Will outsourcing turbocharge the roll-out of heat pumps?

If the experience of a good friend of mine with British Gas is anything to go by, then the answer to this question is a definite no! Two and half months after a team of subcontractors arrived, and 15 return visits later, my friend still doesn’t have a properly operating system!

Nevertheless, I welcome the fact that British Gas want to offer householders the option to install a heat pump, which was launched in 2022. And the commitments provided are reassuring: 

Is my friend’s experience a one off, or evidence of a deeper issue with how the outsourcing is operating? I don’t know, but British Gas need to urgently determine the answer to this question (and also help my friend!).

As a strong advocate of heat pumps and as someone who is frustrated at the disinformation that surrounds them, pushed by fossil fuel interests, my concerns in this case have nothing to do with the technology or its capability to fulfil its promise. It is a question of how best to scale up capacity.

But let’s wind back a bit and consider the broader question of how large companies use sub-contractors, and outsourcing in general.

Why do they do it?

The risks and failures of subcontracting

Companies often resort to outsourcing because they lack either the skills or capacity to deliver a service, particularly when they are new entrants into a market they want to penetrate. The logic is often that they do not have the time to immediately meet the demand, so seek the support of other companies to fulfil this demand. 

Large providers with an existing customer base have the power to make an attractive offer, but often jump the gun, and go to market before they truly have the capability to fulfil the latent demand. I’ve seen this many times over the years in different sectors.

In some the of largest IT projects I have witnessed, especially with Government procurement, big companies win the main contract on the basis that they have the financial muscle to lead, but know they do not have the specialist skills, so they sub-contract to medium sized companies with spare capacity. 

Often, these medium sized companies also lack the specific skills or capacity for the projects in play, so they too subcontract to those with genuine expertise in the new technologies, even sole traders. Via this process of successive subcontracting, there is a dilution of accountability. The ones who end up on site discover that there has been a mismatch between client expectations and the resources assembled to deliver the project.

Why don’t the main contractors not do the obvious thing and train up their staff to deliver the new stuff? A very good question, and one that has always puzzled me. 

Sometimes it is due to organisational inertia. Imagine a building company that has spent several decades delivering standard British build homes. There is a whole industry behind the standard model. It takes changes in many aspects of the business operations – supply chains, basic skills, and much more – for them to move to something different, such as European style modular, 2050 ready, house building. 

The same is true of a large company that has spent years delivering gas boiler installations, now wanting to start delivering heat pump systems. The pressure to create a sales pipeline will often trump the concerns of the engineers wanting to create a solid new delivery model. Inevitably, companies end up trying to run before they can walk.

Impact of failed subcontracting

My friend is very ‘Green’ in everything she does. She wanted a heat pump to replace her boiler. If she’d asked me, I’d have recommended a few questions to ask any potential supplier (see below).

She opted for British Gas because they were her existing supplier and their website made reassuring claims.

The promise was to arrive late in July this year, and finish the installation within 3 or 4 days, It is now mid October (two and half months later) and after 15 visits by the sub-contractor and British Gas the system is still not working.

It is obviously not the fault of the technology (they deployed well established products), but the lack of competence and experience of the staff the subcontractor deployed. Because my friend’s contract is with British Gas, the issue is 100% with them, and they acknowledge that.

Questions for British Gas and other outsourcers

These are my questions for British Gas:

• How do they recruit subcontractors?

• How do they ensure their subcontractors are competent, in both heat pump installation in general, but also the specific product configurations preferred by British Gas?

• What project management and oversight do they provide to ensure effective delivery?

• If there are issues, how effective is their ability to escalate matters, to ensure timely resolution?

On the basis of my friends experience the answers to all these questions is really disappointing.

So will outsourcing turbo-charge the roll-out of heat pumps, by British Gas and other large companies wanting to get into the market? 

My genuine belief is that it will not. 

The small and medium sized companies/ enterprises (SMEs) that know how to do it are already maxed out, so the only option that outsourcing can provide is to go with companies that do not know how to do it, but claim they can. 

A better model in my view for expanding the capacity of the heat pump delivery market is to replicate existing successful SMEs.

Companies like British Gas cannot build a business by outsourcing to subcontractors who lack competence and experience, they need instead to properly skill up their own workforce and have systems in place to ensure they achieve effective delivery. 

Meanwhile, as we enter winter, my friend is still being let down, not by the technology or its ability to do the job, but by incompetence.

What a delivery process looks like

Delivering a heat pump to replace a boiler is really not that complex but as with any technology, it requires genuine experience and a proven delivery process, not just classroom training. A mitred butt joint is quite a basic carpentry skill, but you can’t just show some Powerpoint to an apprentice and expect them to pull it off very well, and start being a frame maker. Practice makes perfect. 

A plumber experienced in fitting gas boilers and radiators will have many transferrable skills. However, a sole trader plumber will rarely be able to make the transition to a sole trader heat pump installer. If they’ve never worked with heat pumps, don’t expect that minimal training will ensure successful delivery, especially given that many of the most specialised tasks – the electrical and digital setup of the heat pump – are not plumbing tasks at all. 

