ground source heat pump solutions for social landlords chris davis commercial director, kensa heat...

Ground Source Heat Pump Solutions for Social Landlords

Chris DavisCommercial Director, Kensa Heat Pumps

Tackling fuel poverty through renewable heat

• Client: Trent & Dove Housing

• Project: Installation of ground source heat pump systems, replacing electric heating

• Supplier: Kensa Heat Pumps

• Installed by: Kensa Contracting, GeoDrill, J. Tomlinson

• Number of properties: 133 bungalows

• Funding: Non Domestic RHI and Energy Company Obligation

• ECO supplier: EdF Energy

Ground source heat pumps in action


Ground source heat pumps in action

• 133 bungalows, across 15 sites• Off the gas grid, in rural

Staffordshire• Heated by night storage heaters• Elderly residents


Ground source heat pumps: great idea, but….

Typical social landlord reaction to ground source heat pumps:“Like the technology in theory, but….”• Cost is a barrier• Complex, high risk, difficult• Poor experiences with other technologies• Don’t have enough information to influence others

All can be an issue, but not if…


• The scheme is well thought through and planned;• You work with specialists with a track record

in the social sector;• The right properties in the right locations

are selected;• You take advantage of ALL the funding

options available;• You consider ALL the benefits

Ground source heat pumps: great idea, but….


A different approach for social landlords

• A different approach for social landlords• Turnkey delivery• Innovative approach to the RHI• Support with up front capital

contribution• Longer term income stream• Fundable• Retrofit and new build


About Kensa

• UK manufacturer• Single technology solution provider• Established 1999• Based in Truro, Cornwall• Industry accredited• Over 4000 installations• Social housing specialists• UK market leader• Recently established delivery arm – Kensa Contracting


Ground Source Heat Pump Technology

• Highly energy efficient space and water heating solution• Electrically driven appliance• Moves solar energy from the ground

into the property• Utilises “collector” pipework buried

in the ground• Typically one unit of electricity

produces between 3 and 4 units of heat

Borehole

Hot water cylinder

Radiator system

Heat Pump


Ground Source Benefits

• Tenant Benefits• Lowest possible tenant heating and hot water

energy costs• Highest efficiency; unaffected by outside weather

conditions• Typical savings of around 50% vs night storage

heaters and 30% vs oil• No bulk fuel purchases• Lower standard rate electricity charges than split

tariffs• Reduces cost of other household electrical

consumption• Improved comfort, health, well-being, quality of life

Gas boile

r, 70% efficie

nt

LPG boile

r, 70% efficie

nt

Oil boile

r, 70% efficie

nt

Night stora

ge, 100% efficie

nt

Biomass pelle

t boile

r, 85% efficie

nt

HP, 250% efficie

nt

HP, 300% efficie

nt0

4

8

12

16

Heating System Running Cost p/kWh

Fuel cost p/kWh Fuel cost p/useful kWh



For a typical social home:• 8,000kWh heating/hot water per year

Electrically heated:• £784 per year running cost• + “supplementary” heating costs

Ground source heat pump heated:• £355 per year running cost

SAVING: £429 per year!

Gas boile

r, 70% efficie

nt

LPG boile

r, 70% efficie

nt

Oil boile

r, 70% efficie

nt

Night stora

ge, 100% efficie

nt

Biomass pelle

t boile

r, 85% efficie

nt

HP, 250% efficie

nt

HP, 300% efficie

nt0

4

8

12

16

Heating System Running Cost p/kWh

Fuel cost p/kWh Fuel cost p/useful kWh



Landlord Benefits• Planning exempt (no noise issues)• Lower CO2 emissions, improved

SAP ratings• Other building maintenance costs

reduced • E.g. less damp due to under heating

• Minimal service & maintenance costs• No mandatory annual safety inspection

• Minimal preventative maintenance

• Extremely low lifetime ownership costs• 20 – 25 year heat pump unit life expectancy

• >100 year borehole life expectancy


Renewable Heat Incentive

• Designed to support 2020 Renewable Energy targets • 15% of energy from renewable sources

• Tariff based payment• Aimed at covering additional costs of a renewable heat technology• Two streams• Domestic• Non domestic

• including residential district heating


Non Domestic RHI

• Opportunity for social housing (both new build and retro fit) to benefit from adopting district systems supported by the Non Domestic RHI and ECO

