- 8 Jun 2021
Attendees and apologies
- Mike Thornton, Energy Savings Trust (Chair)
- Lewis Shand Smith, Energy Consumers Commission
- Paul Jordan, Energy Systems Catapult
- Ian Rippin, Microgeneration Certification Scheme
- Rodney Ayre, Mitsubishi
- Clementine Cowton, Octopus
- Andrew Bruce, Scottish Futures Trust
- Helen Melone, Scottish Renewables
- Martyn Raine, SNIPEF
- Dave Pearson, Star Refrigeration
- Andrew Bissell, Sunamp
- Stewart Wilson, TIG
- Ross Armstrong, Warmworks
- Graeme Bruce, West Highland Housing Association
- Craig Frew
- Alastair Robertson
- Ian Cuthbert
- Peter Brearley
- Andy Mason
- Phil Hurley
- Caroline Bragg
Items and actions
Welcome and introductions
The Chair introduced the session. The minutes for the previous meeting had been shared beforehand and were accepted by the group.
A sub-group of the EAG met in March to discuss the manufacturing of heat pumps and other related products in Scotland. The minutes of this meeting were circulated to the whole group and those who attended accepted these.
Presentation from Lewis Shand Smith
A presentation was provided highlighting the following:
- the importance of decarbonising whilst meeting fuel poverty objectives
- the running costs of heat pumps are an essential factor in relation to fuel poverty
- there’s a significant issue with tariffs, the current options do not support heat decarbonisation
- building consumer awareness and trust is crucial
- negative consumer perception of heat pumps
- the importance of preparing consumers for distressed purchases
- social networks could be an important resource in making consumers aware and trustful of heat pumps
There was a discussion on the roll-out of smart meters in Scotland and whether the EAG may wish to comment on the pace of this, given smart meters can be an enabling factor in the deployment of heat pumps. It was commented that the rural roll-out has been poor, with some suppliers reluctant to undertake meter upgrades in very remote areas. Smart Energy GB will have data available on the roll-out. Lessons on consumer engagement could be taken from the smart meter roll-out.
The importance of installers as advocates for heat pumps was reiterated. MCS carried out some research with trade organisation OFTEC on the oil boiler installers within their membership to understand their views on switching to renewable heat. They found that common installer concerns included the financial sustainability of their business, if they have or could get sufficient skills and whether there was enough demand in the renewable heat sector.
A point was raised on considering the building stock and its consumers as different segments and where different business models can be applied. The easier segments should be tackled first, even if this equates to a small portion of total households, as this can be used as a base to build the supply chain. It’s important for consumers to know what government strategy is for their building type. Also, consumer confidence will grow as they see heat pumps become successfully established in other segments.
It was suggested that there should not be an assumption that the routes to market in the future will be the same as they are now, and that business model solutions for current barriers may not be relevant. For example, the roll-out of heat pumps may become more linked with business models in the EV charging sector.
There was a question raised on to what extent running costs of heat pumps could be reduced. It was suggested that utility suppliers could introduce initiatives that could make the cost of running a heat pump equivalent to that of a gas boiler. This is dependent in continued innovation in various areas, including the manufacturing process.
Presentation from Peter Brearley
The presentation included:
- the key actions within the draft Heat in Buildings Strategy
- background on Heat as a Service
- explanation of the devolution of consumer advocacy and the reservation of consumer protection to the UK Government
- the work of the Energy Consumers Commission, chaired by Lewis Shand Smith
Officials raised that the Renewable Energy Consumer Code (RECC) had been in contact to discuss the inaccuracy in estimating the efficiency of heat pumps. A large portion of complaints that RECC deals with involve the performance of heat pumps. RECC analysed metering data from the Domestic RHI and found a large portion of installations were not achieving a Seasonal Performance Factor of 2.5. However, MCS’ Heat Pump Working Group are working to improve the estimation process and MCS are reviewing their complaints process to make it more effective for consumers.
It was questioned whether manufacturers could take greater responsibility for quality assurance and consumer satisfaction. Manufacturers are growing ‘umbrellas’ of installation by contracting and sub-contracting, but it was suggested there is a place for both manufacturer and SME-led installations.
