With the need for action to decarbonise the heating sector growing ever more pressing, the heat pump industry looks set to expand at pace. In Prime Minister Boris Johnson’s Ten Point Plan, released at the end of 2020, this was further cemented with a target of 600,000 heat pump installations a year.
Current± caught up with Igloo Energy’s CEO Matt Clemow to discuss the challenges still facing the industry, along with the potential.
While the government’s 600,000 a year by 2028 is a step in the right direction, what more could be done to incentivise a switch to heat pumps?
One fascinating stat when you start looking at even the number of people who are switching to green tariffs, is that 80% of people still heat their homes using some form of carbon fuel. And it's mad, but it's kind of 'I drive an EV' and we're like 'at home you're burning oil directly.' It’s sort of a jarring message.
I think in terms of what are the best things we should see from government, stability on direction is ultimately a critical element. Clearly, regulatory and subsidy-based schemes are great for getting industry out of the ground. We've had the RHI there for a while now, but in terms of what's going to happen after that, we talked about moving into a grant based scheme, but what level, when, how, how long will it run? And how will it change and degrade over time? The earlier we get certainty on those things, the more companies like Igloo will invest.
Because what we can't do is invest significant sums of money in terms of building the team, building the training, building facilities to be able to do this at scale. If we have no idea that the current subsidy, which helps support getting off the ground, evaporates in 2022, is there a replacement? What does it look like, how's it structured? So the sooner we can get that, I think that the more likelihood we'll then see companies like us investing more heavily.
Are there concerns around having enough qualified installers in the UK to man the heat pump rollout?
We've got a very well set up industry in the UK for gas boilers. We've got large suppliers, like the British Gases of this world, who have been doing it a long time. And you get this good level of training, knowledge and churn in those organisations, and then smaller companies fill the gaps.
Although heat pumps have been around for a long time, it has had some false starts in the UK. Getting the right quality of skill and understanding has been a challenge, how to do a basic install is relatively straightforward. A general heating engineer can do a basic install, it's about what happens when it goes wrong.
You have to have enough experience and learning though to do things like flow rate, which matter less on a gas boiler, because you've got the temperature going round. You've got to have high flow rates in heat pumps, which means you've got to be thinking about bends, you've got to be thinking about different things that all good heating engineers know about. But they don't necessarily have to plan for them quite as specifically as they do when you put heat pump in. So there is definitely a challenge in terms of finding experienced people today.
How we solve that, is we've got to build our own pipelines for educating and growing our own team. It's one of the reasons we chose to build a directly owned workforce and take that capability in-house. And we've got a fantastic set of engineers that are now leading that, and we will be investing further in the future.
I think it's something that will pick up and is going to be a challenge to the industry as a whole. But I think ultimately, as I look back, it's on us as industry players s to help solve for that problem. We should create training centres, we need to invest. That's for us to do.
What was the impact of the GHG, and in particular, it closing so early and so abruptly?
The Green Homes Grant Scheme did raise awareness of the importance of changing how we heat our homes. We saw hundreds of thousands of homeowners applying to access this fund, demonstrating that there’s clearly a strong appetite for people wanting to make their homes more sustainable.
Whilst the idea behind it was strong, the execution was poor. Those applying for it saw enormous delays in receiving their voucher which has resulted in very few people getting products, such as air source heat pumps, installed. Out of the hundreds of our customers who applied, only a handful were able to claim vouchers.
As a country, we have a target to reach net zero by 2050. To meet this, the government must help homeowners play their part by ensuring funds from future grants are issued in a timely manner and installers are brought on board early. From an industry perspective, we need to see more guidance and direction so we can create the necessary green jobs and run installations to target.
How much of a strain will the heat pumps put on the electricity network?
So clearly, heat pumps will increase the load in a consumers home. Most homes in the UK have somewhere between 60 and 100 amp electricity supplies. Within that most homes don't live anywhere near those limits.
I'll take my own home as an example, it's a four bedroom house that was previously on oil, our average electricity consumption peaked at probably about 30 amps, when all of the ovens are on and the lights are on and everything you can imagine was going.
I think the last mile connection between home and substations in itself can be dealt with within the current infrastructure without having to invest too much for too many properties. I think the issue more is then going to be about the local distribution network and the loads that suddenly get placed on that.
Heating generally reflects occupancy, so occupancy generally reflects peaks. So if we're home in the evening cooking food, it's going to link up with those. So I think there's definitely something around ensuring that both the technology going in and the controls that are going in, enables a decent level of monitoring and grid awareness.
While we may not all be there yet, from a total technology perspective, ensuring we know where these loads are and how that works from a grid perspective becomes increasingly important.
Is Igloo already looking at heat pumps as demand side response or do you think it's a couple of technology jumps down the line?
So it's something we're looking at already. The way I like to characterise demand response flexibility is there are some fantastic companies out there already, who have great technology, they just don't know what the problem is they've yet solved.
An individual customer has no problem with whether the grid is or isn't in balance, an individual customer has no issues with whether their local network is under strain or not, the only time they will have a problem with that is when it goes black. Otherwise, they actually don't care, it doesn't interrupt their lives, unless they happen to work for National Grid.
So for us, what we've really been looking at is: how do you make demand side response customer-centric? Because I think a lot of people have solved the control side already, and the aggregation of that control. But none of the parties that I've seen yet or spoken to have solved the "well, why on earth is a customer going to do this?"