Smart heat technology in social housing · 13 What fuel poverty initiative does your organisation undertake? 2 Smart heat technology in social housing Market Intelligence 2018. 3

Smart heat technology in social housing

Market Intelligence 2018

Contents3 Forward

4 Executive Summary

5 Connected homes: the sensor revolution

7 What are smart heat controls?

7 The survey

8 How aware are you of the smart heat controls available on the market?

9 Can you rate the importance of the following potential benefits of smart heat controls?

10 Please rate the importance of the potential asset management value of smart heat controls?

11 What are the two main barriers to the adoption of smart heat controls?

12 Are you aware of the difference between passive and active smart heat controls?

12 If yes, do you see passive or active controls as the more viable option for your homes?

13 What fuel poverty initiative does your organisation undertake?

2Smart heat technology in social housing


3

Forward

Nigel Ebdon Market Development Manager (Beanbag) Secure Meters UK Ltd [email protected]

Welcome to the first Smart Heat Controls Market Intelligence 2018 Report, commissioned by Secure Meters.

This report illustrates the results of research conducted and published by Secure Meters, exploring the use of smart heat controls in social housing.

Secure Meters has a long and proud heritage of heat controls, metering and smart metering in the UK social housing market, and Beanbag is our first dedicated social housing smart heat control solution.

The smart heat controls market has evolved rapidly in recent years, with social landlords increasingly at the forefront of commissioning large scale hardware installations.

As a new entrant into an embryonic market, Secure Meters is committed to taking a collaborative approach to developing its product offering.

This has included working closely with a range of selected social landlords on pilot programmes, and better understanding the unique demands of the social environment both from a landlord and tenant perspective.

This report, and the preceding survey on which it is based, are examples of our commitment to listen and learn.

For more information on the survey, report or Beanbag do please get in touch.

We hope you find the results and analysis useful.

Smart heat technology in social housingMarket Intelligence 2018

Executive summarySocial landlords are increasingly recognising the role technology can play in improving sustainability and customer service whilst reducing the cost of service delivery. Using the power of connected devices (Internet of Things) and smart-phones delivering readily available accurate information, landlords are improving asset life and reducing energy usage.

This report covers the results of a recent smart heat controls survey of social housing asset and sustainability managers, and is a snapshot of attitudes and perceptions of a rapidly evolving market.

The key findings from the report are as follows:

Ÿ There is relatively good awareness of smart heat controls and their potential benefits to social housing – but less knowledge as to how they function and deliver results

Ÿ Tenant welfare ranks very highly as a perceived benefit – particularly reducing fuel bills

Ÿ Key asset management benefits identified are reducing mould growth and improving boiler maintenance – both costly issues for landlords

Ÿ The main barriers to adoption are upfront capital expenditure and a lack of understanding of the various products and platforms available

Ÿ Less than half of the market understands or is aware of the difference between passive and active smart heat controls

Ÿ Of those who do, there is a 50/50 split view as to which technology will prevail

We hope that you find it useful.

To request an electronic copy, please email [email protected]



Connected homes: the sensor revolution

1 Kevin Ashton, That Internet of Things (RFID 2009) http://www.rfidjournal.com/articles/view?4986

The term 'Internet of Things' is first credited to American Kevin Ashton in a presentation to Procter & Gamble in 1999.

"If we had computers that knew everything there was to know about things— using data they gathered without any help from us—we would be able to track and count everything, and greatly reduce waste, loss and cost. We would know when things needed replacing, repairing or recalling,

1and whether they were fresh or past their best ."

Just as the five human senses allow us to analyse situations and take decisions, so IoT gives the computer its own senses – or sensors – providing the data needed for analysis and action.

The possible benefits to the home were immediately apparent, and many early mass-market connected smart home solutions were for home security - consumer products for private tenants or homeowners.

But as the technologies matured so the proven benefits of mass rollout across social housing began to outweigh perceived risks of very early adoption.



2 The Internet of Things in Housing (Housing Technology 2017)

https://www.housing-technology.com/wp-content/uploads/2017/12/housingtechnology_IoTreport_2017.pdf

The huge potential of IoT in social housing lies in duel landlord and tenant benefits. Tenants benefit from greater control, improved customer service and a more responsive, better informed landlord.

Landlords on the other hand can make better, evidenced based decisions, improving service delivery and efficiency and better managing assets.

But, as with the early stages of any new technology, it has been the early adopter landlords that have blazed a trail.

In Housing Technology's Internet of Things Market Intelligence Report 2017/182, 56% of social landlords' interviewed stated that IoT was either 'important or very important to their overall strategy'.

However, 44% saw IoT as 'unimportant' and only 6% of landlords had an existing IoT strategy. This suggests a polarisation in knowledge and understanding that is supported by Beanbag's research into smart heat controls, and is consistent with any new but rapidly evolving market.

