We frequently hear news reports on the problems people face with their gas and electricity suppliers: high charges, poor customer service and confusion over tariffs. But what about the 200,000 UK consumers whose heating is supplied by district or communal heating schemes?
District heating is where heating is provided from a central source and is distributed via a network of pipes to multiple buildings, sometimes including homes. Residents in these homes don’t get a choice as to who their supplier is or what price they pay. However if district heating is well designed and implemented it should lead to lower bills. So what are consumers’ experiences of district heating?
To help answer this, Changeworks recently carried out research with residents living in social housing district heating schemes. The project was funded by Eaga Charitable Trust and The City of Edinburgh Council.
The good news is that three-quarters of the residents we surveyed said they preferred district heating to their previous heating system. Over half felt their home was easy to keep warm and only 11% wanted to put their heating on for longer.
Our research shows that residents with district or communal heating pay for their heating in different ways. Some pay for it along with their rent, termed ‘heat with rent’, which is typically a fixed charge not tied to the amount of heat consumed. Others are charged per unit of heating, as with standard gas or electric heating, and pay via prepayment meters, direct debit or quarterly billing. There are pros and cons to different approaches and we didn’t find a consensus amongst residents or landlords as to the best option; preferences vary. The most successful approach for rolling out a scheme is likely to be providing multiple payment options.
Our research findings are encouraging, particularly when compared to the high levels of consumer dissatisfaction with district heating reported by Which? research published earlier this year. Yet we found some similar concerns amongst some consumers:
- High standing charges
- A lack of information about the pricing structure and, in some cases
- A concern about the lack of being able to switch supplier.
We’re pleased to see the launch of the Heat Trust – an initiative providing district heating consumers with a greater level of protection and an independent process for settling disputes.
Our research also explored the perspectives of the housing associations and Councils running the schemes, especially around billing. Findings highlight the complexity of managing schemes and the challenges landlords face in designing and implementing an effective billing system, including issues of debt, high administrative costs and heat meter errors. We’ve produced recommendations for social landlords for future or current schemes, which are available in our research report.
Clearly, there is still a lot of work to be done to maximise opportunities presented by district heating and ensure that consumers are getting a good deal. We’re delighted to have been awarded a grant by the Joseph Rowntree Foundation, working together with the Centre for Sustainable Energy, to further explore how social landlords are managing district heating schemes and assess if schemes are meeting carbon reduction and fuel poverty goals. If you’re a landlord who has considered or installed district heating, we’d like to hear from you, please get in touch.
 Communal heating is similar – it is where one heat source serves multiple homes in the same building.