There was a discussion on Heat as a Service and whether having higher risk sit with the energy supplier was beneficial for consumers. Although this puts the onus on suppliers to ensure quality heat provision and makes them responsible for maintaining the system, it was pointed out that the costs of these risks will be passed on to consumers. Government needs to allow for competition between business models but they should broadly all encourage a good relationship between the customer and the supplier.
Consumer protection, advocacy and quality assurance
The importance of consumer protection within the decarbonisation of heat was emphasised. It was stated that the main pillars of consumer protection are regulation, enforcement, advocacy and advice– the Scottish Government can control some of these but not others.
A point was made that there needs to be a central organisation to provide protection and oversight for energy consumers. Currently, consumers using microgeneration products like heat pumps can be bounced between different organisations of responsibility, such as consumer codes, installer certifiers and trading standards because it is often unclear what the cause of a problem is. Consumer trust will grow if they are confident that they will receive full support from a single point of contact if something goes wrong. There was consensus in the group that a recommendation should be formed around this.
It was also commented that consumers require certainty that any tariffs beneficial to heat pump users will continue to be offered in the future. There is a need for regulated, low cost tariffs for heat pump users. It was pointed out that complex tariffs cannot be switched through comparison sites.
There was a discussion around what reasonable expectations a consumer should have for their heat pump and what warrants consumer protection action. It was decided that it’s important for consumers to have clarity of what the product should deliver and to receive the correct support if it does not do this.
Building awareness and trust
The point was made that when considering consumer buy-in of heat pumps, it’s important to remember that all consumer cannot be treated the same. Consumers are diverse with different experiences, risk profiles and behaviour.
It was discussed how active a role government should have in engaging consumers and encouraging them to switch to zero carbon options. Although government should play a role, businesses should also take responsibility. Government should not be over-prescriptive and allow conditions where businesses should plan how to get the best products to consumers at the most competitive cost. However, government should still support any consumers that the market does not work for.
Early-moving consumers can become key advocates for heat pumps which would be significant in building a positive reputation. Those who use electric cars from relatively new brands were used as an example, as they continue to be significant advocates despite experiencing some technical issues. However, it could also be true that bad consumer experience of one model of heat pump could create an unjust negative perception of the whole market.
It was pointed out that the car industry has a deep understanding of the end-user’s needs. The heat pump industry should aim to have a similarly deep knowledge base for its consumers. The Scottish Government could play a role to gather this understanding of consumers which can help enable the market.
It was suggested that consumers should be encouraged to try their current heating system at lower flow temperatures to understand how suitable their home is currently for a heat pump. This may identify a large number of households which do not require new emitters or insulation measures to be suitable for a heat pump.
Appearance, space and noise
There was agreement that these factors contribute to the negative perception of heat pumps. It was highlighted that the hydrogen sector has an advantage because these factors don’t apply to gas boilers (or at least people are already familiar with any flaws) and that this makes hydrogen seem a better option to consumers.
Innovation can continue to play an important role in making heat pumps more attractive to consumers and the Scottish Government should continue to push on innovation.
From BEIS Electrification of Heat project, there have not been complaints regarding noise because ultra-low noise heat pumps have been used. One key take away from the project so far is that consumers are concerned about the disruption during a heat pump installation if there has to be changes in pipework. However, these concerns can be eased by making the long-term benefits clear.
It was pointed out that this level of disruption is often not necessary, and tradespeople having the knowledge to know when it is necessary is important.
Heat as a Service (HaaS) was discussed as being beneficial in preparing consumers for the changeover to heat pumps. If there was to be uptake of HaaS with current conventional heating systems, it would then make it easier to change source to heat pumps because the service provider would be responsible for organising this.
It was agreed that a publicly available database of heat loss calculations would be valuable in preparing properties for conversion to heat pumps after their system has failed. This could also capture information on current heating appliances and their life-spans. Mass-surveying of properties could possibly be delivered by a central body in the public sector. The database would help show the supply chain what services are in-demand.
The Chair thanked those who have provided comments for doing so and encouraged further feedback from the group.
Officials will provide the final interim report to Ministers. They will then explore the possibility of having a meeting with the relevant Minister to discuss the drafted set of recommendations.
There was a short discussion on the difference in price between gas and electricity, and whether the EAG could suggest any solutions to this. It was suggested that if gas prices are increased for the mass market, there should be a lower tariff introduced for those in or at risk of being in fuel poverty.