The same survey revealed that the main barrier to deployment was a lack of understanding, but as more landlords deploy and verify the value of solutions so the rate of take up is certain to accelerate.

Reduce cost of heat / energy

Reduce wastedenergy

Lower costof service

Internet of Things & actionable data

According to PwC, the 'Connected Home' and Internet of Things market is estimated to be worth £4.5 billion in the UK by 2020 and some $150 billion worldwide.



What are smart heat controls?

The surveyThe methodology



One of the more developed IoT markets is in smart heat controls (smart thermostats), with a broad range of products and platforms now available from companies large and small.

A thermostat automatically regulates temperature, where as a smart thermostat does this using data from a variety of sensors in order to improve the efficiency of the entire system. The system is usually connected to the internet for remote control.

Some systems also detect home occupancy using a variety of sensors, and can switch the users heating off when they're out. It is this combination of automation and increased control that is changing the way occupiers interact with their heating system and should save them money in the process.

Smart sensors can monitor:

Ÿ Temperature (ambient and room)

Ÿ Humidity

Ÿ Occupancy and movement

Ÿ Boiler performance

Ÿ Carbon monoxide

Over 200 UK based sustainability and asset managers were approached in February 2018 via email to complete an online survey. No incentives were offered for doing so, and the information they provided was to only be publicly attributed to them with their permission.

If delivered in a granular, interpreted or 'usable' format, this data will not only allow landlords to take evidence based decisions as to how to better manage assets and improve customer/tenant experience, but also allow some of these decisions (such as boiler repair), to be taken automatically.

How aware are you of the smart heat controls available on the market?

D8% A

21%

C25%

B46%



Market awareness and adoption appears to be growing, with just over a fifth of respondents claiming to have already installed/trialled smart heat controls or are considering doing so, and a further almost 50% declaring awareness of the technology.

This reflects the growing number of platforms and products available and the impact of supplier efforts to grow the market through sales and marketing activity.

However, responses to questions later on in the survey demonstrate that awareness does not necessarily translate to a depth of understanding, and that multiple competing platforms and technologies (such as active vs. passive), are actually causing confusion and reticence.

If we were to plot social housing smart heat controls on the innovation life cycle we'd be out of Innovators (2.5% uptake), and midway through Early Adopters (maximum of 13.5% uptake).

A

B

C

D

Very aware - we're considering trialling or have trialled / installed smart heat controls

Aware - we've looked into smart heat controls

Some awareness - we're aware of smart heat controls as a concept

Limited awareness - i've heard of the term smart heat controls

Product life cycle and adoption

Early majority

Late majorityNew Tech Old tech

That is growing That has peakedand now in declineLaggards

Earlyadopters

Smart heatcontrols

Innovators

Growth Maturity DeclineIntroductionDevelopment

Product adoption / time

Smart thermostat

Can you rate the importance of the following potential benefits of smart heat controls?Benefits that were selected as most important (one being least important ten being most):

Percentage of respondents who assigned maximum importance to the following benefits of smart heat controls

Reducing tenant fuel bills

Supporting vulnerable tenants

Improving customer service

Improving repairs and maintenance efficiency

Reducing costs

Using data to better manage your housing assets

Increasing environmental performance/efficiencies

Reducing CO2

A

B

C

D

E

F

G

H

A

B

C

D

E

F

G

H

58%

50%

42%

38%

33%

29%

21%

17%

10% 20% 30% 40% 50% 60% 70%



A

B

C

D

E

F

G

H

9.1

8.4

8.3

8.3

8.2

8.2

8.1

7.9

Reducing tenant fuel bills

Ranked importance of potential benefits:

Improving customer service

Supporting vulnerable tenants

Improving repairs and maintenance efficiency

Reducing costs

Increasing environmental performance / efficiencies

Reducing CO2

Using data to better manage your housing assets

A

B

C

D

E

F

G

H

This question revealed some really interesting and surprising answers. In an age where cost efficiency and saving money is believed to be an ever increasing priority, it is in fact the tenant support and welfare related answers that came out as the most desired benefits.

This is even more surprising when you consider that many of those surveyed are asset managers whose primary consideration is the management of housing stock value.

The results possibly suggest that the financial benefits of smart heat controls to landlords require greater explanation and clarification, whereas the benefits to tenants (such as reduced bills, greater control and improved customer service) are more obvious.

Please rate the importance of the potential asset management value of smart heat controls? (one being least important ten being most)

3 English Housing Survey 2014-15 (Ministry of Housing Communities & Local Government 2017) https://www.gov.uk/government/statistics/english-housing-survey-2014-to-2015-headline-report



Question three focused specifically on the potential asset management value of smart heat controls.

