With the domestic market for heat pumps remaining sluggish, heat pump specialist Bob Long looks at the merits of focusing greater business attention on commercial-sized installs
Having waited patiently along with many others for the arrival of the RHI for heat pumps, I was gravely disappointed by the outcome. The reception given to the RHI by an overripe and desperate audience was euphoric for a very short period, only to realise that the incentives available to biomass boilers took away any meaningful desire to own a heat pump.
The relatively low level of financial support through RHI, coupled with a simultaneous government initiative to give away gas boilers in certain sectors, means the uptake of heat pump technology continues to be quite lethargic.
Although changes to building codes are well met by employing heat pump technology, the volume uptake of heat pumps for domestic users in general, is still quite slow, and currently viewed by many companies as too small a return to warrant the marketing effort.
To compound these negatives, too many companies chasing too little work has in many instances reduced the cost of installation to a level where contractors cannot afford to honour guarantees, or provide any meaningful level of customer aftercare. Not to mention the number of companies who conveniently go out of business!
This situation has to change, as the UK continues to address carbon reduction issues, and more electrical energy is fed into our national grid from a growing mix of renewable resources.
For the heat pump industry, the question must be; Is this going to happen fast enough to support the basic economic needs of survival?
The industry is further hampered by stringent criteria to be met, with eligibility to benefit from a heat pump through the RHI often difficult to achieve and, in many instances, NOT included in the advice options within a domestic Green Deal survey.
From an installer’s point of view, the ongoing cost to maintain their position as RHI accredited is a significant financial burden, made difficult by low levels of commercial activity and the high cost annual accreditation fees.
A company fighting to stay solvent often leads to misrepresentation of economic returns and rewards, by an over-zealous sales force, trying to secure an order in a difficult market.
Clearly, in a renewables industry featuring electricity as the common denominator, the heat pump industry must eventually flourish. A heat pump remains the most economical method of deriving thermal energy from electrical power.
Until then, it may be worth looking at different sectors where the commercial returns are sufficiently attractive without government red tape and financial assistance.
Air and water source heat pumps can collect energy from many sources and commercial opportunities can be plentiful.
For example, an air source heat pump benefitting from warm ventilation air from a small bakery could provide all the hot water required at a fraction of the cost of an immersion heater and boiler, or a water to water heat pump could capture valuable energy from waste water.
These examples do require a small degree of engineering but there are numerous companies capable of producing designs, and installation thereafter is generally quite straight forward.
Equipment purchases to reduce carbon emissions in the commercial sector are often rewarded by reduced taxation, but obviously a question to ask your accountant.
Although the domestic market in UK is potentially massive with over 22 million homes, until the RHI makes heat pump ownership as financially interesting as the early days of PV, an alternative market in the non-domestic sector could be an interim answer to commercial survival.