Martyn Bridges, Director of Technical Services at Worcester Bosch, discusses what lies ahead for the heating industry in 2023 following a year of political change and uncertainty.
At this moment in time much of the proposed regulations and policy that affect the heating industry are on hold as the new minister establishes a place within government.
The landscape has changed significantly and its principally down to the cost of living and the cost of energy which, has placed a significant burden on householders across the country. To make products now is costing significantly more than ever before as manufacturers have higher energy costs to carry, and raw material increases which then means it gets passed onto the sale price of goods.
The price freeze put in place by Liz Truss in October seemed to be very welcome by householders however, the price of our gas and electricity costs will be significantly higher than last year. We are very much hoping for a mild winter in the hopes to cut down costs on heating and hot water.
With many proposals on pause for the rest of the year while government focuses on other pressing matters, it is difficult to predict what is likely to happen for the heating and hot water industry in 2023.
While the freeze in gas prices has significantly helped, households’ gas and electricity prices will be significantly higher than what we had to pay in 2021 and even the beginning of 2022.
There is optimism around the long-awaited hydrogen ready boiler consultation, which hopefully we will see the beginning of next year, over 12 months after it was originally due to be published. This consultation, we have heard, has gone through various rewrites to incorporate even more facets of the heating system, not just hydrogen ready boilers.
In addition, we will see the Building Regulations, as changed in 2022, start to embed in and for new build properties built to these regulations, that would mean a 31% reduction in CO² levels, compared to a house built to the 2018 regulations.
It will still be possible to install a gas fired boiler in these situations, but it must be augmented with either increased insulation or very likely with solar PV or wastewater recovery. Solar PV is an incredible technology, and it is to a degree unforgiveable that brand new properties don’t get installed with an array of panels on the roof to capture this free source of energy.
Government and industry
The government is in some turmoil with what is now three Prime Ministers having been appointed in 2022 which won’t bode well for the continuity and stability of energy policy.
We have had numerous ministers over the last 20 years, and nobody seems to remain in position long enough to create policies which we can all get behind and support.
MP Chris Skidmore has been appointed to investigate the progress being made on net zero, and a consultation has been put into place to hopefully aid with this. The sentiments within the consultation seem to be heavily in tune with costs to the consumer and costs and bureaucracy to businesses, presumably with a view to removing or at least reducing these burdens.
Recommendations from the MP have been requested to be handed to the Prime Minister by the end of the year. These recommendations will, hopefully, help to share the outcomes from net zero and how as an industry we can move towards meeting government targets. Of course, with now a change in leadership from Truss, these timelines and focuses may change in regard to future technology and net zero ambitions.
From a market perspective I think we will still see steady growth of heat pump sales. The Boiler Upgrade Scheme was welcomed by homeowners but was not as successful as we had initially hoped. It seems unlikely, however that we will hit the 600,000 annual installation figure that was proposed by Boris Johnson some 18 months ago.
However, we will see an organic rise in heat pump installations and will probably see a significant rise when the Building Regulations of 2025 change to make it nearly impossible to fit anything other than a heat pump into an individual property.
On the flip side, we are likely to still see boiler sales of around 1.5-1.6 million, like we do every year, and a growing interest in other low carbon technologies, including solar PV and hybrid systems.
In summary, it’s still a bit of a waiting game and we’re still unsure of how 2023 will pan out from a legislative perspective. I feel the market is unlikely to change dramatically to previous years, but it will be interesting to see where government and industry updates will take us.