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A motivational approach to energy efficiency

Anthony Coates-Smith, Managing Director at Insite Energy, discusses an energy tariff innovation that’s set to have a significant impact.

When heat networks work well, they are cheaper and use less carbon than homes heated by individual gas boilers. Sadly, many in the UK operate at only 35-45% efficiency. That results in higher-than-necessary carbon emissions, large bills for residents, and increased operational and repair costs for housing providers, exacerbating the impact of the cost of living and energy price crises.

Heat networks are a complex, multi-user systems and many factors can affect their performance, from design and construction through to maintenance and monitoring. One crucial piece of the efficiency jigsaw is end-users’ behaviour. Unlike consumers with an individual gas boiler, the consumption and maintenance behaviour from one household can influence the entire heat network. ‘Weak links’ result in higher costs for everyone.

But, in our experience, it’s tricky to get people to understand and engage with heat network efficiency, particularly as the communal aspects of the technology are still alien concepts to many UK consumers. The fact that the size of your own utility bills depends as much on what your neighbours do as on your own behaviour can make energy-saving efforts feel pointless, resulting in inaction.

Rewarding the right behaviours

To tackle this dilemma, we’re introducing motivational tariffs to the UK heat network sector. This innovative approach provides financial incentives to residents encouraging behaviours that improve heat network performance, translating collective benefits into lower bills for households. In so doing, it aligns the interests of housing providers and residents to lower costs and reduce carbon emissions.

Motivational tariffs have been used for some time in Europe to great effect. For example, in Denmark, where around 64% of all homes are on heat networks, they’ve helped to lower heat network return temperatures (the temperature of the water in the pipe system after heat has been released into homes) by 10oC over 10 years, reducing costs for everyone and providing a substantial advance towards achieving national emissions targets.

Promising pilot

We wanted to see if we could replicate this success in the UK, so we conducted a pilot study earlier this year at a 300-unit residential site in London. We offered a lower tariff to residents who arranged service visits when requested. Previously when households were contacted about this, 59.3% didn’t respond. When the motivational element was introduced, this figure dropped to 8.3%, most of which were sublet properties.

We also reviewed data from 1,091 Insite-operated meters from January-July 2023. This showed that over 81% of households would save money immediately on a motivational tariff as their heating system already performs efficiently, entitling them to a rebate at the end of the year. Only 6.8% would receive an extended charge, while given advice on how to rectify this going forward.

Following this encouraging research, we’re now planning to roll out motivational tariffs at a measured pace through our digital web-app, KURVE. As Insite Energy is the first known heat network metering & billing provider in the UK to implement this, we’re aware of the importance of doing it right. Motivational tariffs have the potential to improve public attitudes to heat networks, as well as increasing their efficiency and effectiveness. However, this will require a shift in mindset, in a sector that is itself still unfamiliar to most people.

Our roll-out will take place in three stages, starting with introducing the concept to our KURVE users through a simple performance dial (Phase 1). In phase two, we’ll introduce hypothetical monetary values to actual and desired return temperatures, with targets tailored to individual sites, reflecting the potential energy efficiency of the systems and buildings involved. Only when users are familiar with the concept will we actually implement the motivational tariffs, in phase three upon the heat supplier’s request.

As with any new undertaking, there may be hurdles to address. Good communication with residents will be essential, along with assistance and guidance to help them reduce their return temperatures. But done well, we feel motivational tariffs could be very beneficial for the heat network industry.