Trevor Harvey, chief executive of Stelrad, Europe’s largest radiator manufacturer, regards the Spring Budget as a missed opportunity, accusing the government of thinking too short-term about the significance of energy efficiency by focusing largely on offsetting the upfront costs of heat pumps.
He said: “The government should be incentivising homeowners when it comes to practical measures such as insulating their homes more effectively and installing more modern and efficient radiators.”
More effective plan needed
“Short term price guarantees, alongside encouraging the mass adoption of heat pumps which aren’t even suitable for the vast majority of homes, isn’t really a coherent strategy that will help the country reduce its heating bills.”
“When you layer in the fact that heating in UK homes produces around 17 per cent of the country’s greenhouse gas emissions, it’s clear we need a more effective plan to help the country’s houses become both more efficient and less carbon intensive.”
Heat pumps only part of the solution
Two days ahead of the budget, Stelrad had unveiled bumper full-year results, including a revenue increase of 14.6 per to £312.1m and an adjusted profit increase of 12.9 per cent to £24.3m.
With the company announcing an eight-fold increase in total dividends per share to 7.64p, Harvey called for an expansion of government heating plans to include home energy efficiency improvements describing the Boiler Upgrade Scheme as “too narrow in its ambitions” and described heat pumps as “only one part of the solution”.
“This needs to be a government wide initiative about decarbonising the home, not just the gas boiler. It needs to the need to improve the fabric of the home – they need to look at the entire heating system,” he said.
Role to play
Newcastle-based Stelrad regards its products as central to how people across Europe will cope with rising energy costs as Harvey commented: “The energy crisis and decarbonisation are driving awareness of our products and services. Our purpose is to heat homes sustainably and we have an important role to play in facilitating the transition to low and zero carbon heating systems.
“Rising energy costs are sharpening consumers’ focus on more energy efficient heating solutions and this, combined with the ongoing decarbonisation agenda is expected to drive increased long-term demand for our products.”
Despite the company’s record results Harvey calls for more to be done when it comes to decarbonising the home arguing that while “heat pumps heat pumps appear to be the winning technology when it comes to zero carbon heat sources,” the government has to match installation plans with commitments for upgrading the efficiency of people’s homes.
He said: “I think the scheme needs to be broadened in terms of the areas that it supports – there needs to be more funding and a significant increase in the amount of education to households from the government.
“This is more than one product specific. The government needs to embark upon a more effective communication strategy supported by the industry,” Harvey argued, also calling for public information campaigns to convince more people to embrace the new technology.
BUS failing to take off
A government spokesperson said: “Despite it being a challenging year for the energy sector, the Boiler Upgrade Scheme has paid out £38.3m of vouchers to installers so far. Industry has reacted positively to the scheme during its first year, with suppliers developing competitive offers alongside the grant.
“We’ve recently launched a targeted marketing campaign to increase public awareness, with the scheme also being part of the government’s wider energy efficiency awareness campaign.”
However, the government has found it difficult to convince homeowners to embrace the new technology.
As of January, just a third of the £450m funding pot has been allocated, with the House of Lords environment and climate change committee warning that the project is “seriously failing.”
Government ambitions for all properties to have an Energy Performance Certificate of C – which is average – or higher, by 2035, also look challenging. Despite home energy efficiency being essential to deliver lower bills and maximise the value of heat pump installations, only 40 per cent of UK homes are estimated to have an EPC rating of C or above.
Well-placed to deliver on decarbonisation and energy efficiency
Looking ahead Harvey commented: “I’m very pleased to be recording a record financial performance in 2022 thanks to the resilience of our business model combined with the hard work of our employees, the strength of our product offering, the quality of our customer relationships and our relentless approach to operational improvements across the firm.
“While the market backdrop is not easy, as a business with a near 100-year track record, we have successfully navigated previous market downturns and our current management team has the experience and ability to deliver ongoing outperformance despite the challenging macroeconomic environment.
“Longer-term, the twin drivers of decarbonisation and energy efficient heating remain firmly in place, and we remain well-placed to deliver value for stakeholders.”