Posted by: @editor

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That brings me back to the subject of this thread. I want clearer quotations, less duplicated work and a more competent installer base capable of delivering good systems efficiently, rather than a choice between expensive bespoke projects and cheaper installations with important work omitted. Equally so, I've seen some quotes recently with insane amounts charged for labour for standard-ish installs. 

Productize and simplify.  The Ofgem standard house consumes 11.5MWh/year so is <6kW.  This presumably represents the majority.   Fit a 6kW (or even 7kW) pump plus UVC if no existing cylinder, turn the flow temp up to whatever is necessary to make it work, monitor.  Then offer rad upgrades as an added value once you know whats actually needed and whether there is actually a business case (in many cases there wont be). 

Its basically what Heat Geek are doing with zero disrupt, but charging a premium, because they can, there arent enough in the market and they are shouldering some risk (as we have discussed elesehwere).   Or automate the survey.  I might even argue for putting mechanical TRVs on half the rads, there is evidence that these operate very well as automated flow rate controllers (ie in  an analogue not digital fashion).  Teach ordinary plumbers how to do this (its not that much more difficult than fitting a boiler) but don't let them near more complex jobs.  Scrap MCS and instead have some actual consumer protection.  Don't ever discuss buffers etc. again.  

This is doable but needs some out of the box thinking, imagination and production engineering (the above is an outline not a complete recipe).  However there are vested interests who will argue against, just like they have argued against plug in solar and plug in batteries.  They probably wouldn't actually lose out because there is enough complex stuff out there to keep them busy, but of course they might so oppose.  The current febrile political environment makes it even more difficult.  

Another question worth asking is should the default install be Vaillant (>4K) or Samsung Gen 6 plus a decent controller (<2.5K) or even the LG split combi which includes the DHW tank for just £703 (ODU)+1371 (IDU inc DHW)?  Vaillant is very nice but, from all accounts, Samsung Gen 6 does the job.

That said there is at least one government sponsored programme on rapid deployment, there may be others, so there may well be people working on this.  If not there should be.  Personally I think they should be required to include at least one industry outsider capable of intelligently asking awkward questions otherwise there is a risk that groupthink sets in.

Heresy?  Maybe, or maybe we should consider whether we actually now know enough, thanks to the early adopters, that we can change the model radically, at least for a sizeable proportion of the market, and think out of the box.  Heat Geek obviously think so.

Plus all the A2A stuff for smaller properties that are tolerably open plan.

Oh and what about some innovative financing/risk management insurance.  We are supposedly world leaders in financial services*, surely we could come up with some products that take the 'sting' out of replacing a failed gas boiler if instead you go for a heat pump.  Government covers some of the 'profit' element.

* although IMHO parts of that industry are as bad as parts of the contruction industry

@editor 

My bad making a quick but incorrect equivalence between gross annual house hold income and being a higher rate tax payer. Rather £52000 places a household at around the 70-75% percentile in terms of household income, i.e. more income than 70 to 75% of UK households. Hence the point that over 50% of BUS grant recipients are by some measure reasonably well off, and over 50% have larger houses. (Note, that is not saying anything about the overlap or otherwise between the income and housing categories).

Thanks for also spotting the superfluous "not", I'd flipped the percentage and negated the text. it should indeed have read "Modelling produced a lower percentage of 26% of the upgrades that would have taken place without the BUS grant."

The point that I was trying, but perhaps failing to make, is that there is somewhat of a gap in the middle. Those with low incomes (about 20% of households) are well served by other schemes, while the 25-30% of households with annual gross income of over £52000 are over-represented as BUS grant recipients, making up more than 50% of recipients, but at most 30% of households. Those in the middle, approximately 50% of all households, on annual gross incomes of £20800 to £52000 make up 37% of BUS grant recipients, hence they are under-represented.

There is an argument that the BUS grant needs to go to whoever is willing to take on a upgrade to allow the nascent market to evolve, and those most willing to be early adopters are likely those with the money to spend on any additions that happen to be required, or any fixes that might be needed later. Still, the targeting of the grant could perhaps be better for households on middle incomes.

You make a good point about the low level of additionality for self-builds at just 48%. In that case around half of the BUS grant recipients would have gone ahead anyway without the grant, making the cost in public money per additional heat pump installed around £15000 for self builds, which is questionable value.

