In this instalment in our unmetered series, we’ll be looking at Heat Network Regulations (HNR) exempt class buildings with a particular interest towards sheltered housing. Because the Heat Network Regulations (HNR), do not require heat meters to be installed in any buildings falling into the exempt class, sheltered housing has been overlooked as requiring heat meters to be installed, and often remains on a flat rate charging regime (a fixed weekly charge regardless of how much they use).

In this post, we pose a series of questions: 

• Is flat rate charging driving positive energy use behaviours by residents?
• Does flat rate charging remove autonomy from residents, who can manage their consumption?
• Can local authorities afford to subsidise flat rate charging in their buildings with heat networks in a period of gas and climate crisis? 
• Is flat rate charging consistent with a decarbonisation agenda?  
• Can innovation answer any of these questions? 

We hope that by considering each of these questions and, using our 35+ years of heat network experience to answer them, we can demonstrate with evidence that the answer to all is that heat meters can provide a solution to the problem they pose. 

Is flat rate charging driving positive energy use behaviours from residents? 

In our experience, the answer to this question is simply, no. Flat rate charging doesn’t drive careful and considerate usage of heating from residents, as it removes any incentive for them to do so. Not having heat meters installed, means that some residents will have their heating on all the time, and some will behave as if they are being charged based on their usage, but both will end up paying the same bill – which is obviously unfair! 

We have seen instances where we have been installing meters into general needs sections of social housing developments, and the sheltered housing areas have had the windows open in the middle of winter, obviously using heat far more than is required to adequately heat the home. Excessive consumption is increased by having no incentive or means to control the heating when it is not needed or indeed turning the thermostat down. In our recent webinar, we reviewed the amount of excess gas being used in unmetered schemes and demonstrated that up to 50% more gas is used in unmetered schemes compared to when heat meters are installed.  

Why is this acceptable for sheltered housing?  

In short, it’s not. Local Authorities and Housing Associations responsible for sheltered housing should be putting measures in place to control heat and prevent heat wastage, especially in the current context of both energy and environmental crises. But the residents aren’t to blame as it is the natural human tendency to use what you can if there is no financial incentive not to do so. Those responsible for these heat networks should ensure that they have fully understood the benefits of metering, the intention of the HNR and then properly examined the feasibility of installing meters. We have many clients who have proved, by installing heat meters into their sheltered housing schemes, that residents in sheltered housing are more than capable of managing their heat consumption. Not installing heat meters essentially removes the autonomy of residents from managing consumption, and that the benefits to both residents and operators far outweigh the negatives. Residents when metered will use what they need, not what they can, this will bring down consumption and cost dramatically meaning very few if any will be paying more than the flat rate charges. One such example of this from our own experience, is our work with Sheffield City Council, with residents of the heat network into which the heat meters were installed, seeing their bills cut by up to 50%, can heat network operators really afford to not be installing meters with savings like this achievable?  

Can local authorities afford to subsidise flat rate charging in a period of gas and climate crisis? 

Flat-rate charging was never truly an affordable model for any Local Authority or Housing Association, especially when metering could have reduced costs by half. It’s important to remember that this was true at a gas price of 2p per kWh, and impossible to justify at current energy crises prices of 10p per kWh (or as I write even higher!). Indeed, at a time when taxpayer funded services such as schools and social care are under immense pressure, the argument could be made that it is fiscally irresponsible to subsidise bills that are on flat rate charged heat networks where residents are using twice what they need. 

Aside from the finances of such an arrangement, there is the question of how compatible with decarbonisation and green agendas is flat rate charging? Many councils across the country have declared climate emergencies but continue to operate flat rate charging in their sheltered housing. Metering feasible communal heat networks represents a much cheaper investment towards decarbonisation, which at current prices would pay itself in a year or less, as shown in our previous instalment. Compared to large-scale and high-cost civil projects often embarked on by local authorities, metering installation has little embedded carbon and will provides a long-term reduction in carbon consumption and removes the need for subsidisation involved in flat-rate charging. 

Heat metering can drive innovation 

At Switch2, we believe that heat metering, where it is cost effective to do so, should always be done. We have seen the benefits to schemes repeated far too often to draw any other conclusion that heat metering is the driving force behind the much-needed modernisation and innovation required by UK heat networks. 

Heat meters provide consumption data, which is the only way to understand where the inefficiencies and poor controls are on your heat network. Improving efficiency and reducing heat losses should be the goal of heat network operators and implementing a data-driven approach to maintenance is the best way to achieve this.  

Installing heat meters in sheltered housing has been a concern for Local Authorities and Housing Associations, however, heat meter data can inform network managers of at-risk residents’ usage, which can be used as a trigger for welfare checks. 

Climate conscious, cost effective 

As we discussed earlier, flat rate charging doesn’t drive careful and considerate use of heat, costs far more than is necessary and consequently unnecessary levels of carbon are released into the environment. At current prices any organisation responsible for heat networks cannot continue subsidising the bills flat rate charged schemes are generating. The installation of heat meters will reduce gas bills by up to 50%, because residents will now have a cost linked to their usage and so they will behave differently. The payback on this investment can be less than a year, depending on gas price and scheme efficiency. This demonstrates that metering really is a silver-bullet – removing subsidisation costs, cutting carbon, and paying for themselves. 

Future innovations 

Heat meters will also be central to future innovation in UK heat networks. One of the key benefits that we see from removing the subsidisation model of sheltered housing, is that it frees up resource to care for those who need it most. While many sheltered housing residents can manage their usage, some cannot, and some need specialist and specific care. We see the potential for specialist tariffs, that do not penalise high usage and have mechanisms to support those who need high levels of heat for medical reasons should be considered. Heat networks can be configured to deliver such tariffs, but this would only be possible where heat meters had been installed. 

Heat metering isn’t just about compliance, it can be a tool to improve resident experience, increase heat network efficiency, reduce the burden of flat rate charges on public finances, and be a contributor to wider decarbonisation and net zero goals.  

Heat metering shouldn’t be viewed as a choice for operators, but an obligation to residents. 

If you want help with your heat metering installation, no matter whether you’re just starting your project, need heat meters supplied, installed or managed, get in touch with us now and see how we can help.