Domestic Non Domestic

Coverage Individual domestic properties Residential district, commercial

Includes retro fit Yes Yes

Includes new build No YesTariff payment 7 years 20 years

Measurement Deemed Metered

Paid on “Renewable” heat only All heat

Tariff rates Modest – requires fuel cost saving to produce payback

Attractive – GSHP rates recently doubled

Can be used in conjunction with ECO* No Yes


• Individual Kensa Shoebox heat pump in each home

“Micro District” ground source heating

• Shared ground array, serving 2 or more properties

• Designed, delivered and installed by Kensa

• Eligible as “district heating” for ECO and RHI purposes

• Scalable and versatile

• Each home has own radiators, hot water cylinder and controls

• No heat loss through district pipework

• No need to apportion energy bills

• New build or retrofit

• No need for a plant room


Energy Company Obligation (ECO)

• Provides an upfront capital subsidy• Typically 20-25% of the total cost

• Supports district heating schemes• District heating now confirmed as a primary measure

• Rural areas attractive

• Grant level dependent on CO2 savings• Displacement of electric heating is preferable

• Ofgem recently confirmed 40 year lifetime for district ground source heat pump systems

• EdF Energy has provided Kensa customers with over £1m in ECO funding for GSHP projects


The Unique Kensa Shoebox Heat Pump

• Designed to be installed inside the property;

• Small, compact dimensions – fits in a standard airing cupboard;

• 6kW model ideal for social housing retro fits;

• Ultra-quiet, using twin, low output compressors;

• Up to 65°C flow temperature (R134a refrigerant), so able to cope with domestic hot water with no need for back up;

• Designed for use with standard heating controls.


Feasibility & Design

Delivery

Compliance

& Support

Kensa’s process

• Feasibility study

• Clear cost and return analysis

• Property survey and EPC

• Geotechnical survey

• Full system design (incl MCS, borehole array, mechanical)

• Tenant liaison

• On site project management

• Drilling contractors

• Heating system contractors

• Commission and hand over

• Access ECO funding

• RHI compliance and application

• Comprehensive system warranty

• Remote access meter readings

• Ongoing technical support

• Responsive maintenance


GSHP System Costs and Returns

Typical 2 bedroom bungalow, 8000kWh/yr

Budget NSH re-placement, £3,500

Additional landlord contribution, £7,000

ECO, £3,000

INSTALLED COST:

£13,500

Investment costs Income streams£0

£5,000

£10,000

£15,000

£20,000

£25,000

Budget NSH re-placement cost,

3500

Additional cost (before ECO subsidy), 10000

ECO subsidy, £3,000

RHI over 20 years, £16,500

Inv e s t me nt c os t s v s i nc ome s t r e ams

TOTAL RHI INCOME OVER 20 YEARS: £16,500


Kensa funding

• Options for “micro-district” or individual properties• Kensa finance packages typically cover the borehole

and ground source heat pump installation• RHI income offsets cost of finance• Landlord may need to provide some contribution

towards the internal heating system• Up to the value of a NSH replacement system

• Dependent on energy demand/house size, fully funded schemes are possible


New build• Non Domestic RHI model also applies in new build• Not possible with Domestic RHI• Ofgem has confirmed RHI payments are allowable even if

in receipt of an HCA grant (although some conditions apply)

• Allows social housing new build to benefit from:• 20 year RHI income stream• Cost effective • Lowest possible tenant running costs• Lowest lifetime ownership costs – long service lifetime and

no mandatory annual servicing requirement

Example: New Linx Housing• 53 unit development• Micro district ground source heat pump system• Accesses funding through HCA and RHI


Conclusions

• Changes to the Non Domestic RHI tariffs have created opportunities in the social housing sector for district ground source heat pump systems

• Such systems are technically robust and can be delivered at lower capital cost (when compared to “stand alone” single property installations)

• ECO funding can provide upfront capital subsidy, to circa 25% of the project cost

• Long term financial returns can be compelling

• GSHP-based systems deliver the lowest running costs to the tenant and the lowest lifetime ownership costs for the landlord

• Both retrofit and new build projects will benefit from the RHI income

ground source heat pump solutions for social landlords chris davis commercial director, kensa heat...

Documents

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kensa heat pumpsinstalled

fuel poverty issue

actiontackling fuel

iftackling fuel poverty

renewable heating solutions

social tenants

cost of heating