Reference to the actual goal of carbon reduction would be an effective way to scale the grant. If heat loss calculations were accurate (we can all laugh at that one) then that would work well as a proxy for the amount of CO2 emissions that could be saved and hence the level of grant that would be appropriate. A high heat loss property would be assessed and a set of cost effective upgrades designed to save both CO2 emissions and energy. This would then translate into a grant covering a significant proportion of the costs of additional insulation, radiator upgrades, and a heat pump install. The public money for the grant would be spent in direct proportion to the CO2 savings that it would create, which is ideal from an economic / best use of subsidy perspective.

One thing I don't fully understand about the current grant is the rationale for it being a fixed amount. In some other European countries, Germany for example, the equivalent grant pays a percentage of the costs. Arguably, this works as a rough proxy for CO2 emissions saving (bigger systems are required when CO2 emissions are high and get a bigger grant). A proportionate grant results in better due-diligence by householders as it somewhat ameliorates the race to the bottom in the sense that £8000, £9000, and £10000 installs keep that ratio of costs to the householder, rather than the cheapest appearing to be a third or a fifth of the price of the others, and hence opening up a trap of easy selection based on apparent very low cost (£500) without necessarily proper consideration of the differences in quality.

A summary of the rules in Germany is as follows:

In addition, I'd like to see the Govt. take the very large costs of electricity grid upgrades that we face over the next 5-10 years out of energy prices and into general taxation. That would help close the spark gap, which would go along way to making heat pumps a viable technology for the majority. With a smaller spark gap, Govt. funding could be re-deployed as long term loans to cover the upfront capital costs. 

I'm not sure any of that would necessarily help with clearer quotations, less duplicated work and a more competent installer base capable of delivering good systems efficiently, however, markets do seem to work better when people are spending their own money rather than someone else's. Somehow there is less room for cowboys and quality and reputation begin to matter more.

Posted by: @rob-of-york

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...

The point that I was trying, but perhaps failing to make, is that there is somewhat of a gap in the middle. Those with low incomes (about 20% of households) are well served by other schemes, while the 25-30% of households with annual gross income of over £52000 are over-represented as BUS grant recipients, making up more than 50% of recipients, but at most 30% of households. Those in the middle, approximately 50% of all households, on annual gross incomes of £20800 to £52000 make up 37% of BUS grant recipients, hence they are under-represented.

...

To avoid any misunderstandings, can I just clarify that you mean "there are other schemes to cover those with low incomes, irrespective of how well the actually deliver" rather than any suggestion those schemes do or don't serve that demographic well?

The ECO4 scheme, for instance, is targeted directly at those with lower incomes but we've had a lot of people posting that the installations funded by that scheme often aren't fit for purpose. As far as I understand it, your point is about the lack of funding directed towards a certain demographic, not about the quality of what's delivered as a result of any government funding.

@jamespa, I’m with you on making straightforward installations genuinely straightforward, but I think the crucial bit of that model is deciding which houses qualify, rather than letting a national annual consumption figure stand in for assessing the individual property. I’d happily consider less expensive equipment and a repeatable installation package, provided somebody has established that it will deliver the comfort we’ve agreed. The part I’d also want nailed down is who carries the risk in "monitor, then upgrade". If a radiator change would improve efficiency but never recover its cost, leaving it alone could be entirely sensible... if it is necessary to make the bedroom comfortably warm, that shouldn’t arrive later as an optional extra. T

@rob-of-york, I think the gap you’re describing deserves investigation too, although I’d be tempted keep its precise size provisional until the income comparisons are like for like. What stands out to me is that 28% of recipients found the remaining installation costs difficult to pay even with the grant, and those are people who actually made it through the process. To me, that suggests we should look at available savings and financial resilience alongside income, because being able to afford the normal monthly bills isn’t the same as having several thousand pounds available for a heating conversion.

@majordennisbloodnok, agreed. Having a scheme aimed at a particular income group is not the same as that group being well served. There’s also an important connection between affordability and protection here where a household that cannot fund the installation is unlikely to have much spare money for investigating faults or paying to put things right afterwards. That’s also why I’m cautious about the suggestion that spending your own money naturally keeps the cowboys out. It doesn't. Whatever the funding route, I’d want the same clear responsibility for delivering a warm home and correcting defective work... not stronger protection reserved for those who can afford to fight for it.