Installing heat pumps really needs a team with a variety of skills, and I believe this is the only way to properly scale up the installation of heat pumps as  I wrote about here.

Only a company that is focused on installing heat pumps and has successful projects it can reference, would I ever consider to install a heat pump in my house. I followed my own advice and it proved to be a good decision. 

I want the people who turn up on site to be co-workers, employed by the same company, not an assortment of contractors who are strangers to each other, with no shared company ethos and ways of working.

That is why out-sourcing so often delivers poor results for the customer, be it software, house building or the installation of a heat pump system. It leads to the dilution of accountability, and really no assurance in the quality of practice that actually turns up on the day.

Following this essay I’ve produced A Guideline for Householders Considering a Heat Pump.

I really want British Gas to make a successful switch from installing gas boilers to installing heat pumps, but they really do have to consider how they do this.

If they choose in the short term to outsource work, they will need to ensure that there is true competence and experience in the teams that are deployed in their name.

How they ensure the quality of those teams is up to them, but it is essential they do.

© Richard W. Erskine, 2023

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A Guideline for Householders Considering a Heat Pump

Here is my guideline for householders considering signing a contract with an air source heat pump installer.

1. Getting an understanding of what is possible 

It’s really important to move beyond the misinformation and received wisdom attached to heat pumps.

The essential point to understand is that if a building can be heated by a gas boiler, it can be heated by a heat pump. But of course in both cases, the unit needs to be sufficiently powered and the rest of the plumbing setup and sized correctly too.

It will mean that some things change though. For efficiency reasons it is best to use a ‘flow temperature’ as low as possible (that is the temperature of the water flowing through your radiators). This is actually true whatever the heating source.

A room that needs to be heated to 21°C does not need a flow temperature of 70°C or more. The latest UK building regulations for new builds mean that whatever the heating system used, the flow temperature should not exceed 55°C. So plumbers will need to learn how to implement ‘low temperature’ systems, whether with gas boilers or heat pumps.

Often 35°C is enough, and even in mid winter, 50°C is the maximum required in even the most challenging of settings. The 3 key factors that determine the flow temperature are: the external temperature; how well insulated the house is; and the surface area of the ‘emitters’ (radiators or underfloor heating):

• The colder it is outside, the harder a heating system has to work to achieve the same result, but a well designed heat pump system will normally ensure that the flow temperature never needs to be more than 50°C, even when it is -5°C outside.
• The fabric of the building determines how fast the building loses heat, but it is a myth to say that old buildings cannot be heated by a heat pump or need ‘deep retrofit’ before they can. This case study and others cited in the essay prove otherwise.
• The larger the surface area of your radiators, the lower the flow temperature required (whether it be a gas boiler or heat pump). By moving from a single panelled radiator to a double panelled one with fins, the effective surface area is increased greatly, without the wall space of the radiator increasing at all (the height and width of the radiator unchanged even if it gets a bit fatter). The same is true moving from a double panelled to a triple panelled radiator, when this might be needed (which is not as common as is believed). 

The pipe work will need sufficiently sized pipework and flow rates to move the heat needed around the house, but that should be part of the assessment that a supplier makes. In many cases, no changes to pipework are required.

In terms of system operation, householders will not have the fast heating up of the house twice a day as they do with a gas boiler. Instead the heat pump stays on for longer, and the house does not go through big swings in temperature. In many cases, the system is setup to stay on 24/7 but with the system set back a few degrees overnight.

2. Get a proper assessment done

A reputable company providing installation services for a heat pump should do a full room by room assessment of your home and check various things we have already mentioned: the state of the plumbing; existing radiators; space requirements inside and outside for the kit required; etc. A householder will typically have to pay for this report but be offered a refund if they go with this supplier. 

Other things the assessment will cover are the electricity and water supply. In some homes that have not been upgraded for many decades, remedial work might be required, for example, to carry our work on the mains supply, but this is often unnecessary. They might recommend that an electrician does a ‘load survey’ before the project proceeds (in my larger than average old house I was worried that our 80A mains fuse being too low, but it turned out to be fine).

I would recommend getting at least two assessments from different suppliers. If their assessments are not similar (e.g. in terms of the size of heat pump required and costs), then you need to understand why. Also, ask for references in the locality – and take up an offer to visit these. Consider choosing a supplier that is not too far away, as they need to be able to pop back to fix any issues post installation.

A potential installer should produce a professional report (delivered electronically as a PDF) that should be quite detailed, including the following:

• the assumed nominal coldest day of the year used as a basis for the design including maximum heat loss calculations (e.g. external temp of -3°C);
• confirmation or otherwise that the design uses MCS standards for target room temperatures (21°C, 18°C and 22°C for living spaces, bedrooms and bathrooms, respectively);
• an estimate of the heating power requirements (in kW) for each room when heat loss is at a maximum;
• the total heating power requirement (in kW) for the house as a whole when heat loss is at a maximum;
• the maximum flow temperature for the radiators;
• the total expected heat delivered by the system over a year (in kWh);
• the estimated Seasonal Coefficient Of Performance (SCOP) for the system over a typical year.
• confirmation that the system design and products used will be specified to include metering that will enable – over any period – electrical usage (kWh) and heat delivered (kWh) to be viewed (via an App) (without this, the householder is unable to ascertain how efficiently the system is actually operating);
• the capacity of the water tank, based on the usage for the potential occupancy of the house.

