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Is the UK low carbon heat industry ready to deliver? A case study of a customer who can't buy a heat pump

Posted by Jennifer Arran on 10 June 2013 at 9:16 am

Is the renewable heat industry ready to deliver? This critical question was raised by the most recent interviews in our on-going research program. The Microgen Insight Service carried out in-depth phone interviews with owner-occupiers on- and off-gas, including a a small number of owner-occupiers who are planning to install, or have just installed a microgeneration technology. 

The results reiterated issues around cost and fear, and they also revealed some new insight into how customers think about buying microgeneration - in particular around controls, interaction with their system, and how they move beyond general interest to what, where and how to buy.   

The interviews reveal that the buying process for low carbon heating is not always straightforward and effective. The customer sales journey can be long, complex and overly onerous – often heavily reliant on the quality and reliability of individual installers.  Critically there is a lack of a reliable trusted source of information, and in some cases customers have to spend a lot of time and effort in the purchase and installation process, which results in frustration and ultimately apathy.

Consider respondent X below – a textbook “perfect” customer for microgeneration: 

Planning to Install an ASHP 

Profile of respondent X:

·        Off-gas – currently uses LPG.

·        Financially secure – with approx. £8,000 - £10,000 to spend on a renewable heating system.

·        An investor -  thinks of installing a renewable heating system as an investment for the future, considers payback.

·        A non-mover – settled, no plans to move house.

·        A researcher – has done considerable research into different technology options, has already decided they would like an air source heat pump (ASHP).

·        A “green” customer – already has solar PV installed

Customer journey:

Phase 1: Research – an interested customer who goes out of their way to find out relevant information, doing research on the internet and by contacting relevant associations. Decides to look into new technology following a recommendation from an insulation installer.

"I’ve done a lot of internet research…I even went as far as finding a ground source heat pump association who gave me some names."

Phase 2: Decision point – decides ground source heat pumps are too costly, but they would like to install an air source heat pump. They want to cut their gas bill and have worked out the rough payback on a system based on information online.

Phase 3: Quotation – getting a quotation was surprisingly difficult. Onus is on customer to follow up and after 6 months had only received two quotes. Neither installer has tried to follow up on the potential sale.

"I contacted 12 companies [about ASHP] - only four responded, two of those said they would call to set up a visit then didn’t; one came to see me and quoted but I never heard from him again after I go in touch; and the fourth didn’t come to see me in the end but gave me a quote." 

Phase 4: Outcome – customer apathy, why should I chase them? Unless the installer gets back in touch the customer is likely to abandon plans to install.

"I’m standing here with £8K and saying somebody please come and give me one of these things, and the industry is saying no.

"It’s been a great frustration. I’ve got to the stage now where I’ve just lost interest”

So what does this tell industry?

Well, it’s only one customer – is it an anomaly or representative of the market? We believe somewhere in between. In a separate "mystery shopping" exercise we had some excellent experiences, and several where we really had to chase and push to get a response to our sales inquiry.

This highlights the key challenges in the market today:

·        The installer – who can be the ‘face’ of a brand - is a critical link in the sales journey, and is not always effective in facilitating a smooth customer journey.

·        Other ‘larger’ vendors offer a mixed experience – some excellent – in particular ‘renewable energy specialists’, but some very poor.

·        Customers' desire for a single point of contact in their sales and installation journey is not always met.

·        There is a lack of a trusted advisor in the market – which leaves an opportunity for companies to claim this ground.

·        There are customers ready to buy today, but some are being frustrated by unresponsive installers and vendors.

Also by Jennifer Arran on YouGen

Fear and cost are the main barriers to investment in renewable energy

Access to more detailed information from the research is available to subscribers to Delta e-e's Microgen Insight Service

Photo Credit: SalFalko via Compfight cc

About the author: Jennifer Arran is an analyst at Delta Energy & Environment

If you have a question about anything in the above blog, please ask it in the comments section below.

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