SSH2: Industry insight – From Kilowatt hours to Warm Hours

Published: 6 August 2019

Introduction

Decarbonising heat is the biggest challenge the UK faces in terms of transforming the energy system to meet carbon reduction targets and achieve our clean growth ambitions.

Energy Systems Catapult is delivering the UK’s largest smart, consumer-focused project aimed at overcoming the barriers to the decarbonisation of residential heat – the Smart Systems and Heat (SSH) programme.

SSH Phase 2 (2017-2019) focused on running consumer trials of smart energy services, exploring new business models and market structures (including interoperability) and developing Local Area Energy Plans within three local authorities areas. SSH2 was funded by the Department for Business, Energy and Industrial Strategy.

 

Most consumers don’t understand what they’re buying when they pay their monthly heating bill. They don’t know what kilowatt hours (kWh) are and, unlike other sectors, businesses who sell energy offer no intuitive way for consumers to manage and control how much they spend on their heating.

In our Living Lab of 100 real-world homes, we trialed selling ‘Heat Plans’ where they could pay a fixed price to keep their home warm for a number of ‘Warm Hours’ instead of kWh. This insight paper argues the case for taking such an approach for selling heating to consumers.

Key points

  • In several recent consumer trials we found most customers were not able to understand:
    • how much it actually costs to heat their home for an hour, day or week
    • how many hours they keep their home warm each week
    • how much more they spend to keep their home warm when the weather is colder, or
    • what they can do to make their home feel warm and comfortable without breaking
      the bank.
  • We created a Living Lab of 100 homes where people could set the temperature in each room and we could discover how warm they heated each room at different times of day. We used their data to offer them the choice of three bespoke ‘Heat Plans’ based on the cost of heating their home.
  • Consumers preferred the idea of buying Warm Hours to kWhs as they found the former much easier to understand.

Next steps

We’re using our Living Lab to help pioneering businesses learn how to design high quality, low carbon energy products and services that consumers love. Get in touch to find out how you can get involved.