Consortium to pilot heat and energy as a service

UK: The Department for Energy Security & Net Zero (DESNZ) has awarded funding to an E.ON-led consortium to pilot heat and energy as a service.

In a bid to strengthen and enhance the UK’s emerging green finance market, E.ON has partnered with Energy Systems Catapult and Heatio to develop two green finance products to promote greater uptake of energy efficiency and low carbon heating measures.

Research by Energy Systems Catapult has highlighted how UK consumers were often put off by the upfront capital cost and the perceived lifetime running cost of a low carbon heating solution. Heat as a Service would remove the upfront costs associated with installing, operating, and repairing low carbon heating solutions. Initial costs would be covered by a financial provider and paid back by the consumer over an agreed long-term period.

The consortium’s development and piloting of HaaS will focus on the removal of upfront costs associated with the purchase and installation of a heat pump. A wraparound care package to include ongoing optimisation, servicing, maintenance, and breakdown support, will be developed as part of the HaaS project.

To further enhance the offering available to consumers, the consortium will develop a series of simple ’heat packages‘ to make HaaS an attractive offering for customers, helping to encourage their adoption and to act as a replicable model throughout the UK energy market.

The E.ON-led consortium will examine how the pairing of power purchasing agreements (PPAs) and innovative grid services can remove the upfront costs faced by consumers when considering a heat pump, solar PV, or battery storage, while simultaneously lowering the household’s energy costs by integrating preferential energy tariffs.

The aim of rolling out both HaaS and EaaS is to spread the cost of low carbon energy and heating solutions over a significant contract period to deliver savings for consumers. The project aims to better understand how HaaS and EaaS could accelerate the adoption of alternative heat and energy sources by opening the market up to those on lower incomes and no available capital.