calculations.