Turbulent times ahead on so many different fronts.

Posted by: @majordennisbloodnok

"there are other schemes to cover those with low incomes, irrespective of how well the actually deliver" 

As far as I understand it, your point is about the lack of funding directed towards a certain demographic, not about the quality of what's delivered as a result of any government funding.

Exactly that!

Posted by: @editor

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but I think the crucial bit of that model is deciding which houses qualify, rather than letting a national annual consumption figure stand in for assessing the individual property.

Absolutely agreed.  I quoted the national figure as evidence that there are likely to be a large number of houses in this category (and thus its worth considering), not as a qualification criterion.  The criteria (and, more importantly, how assess them ) need development as part of the production engineering I referred to.

Posted by: @editor

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I’d happily consider less expensive equipment and a repeatable installation package, provided somebody has established that it will deliver the comfort we’ve agreed.

Agreed, again part of production engineering.

ECO4 is classic British idiocy, "save" money by requiring stuff goes to the cheapest supplier even if their previous experience was selling water damaged umbrellas and cut all the people who would have kept it honest to the bone. It's endemic in everything whether it's people dying in burning tower blocks or new homes that are not fit to live in (the on site saying btw is "do your best, foam the rest"). Quite honestly given a lot of new builds I'd say that saying was aspirational at best.

There's a fix for ECO4, it's called building inspectors.

For the general costing there's a need to understand the macro effects that drive cost. Those are often not the ones people think. For example in the USA there's good evidence that the fact there is an AHJ for every tiny little town each with different rules and no "permitted development" standard is actually probably more significantly impacting solar costs than tariffs.

UK heatpump costs are expensive for a load of reasons

- Choice of equipment

- Properties being converted

- Regulatory bull - all the crap about DNO notification for heatpumps but not for a kiln etc

- Lack of standardisation - both of equipment and houses

- Lack of bulk ownership by the state of identical properties. The ghost of Thatcher is still driving heatpump conversion costs up because councils are no longer going down a road of identical council owned houses converting them all the same recipe one by one. Instead 138 landlords own them, 96 of them are foreign absentees, none of them care and every one will hire someone different to do the same calcs when eventually forced to do the conversion, or just kick out the tenants and sell up.

- The MCS regulatory overheads are huge. If we had to get rid of something to cut the costs I'd start with the MCS 😉

- The extensive restrictions on who can do it drive up costs and suck in cowboys

- Lack of expertise and people for air/water

- Lack of people for air/air

- Our regulations for heat networks and even building scale heat are amazingly broken, even our electricity regs for it are a total mess. Worse still the taxman is fighting tooth and nail to stop then getting fixed (eg with communal house car chargers and VAT)

and I'm sure a load more too

A chunk of it ultimately is about solving some hardware problems and figuring out how to make heatpumps installable by any electrician, builder, and the like. Some of that is getting expertise into the space, some of it is getting heatpumps to be idiot proof. The magic goal has to be a proper split system that doesn't require an F gas cert or a lot of understanding so that anyone who can drill holes can install it.

If you want the costs low then you need a regime where

- Anyone can install kit within reason (maximise installers, minimise the ability to charge a premium)

- Calculations can be guessed/tweaked/skipped (easier with some types than others) because the cost of all the magic numbers exceeds the cost of a slightly bigger system

- Installers don''t have to do reams of paperwork and prove they've done reams of heat loss studies etc

- Regulations don't get in the way in most situations. Odd ones is fine. The number of listed buildings is tiny for example so even if we left them on gas a bit longer it's not a big deal.

- Regulations are enforced by council building inspection regimes - with funding -so that the roof foamers, ECO4 mushroom house purveyors and the like go somewhere else

- Owners mostly pick their installer/kit (they'll do lots of effectively free to the state legwork to avoid being scammed)

If I can turn up drill a few holes and shove some units into a building and all I need is one of the team to be qualified to do the R290 work and a generic sparky for the wiring and to file some basic building regs bits then it can be done. If you want it cheap then the army of people to file building reg paperwork, MCS compliance, MCS insurance, MCS training, heat surveys, equipment on an approved list, fights with the DNO all the other stuff like that has to go.

