Lucy Dixon spoke to Stiebel Eltron’s Mark McManus about why education is key, throughout the supply chain, to delivering decarbonised heating.
“People seeking to transition from fossils fuels to electric heating is, of course, music to our ears,” says Mark McManus, talking about the surge in households investigating alternative ways to heat their homes, thanks to rising prices and an increased awareness of both electric heating and renewable technology. Stiebel Eltron is well-placed to meet the demand, with a product range that includes heat recovery and ventilation, as well as energy management, heat pumps and electric heating systems.
The diversity means the opportunity to get into different sectors, Mark explains: “We don’t just manufacture renewable technologies, we also have a range of electric space and water heating solutions or, as we call them, home comforts. We sell air source heat pumps (ASHPs) and ground source heat pumps (GSHPs), and we go from a couple of kilowatts in heat output, right the way up to a megawatt.” That means solutions for standard households, as well as care homes, hotels, student accommodation, build-to-rent, multi occupancy residential schemes and more.
Mark adds: “For us, it’s about managing where the energy need is the greatest. We make sure that if there’s a requirement for heat or hot water, we get the right product in place.” The shift to making buildings more energy efficient will also open up further markets for Stiebel Eltron, Mark says. “When we’re tightening up properties, then ventilation has got to be considered. Airtightness and ventilation are big topics and a big opportunity for the company at the same time.”
The impact of the Boiler Upgrade Scheme
It’s already been a busy year for Stiebel Eltron, across all sectors, with peaks and troughs in some areas as funding streams end and begin. Mark says: “The first quarter was incredible – as the end of the Renewable Heat Incentive (RHI) approached, we saw incredible levels of sales.” The scramble to get projects installed under the old RHI meant there was an inevitable drop when it ended and was replaced by the Boiler Upgrade Scheme (BUS) in April, which offers £5k towards an ASHP installation and £6k for GSHP. Crucially, however, the voucher is paid out once the system is commissioned meaning that somebody – either the homeowner or the installer – has to pay out and wait to be reimbursed.
It is therefore no surprise that the introduction of BUS certainly didn’t take off where RHI had left off, with many installers sceptical about another scheme, Mark says: “We’ve had so many false dawns and so many initiatives that some of these installers have had their fingers burned many times after investing a lot of time and money into some of these incentive schemes, with little or no return. So you can understand that people are a little hesitant.”
The officials running BUS were not as organised as they should have been either, says Mark. “The problem initially was they just didn’t have all their ducks in a row, and they didn’t have the mechanisms in place to be able to give the vouchers to the installers. You’ve got to be a very big company to be able to have the cash flow to support that. If you’re doing a couple of installations per week, that’s a lot of money that these guys could potentially be spending and then waiting for the vouchers. There are still a lot of complaints from installers, saying it’s not easy to access the vouchers – speeding up that process is essential if we’re going to get the BUS to a broader audience.”
Upskilling the heat pump supply chain
Education will also be key to getting BUS, and heat pumps more generally, to a wider audience, and it’s something Stiebel Eltron is focusing on, with investment in upskilling that has included a new training centre for installers that opened recently. Mark says: “We focus on the installer and deliver a suite of services that helps them, recognising that installers are usually relatively small businesses and often find it very difficult to travel to training.”
The services include online modules for those just dipping their toe into heat pumps, as well as in-person training and extended training for those with more experience. For specifiers Stiebel Eltron offers free-of-charge CPD presentations and has a team of regional specification engineers to work on large projects such as hotels, apartment blocks or care homes. Mark explains: “We’ll go along to the project, do all the heat loss calculations, and then we’ll provide them a suitable solution for their requirements, based on where the energy need is the greatest.”
Mark adds: “There’s a huge amount of education required and we have to spend a lot of time as manufacturers, educating every part of the supply chain. We’re talking to the architect, the consultant, the developer, the contractor, the homeowner – and we’re talking about how the product works, how it should be installed, how it should be utilised.” Mark compares this to the gas boiler industry, where many customers will know what to expect, at a basic level, including the likely cost, the installation process and time needed. “For heat pumps or other renewables, that’s not the case and we have to educate and train people. We are putting in a lot of effort to help installers from the gas and the oil sectors to migrate and make that transition.”
Reducing dependence on fossil fuels
With the sudden soar in energy costs the audience – whether installers, specifiers or consumers – is increasingly receptive to these discussions. It also helps that it’s an audience that Stiebel Eltron already works with, so they can add renewable technologies into the conversations they’re already having. “When we’re looking at city centre apartments, for example, historically, they’ve always had an all-electric solution anyway, but now people are really interested in how they can reduce running costs, and can they decarbonise at the same time. The same for residential care homes, which is an important sector for us now, and we have ground source heat pumps capable of doing 100-bed care homes. There is a drive to decarbonise those types of buildings reducing dependence on fossil fuels, and our customers are very interested – with the way the energy prices are and the performance of the heat pump, then the business model stacks up for them.”
Electric heating, including heat pumps, would become even more attractive if the price of electricity wasn’t linked to the price of gas. Mark says: “The wholesale price of gas has increased dramatically because of what’s happening in Ukraine, but the wholesale price of electricity doesn’t need to follow what’s happening with gas. We’ve got a perfect storm to help people migrate from fossil fuels into electric heating and hopefully renewables with heat pumps. We need to incentivise people, so this is definitely something that needs to be looked at by government.”
Other government action Mark would like to see is on education, as he says that the industry is being left to spread the messages to end consumers. He says: “The government don’t have enough of a budget to communicate about the boiler upgrade scheme, so people find out from manufacturers, but really it’s a message that the government should be pushing to a broader audience as well.”
Business opportunities
When you consider the potential for decarbonising heating and, as Mark says, ASHPs “lending themselves particularly well to the domestic retrofit sector”, the opportunities for Stiebel Eltron are clear.
“That’s what our focus is – how can we sell more air source heat pumps into the retrofit market with more business and more market share at the same time? We’re not just about the product itself, we’re about managing that transition for the installers. And we’re improving the ASHPs, the technology, the global warming potential (GWP) of the refrigerant, but also making sure the product fits into UK housing stock – we have some of the smallest new builder homes of anywhere in the world.”
For more information visit stiebel-eltron.co.uk
