Heatrae Sadia Comment: Q4 2019

Jeff House, Head of External Affairs Baxi Heating UK (incorporating Heatrae Sadia) is BMBI’s Expert for Water Heating.

The Brexit debate is now resolved, in as much as we will be leaving the EU. The true impact is still to be determined by the trade deal – if one is agreed. Although consumer confidence has improved since the election, there will be continued uncertainty in the construction sector until the details of a trade deal are understood.

The Energy and Utilities Alliance (EUA) stats indicate a record year for 2019 domestic boiler sales (1.67m) but a flat market for hot water cylinders. As mentioned in previous reports, the gradual shift away from combination boilers in the new-build sector will mean growth for cylinders in future. This growth will come from increasing interest in electric heating, with the option of hot water cylinders, to meet environmental legislation.

The Future Homes Standard and Approved Document L 2020 consultation is the most recent step towards changes in legislation. The consultation period has closed, and we are waiting for a response from the government with subsequent changes to building regulations.

One important proposal within the consultation is to amend the Planning and Energy Act (2008) to restrict local authorities from setting higher energy efficiency standards than are required by national regulation. The risk with such regional variations is that it will fragment the supply chain, inhibit economies of scale achievable by a unified market, and drive up costs for all.

Later this year, the Department for Business, Energy and Industrial Strategy (BEIS) is expected to publish the Low Carbon Heat Roadmap. The roadmap is designed to plot the path to net-zero by 2050 for domestic heating. Recently, the new build construction sector has been a focus in this area, but new build is only a small part of the overall net-zero challenge. The majority of the UK’s existing building stock will still be in use in 2050, so retro-fit and refurbishment are critical factors which need to be addressed. Following the BEIS Heat Roadmap publication, we expect a much greater focus on policy in this area and perhaps further consultations during 2020.

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