John Kerr, Marketing Director at RWC, looks at what has been happening in the heating and plumbing industry, and what it means for next year, and for the years to come.
If the last two years have taught us anything, it is that almost anything can happen. Just as we were getting our heads around Brexit and what it meant for supplies, along came COVID. Next it was the turn of electricity, forcing up fuel bills and hitting us hard in the pocket. And looming over everything there is climate change and the need to cut greenhouse gases. All of these have implications for the heating and plumbing industry.
Firstly, there’s going to be work, and lots of it. Quite apart from the government’s ambitious targets for building new homes, they’ve set aside over £100 billion for construction projects over the next 10 years. Then there is the Domestic Renewable Heat Incentive (RHI) which will generate work, and there is always refurbishment and maintenance, as people look to upgrade their homes to make them more efficient. And with rising energy costs, this is key.
The main driver of this efficiency focus is climate change, and the need to cut emissions and greenhouse gases, and this will continue to impact our industry in the short, mid and long term, as we work towards net-zero in 2050.
Over the last year, there was a lot of talk about action plans and new regulations, but little in the way of real policy. From here on, however, things are going to change dramatically, starting in June 2022 when the Part L uplift kicks in. This is essentially the first of many steps we will all be taking towards 'The Future Homes Standard,' which will take effect in 2025, and requires new homes to have 75% less CO2 emissions than at present. The 2022 uplift provides an interim target. What it means ultimately however, is the beginning of the end for gas and oil-fired boilers and a transition to new and more efficient heating solutions.
Around 23 million homes in the UK have gas boilers, and sooner or later they must be replaced, with hydrogen mentioned as an alternative. There are high hopes for hydrogen, with the government aiming for 5 GW of?low carbon?production capacity by 2030, and it is possible that a decision is made soon about whether hydrogen only boilers can be installed from 2026 onwards. But while it is on the radar, hydrogen boilers aren’t on the production line yet, so this is definitely on for the mid term.
More relevant in the short term are heat pumps, which have emerged as the government's favourites to lead the energy charge. They figure large in the government’s 2021 Heat and Buildings Strategy.
As this sets a target of up to 600,000 heat pumps a year by 2028, they will begin to appear increasingly on our order sheets. There are installation challenges however, especially for homes with combi boilers, and they are up to four times more expensive to install than the £2,500 average for gas – and that is without the high cost of extra insulation needed for homes in EPC Band E or below. So even if the government meets its promise of cutting these costs by half over the next few years, heat pumps are unlikely to become dominant just yet.
Other methods need to be in the mix, including IR radiators and underfloor heating. These systems are also programmable to improve control and efficiency – a trend which will increase next year as homeowners, faced with higher bills, look to reduce energy costs. Merchants will therefore see more interest in other programmable devices such as wireless TRVs (thermostatic radiator valves), which enable homeowners to control individual rooms more efficiently.
Realistically however, until we see the emergence of an all-powerful heating system, we are likely to see more ‘mixed’ solutions. This has led to the emergence of the concept of ‘Home Energy Management,’ which will become every bit as familiar a term as ‘Smart Heating’.
A recent report by Delta-EE suggests that home energy management will grow by about 30% annually over the next five years, as homeowners seek lower bills. This is already affecting the sales, and the moment energy suppliers start offering lower tariffs for more efficient homes, it is likely to affect them even more. Expect to see the transition begin next year.
It is not all about heating either. UK householders love home improvement, and lockdown sparked a major surge. Research by GoodMove showed that 48% of households carried out home improvements last year, spending an average of £1,640 in the process.
Along with loft extensions, this included kitchen and bathroom improvements. Products easy to use without special tools, meaning even DIY enthusiasts could quickly create professional finishes, will jump to the front of the queue at the till. As this trend for refurbishment and retrofit is set to continue next year, push-fit is an invaluable addition to the toolbox, making insatllers' jobs easier and helping save time and money. Besides this, there is almost certainly going to be a fair amount of maintenance and remedial work, with ancillary need for spare parts, to tackle for all those jobs that didn’t go quite to plan!
Push-fit also has an important role to play in solving a growing problem for the plumbing and heating industry – a shortage of skills. Research by the Skills Training Group shows an alarming decline in the number of people entering the industry - down 4.19% over the last 16 years. If this continues, there could be as few as 132,614 installers by 2049, which isn’t many considering the burden of work as we move towards that carbon zero target in 2050.
While the industry is working hard to attract new talent and apprentices, there’s also a need for faster, simpler and more efficient technologies. Helping compensate for the lack of expertise, push-fit ticks all of these boxes, so expect it to gain even more traction.
Changing regulations, new technologies, major building programmes… From 2022 onwards, there’s plenty to keep us all busy, so it is important to keep learning and to keep on top of new ideas and innovations. As a major supplier to the sector, RWC and its family of brands is at the forefront of these developments, and looks forward to supporting you going forward – not just next year, but long into the future.