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Five promising consumer business models to transform low carbon heating and well-being in the home - Business Model Summary Report


Citation Watkins, J. and Farrington, J. Five promising consumer business models to transform low carbon heating and well-being in the home - Business Model Summary Report, ETI, 2016. https://doi.org/10.5286/UKERC.EDC.000590.
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Author(s) Watkins, J. and Farrington, J.
Project partner(s) Energy Systems Catapult
Publisher ETI
DOI https://doi.org/10.5286/UKERC.EDC.000590
Download AdHoc_SSH_SS9013_4.pdf document type
Associated Project(s) ETI-SS9013: Smart Systems and Heat (SSH) Programme - Business Model Development
Associated Dataset(s) No associated datasets
Abstract The case for heat decarbonisation is widely acknowledged, with studies showing that it is more cost effective to tackle CO2 emissions from buildings than cutting more deeply in other sectors. The real challenge is establishing new heating solutions that substantially remove natural gas use from homes whilst making the solutions financially viable and attractive to consumers. Around 20,000 homes each week will need new heating system installations between 2025 and 2050 to meet decarbonisation targets; a rate fifty times greater than achieved to date. The current market will not deliver at scale for residential low carbon heat transition given: unappealing consumer propositions, a fragmented industry structure, a lack economic drivers and need for holistic policy framework. The Energy Technology Institute commissioned the Energy Systems Catapult to deliver a business model development project to develop a number of specific business propositions that could stimulate new thinking for models to be introduced into the market from just before 2020 through to the late 2020’s.

Five complementary business models are considered in order to stimulate new thinking on addressing affordability and engagement in residential low carbon heating for all homes and consumers, including the fuel poor:
  • Home Service Company
  • Home Comfort Contract
  • Home Moderniser
  • Neighbourhood Heat and Electricity
  • Urban Renewal
Analysis suggests that the most significant Enablers would be Policy, ICT and Standardisation. It is notable that none of the business models depends on new clean technology per se and that financing typical for other sectors could be sufficient to move the market forward. Trading of energy was deemed to have aminor impact in the value or cost of the home heating provision.