Sector - Energy, Fuel & Utilities

Heat Network (Metering and Billing) Regulations

David Lewis – Managing Director of ista Energy Solutions explains why the amendment is not a risk but an opportunity for compliance and sustainability using simple proven technology.

With the update of the Heat Network Regulations from The Department of Business, Energy and Industrial Strategy last month 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.

It is the Heat Supplier that has the obligation to comply, in most cases this will be the Resident Management Company, but this could be fully delegated to the Property Manager.

This may seem like a further Compliance demand for Managing Agents in a property sector that is already heavily burdened with new rules, however, there are options to ease a path through these Regulations and create value for Landlords and Residents.

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.

Installing metering for all properties in an existing building sounds like a daunting, expensive and highly disruptive major works project but using a solution specifically designed for retrofitting, called Heat Cost Allocation, this process is straightforward and is normally cost effective.  Whilst not currently common in the UK it is estimated that over 250million such devices have been successfully installed throughout Europe – indeed ista patented their first such solution in 1924!

In addition to complying with the Regulations, there are 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

ista provides a complete end to end metering service for Local Authorities, Social Housing Providers and Resident Management Companies.  We will assess each property, complete the necessary Regulatory documents, arrange installation, and finally provide the consumption bills for each Resident.  In nearly all situations it is demonstrated, using the Government approved modelling tools, that this improvement to the property benefits all Parties.

ista is an International energy services business, specialising in the management of information for the property sector.  With over 5,800 employees, the company operates in 22 countries and has installed 60m measurement devices in 13m homes.

If you would like to read more stories like this, then please click here