You may say ‘Oh, but I’m happy with 19°C in my living room’ or ‘our children have left home, so can be we get away with a smaller hot water tank?’, but remember that the system needs to be fit for the house, and future occupants when and if you move on.

The steps required before the installer can come on site to install the heat pump system will vary a little, depending on the householder’s situation (e.g. if local authority permissions are required). This list is illustrative of the preparatory steps that need to be ticked off:

• Local authority approvals ✔︎
• Electrical ‘load survey’ ✔︎
• Water pressure checks ✔︎
• Checks on pipework sizing in the house ✔︎
• Clearing loft and installed improved insulation ✔︎
• Sorted out draughts in windows and doors ✔︎
• EPC certificate ✔︎
• Government grant conditions met ✔︎
• Check by installers of suitability of locations for outside external equipment, ✔︎
• and checks on space inside for internal equipment ✔︎

3. Project execution

There should be someone who is the point of contact for sorting out issues, acting as project manager (PM). 

The team should arrive onsite with all the equipment and gear they need that matches the design. That includes the heat pump, new hot water cylinder, any new radiators, pipework, valves, etc. If there is a lot of going back and forth to local suppliers of kit then that suggests a poorly organised team.

A typical installation process would be as follows:

• Introduction to installation team, and logistics agreed (eg. access times)
• Old gas boiler and tank removed
• Existing pipes and radiators flushed
• Heat pump (external) and other kit (internal) moved into position
• Plumbing in of kit (heat pump, hot water tank, etc.)
• Plumbing in any new radiators specified
• Heat pump connected to electrical power
• Control system system installed (the ‘brains’ of the system)
• One wireless thermostat placed in living room, set to 21°C
• Various control setups competed
• Setback thermostat e.g. by 3°C to 18°C between 10pm and 6am
• Weather compensation setup
• System put into operation
• Radiators ‘balanced’ to ensure optimal heat distribution (after that, householders should avoid fiddling with radiator TRVs)
• Metering installed if not inbuilt for flow/return heat and electricity usage
• Certificates produced for MCS compliance

The householder should be briefed on the system setup, specifically:

• the optimal location for the thermostat (this is typically a single one placed in the living room and set to 21°C. If the system is designed and installed properly, all rooms will achieve their target temperature if the living room reaches its target temperature – no need for clear controls in every room)
• setup the operating regime over a 24 hour cycle e.g. any set back used overnight
• that weather compensation is, as per good practice and to maximise efficiency, in operation (so the system only works as hard as it needs and when it is warmer outside, the flow temperature automatically is lowered).

The householder should be briefed on how they can use a console or App to ascertain:

• current state of operation (e.g. flow temperature, tank temperature, mode of operation (space or water)
• electricity usage by the heat pump over a given period
• heat delivered by system over a given period
• the coefficient of performance (COP) over a given period (e.g. day, week, month or year) (which is the ratio of the heat delivered and the electricity usage)

Over a period of a year, the COP is termed the Seasonal COP, and in a properly designed modern system, it should be at least 3. In my old house we achieved 3.3 last year. In a modern well insulated house, even better results (higher SCOPs) are achievable.

In addition

• there is just one task, in my experience, that a householder needs to be briefed on, which is checking the water pressure in the system. With old plumbing, there can be air locks created even after the system was setup correctly, and this can lead to slight drops in pressure. A simple process is used to reestablish the correct pressure, and the householder should have received the simple instructions on how to do this (I had to do this twice in the first month, but not since).

4. Post Project service

The team should of course leave the site having completed all the tasks, ensured the system is operating correctly, and that everything is tidied away. If radiators have been replaced then old ones will be removed, unless the householder wishes to retain them for any reason (perhaps some are not so old and they can use in another project elsewhere).

Within a few days of the installation, the company / project manager should make a call to check that everything is OK. 

The company should have already offered to carry out the annual service and indicate the costs for doing so (typically £150 or less). This service will check the status of the refrigerant in the heat pump, and other tasks. It is important that annual checks are carried out (just as they are for any heating system).

The company should respond promptly if it appears that the system is behaving badly e.g. if the COP is less than 2 for example for an extended period.

In a well designed and installed system, the householder can simply let the heat pump do its thing and will not need to do anything. No fiddling with the system console or radiators is required and to be discouraged. Just leave it alone. 

But it is important to periodically check how the system is performing. I would suggest doing this weekly at first, but then monthly once you are convinced that the system is operating well. After some time you may choose to do it only every quarter. I would recommend that you always do an annual check on performance. When in the future you possibly come to sell the house, being able to quote the SCOP achieved for successive years will provide reassurance to any buyer.

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