Consortium to pilot heat and energy as a service

E.ON has joined forces with Energy Systems Catapult and Heatio to strengthen the emerging green finance market in the UK. The collaboration aims to develop two green finance products that will encourage the uptake of energy efficiency and low carbon heating measures.

This initiative is part of the Green Home Finance Accelerator (GHFA) under the Department for Energy Security & Net Zero (DESNZ), which provides funding for innovative green finance products.

The first product, Heat as a Service (HaaS), addresses the barrier of high upfront costs associated with installing and maintaining low carbon heating solutions. HaaS would eliminate these upfront expenses by having a financial provider cover the initial costs, which would then be paid back by the consumer over a longer period. The consortium plans to focus on removing upfront costs related to heat pump purchase and installation and will offer a comprehensive care package including ongoing maintenance and support.

The second product, Energy as a Service (EaaS), aims to lower upfront costs for consumers considering heat pumps, solar PV, or battery storage. It will achieve this by combining power purchasing agreements (PPAs) with innovative grid services and integrating preferential energy tariffs to reduce household energy costs.

Both HaaS and EaaS aim to spread the cost of low carbon energy solutions over a significant contract period, making them more affordable for consumers. The project also intends to explore how these finance models can accelerate the adoption of alternative heat and energy sources among individuals with lower incomes and limited capital.

Overall, the consortium’s collaboration and funding from DESNZ seek to develop and replicate green finance models that enhance the accessibility and affordability of energy efficiency and low carbon heating measures in the UK.

Becky Sweeney, business leader – homes, at Energy Systems Catapult, said: “Our work with E.ON and Heatio has the potential to reshape the UK’s approach to green finance. We need to convince consumers that decarbonisation can work for them, rather than being imposed on them. If we don’t get this right, we won’t get their buy-in.

“The rollout and adoption of HaaS and EaaS models can help change this view, by deferring the up-front capital costs associated with low carbon heat and energy solutions – barriers which often convince consumers that decarbonisation is out of reach for them. Innovative services can also help to streamline the process for consumers. This will go a long way in convincing homeowners to make the switch to alternative heat and energy sources.”