Getting heat billing right


Fairly and accurately charging for heat has always been a problem to solve cheaply and easily when addressing the retrofit of existing properties. Ista’s managing director David Lewis talks to Tim McManan-Smith about a possible solution.

For “communal heating you need to have the consumer understanding and paying for what they use,” says David Lewis, Ista’s managing director.” “Everybody accepts and understand that that’s a good thing. In the UK we’ve been putting metering into all new developments and people pay for what they use, which is perfectly right.”

“The challenge has always been, what do you do with the existing stock? The UK has struggled to implement that part of the legislation.”

Heat metering was tried in 2014 but it didn’t work, it was too complicated. There was an element in the legislation said that existing properties had to be metered where it is technically and economically feasible. A full building modelling tool was constructed to determine this, but it was so complicated and full of assumptions that it was difficult to demonstrate anything successfully, other that it was too complicated, so let’s not bother, comments Lewis.

In the past Beis even went as far as to say they were not going to enforce the regulations; it just doesn’t work. Until this year there’s been a set of regulations in place that haven’t been enforced, even though it’s primary legislation. With the update of the Heat Network Regulations from The Department of Business, Energy and Industrial Strategy the Operators of any unmetered shared heating system must try to charge Residents for their measured heat use.  This is therefore another important piece of Legislation that a Managing Agent must become familiar with to effectively support the Resident Management Companies that rely on their expertise.

As a starting point it is important to identify what a Heat Network is and must therefore comply.  A Heat Network is defined as either a district heating or communal heating system that provides heat to more than one final customer.

The main obligations on the operator of the unmetered heat system are summarised as follows:

  • Notify the Office of Product Safety and Standards (OPSS) about the Heat Network and details of the installation.  This must be repeated every four years, a new pro-forma has been provided.
  • Assess the feasibility, both Technical and Economic, of installing metering to each dwelling in the property – a standard tool is provided for the economic test
  • Install meters in all situations in which metering is demonstrated to be feasible
  • Provide Residents with consumption bills that clearly explain the charges

The scope of the Regulations is wide and will typically affect residential properties constructed prior to 2010 where a communal system is installed for providing heat and often hot water.  There are exclusions, using Building Classes, in the Act but these are limited to purpose-built student accommodation, almshouses and ‘supported housing’ (a clearly defined term in the Regulations).

A very particular exclusion that will be important for Managing Agents to note relates to existing leases that prevent the installation of meters or the charging for the heat use based on measured consumption.

The Regulations contain very clear compliance deadlines:

  • 27th November 2021: all unmetered Heat Networks must be re-registered with the OPSS and includes the feasibility testing described above.
  • 1st September 2022:  all identified meter installations are completed.

It is therefore important that Managing Agents consider completing assessments quickly to allow a longer programme of installation – taking advantage of both summer periods within the timescale for implementation with minimum disruption.

“A lot of talk is about zero carbon but it’s nearly all focussed on new build|,” says Lewis, “If you don’t address the existing stock, you’re only really scratching the surface. How to do proper cost-effective retrofit measures? We believe that we have a very simple purpose designed retrofit solution that is not at the moment being adopted in the UK. Hopefully the new legislation will address that.”

Heat cost allocators

The solution is a small box that is fitted to all radiators that measures how often and at what temperature it operates at. You can then then see who is using most of the heat. It is not sophisticated and is purposely designed for retrofit, not intrusive and takes 5 minutes per radiator to install. It is fully wireless, completely hands-off.

The regulations do now recommend that if you can’t put in the sophisticated ultrasonics meters you must then look at heat cost allocation.

“It’s an opportunity to reduce carbon and through behavioural change reduce costs too.  High level of wastage where people know heat is free, and temperature control is achieved via opening windows and not thermostatic valves. It is the fairest way of looking after residents.”

The heat cost allocators also have ancillary benefits. Through the daily information sent back landlords know if tenants are heating their room sufficiently, such as elderly tenants.

It seems fair to allocate heat in proportion to how much it is used and now it seems technology is not a barrier to achieving this.

Benefits for both the operator and residents:

  • Energy savings averaging 20% have been independently verified, reducing the costs for the Operator and Consumer alike
  • Carbon emissions from energy use for the Property are reduced – an important motivator for many owners and renters given the widespread concern about a climate emergency
  • Residents are charged fairly. At a time when the use of the home is changing at an unprecedented rate paying only for what you use is very important to all
  • Each month the actual cost of operating the heating system are recharged to the Residents, reducing the risk of a shortfall in operating budgets
  • The Solution is not disruptive, in most cases installation of the required devices is completed in less than an hour


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