Heat network metering platforms: when is it right to retrofit?

Retrofitting metering, billing and payment systems to existing heat networks can seem like an impossible task for energy managers. Even when there’s a strong business case for upgrading to a modern system, the cost and potential disruption can be off-putting. Is it worth it, asks Insite Energy’s Operations Director, Andy Leatherland?

Being stuck with a metering, billing, and payment system that’s not fit for purpose can cause big problems for heat network providers and energy managers alike. Individual property heat metering and prescribed billing formats are now a legal requirement in most situations, yet there are still an estimated 342,000 unmetered properties on heat networks. Many more have only basic or poorly functioning meters that lack modern data and analytics technology, let alone meet legal specifications. Commonly, this leads to higher bills for both landlords and residents.

With the forthcoming amendment to the Heat Network (Metering and Billing) Regulations 2014, enforcement is expected to be even more stringent than before. This will force many organisations to retrofit new metering and billing equipment when they otherwise might have continued indefinitely with sub-optimal systems.

Other pressing business concerns, too, are driving the retrofit trend. Credit billing without adequate debt control often results in a significant and surprisingly quick build-up of resident arrears, leaving heat network providers unable to recover the site’s energy bill. Switching to Pay-As-You-Go (PAYG) minimises this risk by enabling self-disconnection of individual accounts following non-payment, and the ability to set-up simple, proportionate payment plans to recoup old debt that previously was challenging to collect.

Even when the need is less urgent, there can be compelling reasons to retrofit or switch to a new metering supplier. Restrictive contracts, crudely designed systems and poor-quality hardware can ultimately end up costing a company and its customers more in energy use and maintenance. At Insite Energy, we are regularly called in to upgrade systems because clients want to make heat more affordable, fair (meaning users only pay for what they use) and to improve customer service, through technology and metering and billing services. Giving residents better data about energy usage generally reduces consumption, resulting in further savings, so return on investment can be quite quick, ultimately, leading to reduced tariffs.

Sometimes the decision to retrofit comes from the desire for a one-stop-shop offering or a move away from restrictive closed-protocol systems. The latter was the case when a G15 housing association retrofitted wireless PAYG metering and billing into 75 properties at a large existing development in London, switching from a credit billing system. As well as rapidly mitigating debt risk, the housing association now benefits from cutting-edge data analysis.

Is the gain worth the pain?

Despite the potential gains, energy managers can be reluctant to replace legacy systems because it may be both expensive and challenging to execute. It can cost more to retrofit a PAYG system than to install it during a building’s construction, and even a modest outlay can be hard to cover when there’s no budget.

Added to this is the fact that residents may initially be opposed to a change like this that may lead to an increase in their bills (through the introduction of accurate readings) or require them to make regular payments, as well as causing upheaval and inconvenience during the changeover. Energy managers will be familiar with stories of installations taking months or even years to complete due to difficulties accessing tenants’ homes. No one wants to pay for site visits, only for contractors to be unable to get in to do the work on arrival.

These concerns can lead energy managers to feel they must stick with what they have, throwing good money after bad to fix redundant or poorly functioning technology, retaining exposure to bad debt, even though the potential savings from upgrading can more than repay the investment in the long run.

Avoiding pitfalls

Retrofitting can be much easier than people think. Good preparation with the right partner can mitigate most potential difficulties, while financial options such as hardware leasing, as offered by Insite Energy, can reduce upfront costs to just the labour element, making them much more affordable. The benefits of PAYG are worth the effort and when it comes to wireless PAYG retrofits, the process is much easier as there is no need for an existing, good quality M-Bus network.

A good metering system supplier will start by consulting with you in depth, to really understand your requirements. If possible, choose a company that offers a range of platforms that can be tailored according to need. At Insite, we offer Secure and Guru meters and now, even a digital, low capital expenditure, app-based PAYG system called KURVE.

We have spent the past two years studying how retrofits impact users and applying that learning to make the process as smooth as possible. Communicating effectively with residents about the installation process and the benefits of the new system – such as accurate billing, improved customer experience, and cost savings – is key to avoiding friction and delays. We’ve found the best approach is for our clients to communicate with tenants directly, with our help behind the scenes in the form of an online scheduling system. We also often attend residents’ meetings before, during and after a retrofit to provide reassurance, answer questions and resolve any issues.

There’s much that can be done to minimise inconvenience for everyone. We use dual-trade engineers who can complete the electrical and mechanical work in one visit, as well as being uniformed, fully PPE-equipped and trained in the appropriate etiquette for working in people’s homes. Equipment and parts are tested to ensure they’re functioning perfectly beforehand. Our online scheduling system makes it simple to book a convenient, password-protected appointment, as well as sending an SMS reminder and notification when the engineer is en-route. This approach can reduce retrofit completions from a couple of years to just a few months.

Understanding the benefits of a retrofit can go a long way to assuaging doubts. Insite’s in-house energy analyst can collect ‘before and after’ meter data, providing quantitative evidence of debt reduction and improved efficiency. We’ve yet to encounter a company that regretted making the move to a better system. www.insite-energy.co.uk