Posted by: @etchedpixels

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Regulatory bull - all the crap about DNO notification for heatpumps but not for a kiln etc

I've ripped out over 11kw of storage and panel heaters and replaced them with a 6kw HP which uses quite a bit less. But I still have to notify!

A drum that @rob-of-york has (rightly, in my opinion) been banging across several threads is the one of trying to make the BUS grant or any successor to it tackle the "what are we trying to achieve" rather than "what tools do we want to use". This has got me wondering a bit.

The argument we hear again and again is that swapping a new boiler for an old one is perhaps a couple of thousand pounds whereas quotes for moving to an air source heat pump are often five times that or more before any grant. The fact that moving from a high flow temperature design to a low temperature system may well involve significant system redesign is undeniable. So is, I believe, the fact that this disruption is often (although by no means always) used by installers to disguise some pretty significant inflating of their quotes to take maximum advantage of the BUS grant whilst still giving the customer a realistic enough net cost to change.

What I'm wondering is how feasible it would be to allow a grant to help with the high flow temp --> low flow temp system change. In other words, a home owner gets their system reconfigured to run at flow temp of 45 or 50 degrees max and sees if the home will still stay comfortable. If not, a professional survey is carried out to work out what changes are necessary to the system to allow for the lower flow temperature and a grant is made available to help with that work (preferably with some mechanism that falls short of means testing but nonetheless skews the help towards those less able to afford the work). That then leaves the home owner with a system that could work equally well with a boiler or an air to water heat pump bolted onto it and so the transition from fossil fuel heating to renewable heating is then a like for like choice with directly comparable costs.

Am I missing something?

I don't think you are - other than the idea that grants are going to help. Spray Foam Sam the cowboy is going to be as useless at that and just as keen to prey on elderly people by getting paid to turn their heating down and do a runner.

Now handing a fairly small chunk more cash to folks Age Concern, local energy saving groups and the like and positioning it as a cost of living exercise is another matter. You'd then mostly get sensible people helping the confused with the existing "turn down the boiler" message and able to come in, photograph the old settings for the customer, set the heating down a bit, and come back if it's getting too cold. Many of the folks involved in trying to get that message out already have the rest that goes with it - the spiel on efficiency, checklists on draughts and insulation, eligibility guidance on grants and loans etc.

For a lot of people a big chunk of it is the trust element. They've already learned not to trust government schemes and ECO4 bodge jobbers so they aren't going to let randoms in touting grants, in fact they are more likely to set the dog on them.

I know what you mean, @etchedpixels. However, the big difference is that the steps required to make the system low temp ready are more straightforward to implement in steps (if necessary) and test. In the same way you might prefer to upgrade your windows room by room as funds permit, there's an element of that possible with radiators. Obviously, the core pipework might well need to be addressed in one go but that's the reason I'd be looking at a professional survey being part of the process. Perhaps more importantly, if someone upgrades the radiators in one room, that room should almost immediately feel warm enough at low flow temperatures and if it doesn't there's still the option to turn the temperature back up towards its previous level. The cowboy installer will always exist but I'd've thought this would leave fewer places for him or her to hide and expose shoddy work much quicker - possibly whilst they're still on site.

As for grants, I'm not suggesting the grant is the answer. However, I do believe the transition needs to be made by everyone and not everyone can afford it as easily. By breaking down the work into manageable chunks and checking each has delivered what it was supposed to, any help could more effectively be withheld from those not turning in an acceptable quality of work. Your comments about sensible people helping the confused is another way of more intelligently targeting where the money goes and how it is used, and may even be a better alternative.

Posted by: @majordennisbloodnok

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What I'm wondering is how feasible it would be to allow a grant to help with the high flow temp --> low flow temp system change. In other words, a home owner gets their system reconfigured to run at flow temp of 45 or 50 degrees max and sees if the home will still stay comfortable. If not, a professional survey is carried out to work out what changes are necessary to the system to allow for the lower flow temperature and a grant is made available to help with that work (preferably with some mechanism that falls short of means testing but nonetheless skews the help towards those less able to afford the work). That then leaves the home owner with a system that could work equally well with a boiler or an air to water heat pump bolted onto it and so the transition from fossil fuel heating to renewable heating is then a like for like choice with directly comparable costs.

Am I missing something?

The principle is sound and indeed its what I did.  I think the challenge is making it a practical commercial proposition!