Although the previous question suggests that tenant welfare was superseding asset management in terms of desired benefit, the ability to better manage assets through access to real-time data is being marketed heavily by suppliers.

The highest rated potential benefit was the ability to identify high levels of condensation or mould growth. This is unsurprising when you consider that excess humidity, damp and mould growth is a well-recognised and highly damaging challenge in social housing.

Mould causes millions of pounds worth of damage to properties every year – with tenants and landlords often in disagreement as to who is responsible.

Mould is present in almost half of UK homes, with severe cases affecting over 598,000 properties. A significant majority of these belong to social housing providers for whom this is a long standing

3problem, and the costs are substantial .

The second highest rated potential value was identifying potential boiler failure. As with mould growth, boiler maintenance is costly, both in terms of time and materials, as well as being disruptive to tenants.

Most housing associations follow a scheduled boiler maintenance model – visiting boilers at regular intervals regardless of performance. Smart heat controls have the potential to not only identify boilers before they fail, but also allow landlords to prioritise repairs based on need.

It is surprising that identifying over and under-heated homes is rated comparatively low in importance by the respondents, but this is perhaps because it is framed as an asset management rather than a tenant welfare question (supporting the findings from the previous question).

The question which attracts the highest percentage of negative responses relates to measuring the performance of various hardware/kit, which may require further explanation.

8.3

8.18

7.6 7.5

A B C D E

A

B

C

D

E

Identifying potential high levels of condensation or mould growth in homes

Proactively identifying potential boiler issues and failure

Identifying poorly insulated homes

Measuring the performance of various hardware/ kit over time I.e. boiler, insulation, tanking

Identifying over or under heated homes

What are the two main barriers to the adoption of smart heat controls?



Two clear barriers to adoption are identified.

In a market that is increasingly sensitive to high capital expenditure, and ensuring whole life return on investment (moving costs to operating expenses), it is unsurprising that upfront capital investment is seen as a key barrier to adoption of smart heat controls.

As a relatively new product, landlords will be mindful of rapidly evolving hardware and software, and will be anxious to ensure that an investment isn't made on 'yesterday's technology'. The more service providers can take responsibility for managing technology on an ongoing basis, the less risk to the landlord.

This sensitivity is reinforced by the second highest scoring answer 'confusion over differing and/ or conflicting technologies'. Many landlords will wait for clear evidence as to which technology and platforms represent the least risk and are most likely to deliver return on investment.

As with any new or rapidly evolving market, this evidence will be generated by pilot programmes and early adopters, both of which are now occurring.

Manufacturers and suppliers will need to examine service or licensing models, de-risking purchase and ensuring landlords can keep pace with future advancements in technology.

One recurring theme highlighted via the 'Other – specified' box option was a lack of a business case for smart heat controls, or cost vs. benefits.

10% 20% 30% 40%

A

B

C

D

E

34%

12%

32%

14%

8%

A

B

C

D

The capital investment

A lack of information

Confusion over differing and / or conflicting technologies

Other priorities

Other - specified E

Are you aware of the difference between passive and active smart heat controls?

A46%B

54%

A

B

Yes

No

If yes, do you see passive or active controls as the more viable option for your homes?



For those respondents who did understand the difference between passive and active controls there was again a 50 / 50 split as to which system will prevail over the long term.

Passive smart heat controlsSensors allow the system to automatically learn when a home is likely to be occupied or empty, so can automatically pre-heat or pre-cool the house. The occupier has the bare minimum of contact with the controls.

Active smart heat controlsThe occupiers are given instant control of heating via an app on web enabled mobile devices. Sensors still monitor the home environment supplying data for the benefit of the landlord and occupier.

A55%B

45%

A Passive The main reason given for selecting a passive solution: The less involvement the tenant has with the heating, the less training and resources required.

B Active

The main reason given for selecting an active solution: Tenants get instant results from making changes.

What fuel poverty initiative does your organisation undertake?

10% 20% 30% 40%50%60%70%80%90%100%

A

B

C

D

E

F

G

H

I

Information on website

Training for staff and tenants

Seasonal information campaigns

Dedicated members of staff

Media information campaigns

Online video information

Door-to-door campaign

None

Tele information campaign

A

B

C

D

E

F

G

H

I



Thank you for taking the time to read this report. We hope you found it useful.

Our 2018/19 survey is already online, so if you'd like to offer your opinions on smart heat technology in social housing then please visit SurveyMonkey.co.uk/r/SmartHeat

14

For more information: [email protected]

+44 (0) 1179 788731

www.securemeters.com

Smart heat technology in social housing · 13 What fuel poverty initiative does your organisation undertake? 2 Smart heat technology in social housing Market Intelligence 2018. 3

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