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Why fixed heating charges are not fair

David Lewis, Managing Director of Ista Energy Solutions explains why all residents will want to be metered for their heating.

David Lewis, Managing Director, ista Energy Solutions

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At present there are hundreds of thousands of homes in the UK that are provided with heating from communal heating systems. In most of these cases the costs for the heat and hot water supplied is shared between the individual dwellings, often as part of the service charges. Therefore, none of the tenants is paying for what they consume or has any incentive to manage their consumption.

To examine this variation ista worked with a leading London-based social housing provider and installed Heat Cost Allocators to the radiators in seven trial flats to assess the variation in consumption and patterns of use. Data has been continuously collected from these units for over three years and the significant differences is use are clearly seen of the consumption profile graphs. There was no change the way in which heating was charged and hence no incentive for energy to conserved or for costs to be reduced. All flats were of the same three-bedroom design in the same building.

Heat Cost Allocation is a simple, low-cost solution that can quickly benefit consumers.

Examining the data for the calendar year 2019 showed major variations between the high and low consumers. To illustrate this, see the graphs, opposite. As an Example Flat 1 consumed a huge 45 per cent lower than the average for the seven on trial, while Example Flat 2 consumed eight per cent higher than average, with Example Flat 3 just under 30 per cent above average – despite all paying exactly the same.

It is therefore very clearly demonstrated that the flat-rate charging of heat and hot water is not fair to consumers – especially as this is a service that costs hundreds of pounds each year. Additionally, it is safe to assume that there is significant opportunity for energy savings to be made given the very wide patterns of use across identical dwellings. This is supported by repeated international research that shows the introduction of metering will reduce consumption by an average of 20 per cent.

As a spokesman for a housing association client commented, “The introduction of metering into our communally-heated buildings is a very important improvement for us because we will be supporting our residents to save costs and also reducing emissions of carbon dioxide”.

Updated regulations

It is for this reason that the Government has recently updated regulations requiring all unmetered heating systems to be metered where feasible. These updated regulations state that any such metering should be installed by 1st September 2022. Given this short time frame and the very high number of properties affected it is important that owners and operators of these systems start the process of installing the meters.

Installing metering for all affected properties in an existing building sounds like a daunting, expensive and highly disruptive project but the use of Heat Cost Allocators makes this process straightforward and is very cost effective. Whilst such meters are not common in the UK it is estimated that over 250 million of these devices have been successfully installed throughout Europe – and ista has installed 60m of them, across 22 countries and in 13m homes.

The implementation of the new regulations and the installation of meters for heating should be welcomed by residents and operators – in fact given the benefits summarised below, do not be surprised when residents begin to demand that meters are installed!

The benefits of Heat Cost Allocation:
  • Energy savings averaging 20 per cent have been independently verified
  • Carbon emissions from energy use for the property are reduced
  • Residents are charged fairly – very important at a time when the use of the home is changing at an unprecedented rate
  • The actual cost of operating the heating system is recharged to the residents
  • The solution is not disruptive, in most cases installation of the required devices is completed for each flat in less than an hour and the meters are read remotely using a radio network.

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For support and assistance with the regulations and to get quotes for the required work contact ista:
E-mail: [email protected]
Phone: +44 (0) 1223 874974

ista is an international energy services business, specialising in the management of information for the property sector. With over 5,800 employees, the company operates in 22 countries and has installed 60m measurement devices in 13m homes.

Detailed guidance and the necessary pro-forma documents for the Heat Network (Metering and Billing) Regulations are available from the OPSS:
https://www.gov.uk/guidance/heat-networks

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