Christian Albrecht, Business Development Director, Naked Energy
To say that the war in Iran has shifted people’s opinions on energy would be quite the understatement. Fuel prices skyrocketed by 90% in the first week of the conflict alone, exposing just how vulnerable gas can make a business or a consumer to financial struggles.
It’s hardly surprising then that renewable heating solutions have dramatically increased in popularity. For example, Octopus Energy reported that its heat pump sales had increased by more than 50% within a month of the conflict starting.
This could well be a watershed moment for the provision of clean heat, and it’s very welcome given 75% of the world’s heating is provided by fossil fuels.
However, the debate all too often is being framed as whether you should stick with a boiler or get a heat pump, especially for businesses. Heat pumps are absolutely essential for the net zero transition, but all too often they present financial and operational hurdles when considered as the primary method of on-site heat production.
Businesses face a ‘heating trilemma’ when deciding how they should heat their buildings; sustainability, affordability and security. It’s clear that sustainability is pushing the
de-gassification agenda, and while heat pumps are certainly more sustainable than gas boilers, they do not necessarily grant affordability or security.
On affordability, businesses need huge amounts of capital to decarbonise their heating supply. For example, for a large industrial site it can cost upwards of £10 million to install a low or zero carbon heating system. No matter how desperate they may be to switch to get off gas, the upfront cost makes switching impossible for many. Beyond the upfront investment, in markets where the spark gap is similar to a heat pump COP, there can be limited or even negative OPEX impacts and therefore no financial savings with which to pay back the CAPEX.
Operationally, electrification of heat also presents a perceived risk to business critical heat supply, whether the site is a hotel with domestic hot water or pool heating demands, or a large industrial site using steam for critical process heating. Transitioning from the familiar gas boiler to a new technology raises questions on security of supply and resilience. Everyone from corporate engineers through to site facilities managers need confidence in rigorous design, integration, and operational strategies.
Security is more than just consistency of supply, it also relates to commodity markets. Heat pumps have a key limitation related to security in that they rely on the grid to power them. Given gas still sets the price of electricity (for now), businesses relying on heat pumps aren’t actually insulated from geopolitical price shocks.
Furthermore, Neso is currently dealing with a huge backlog in projects waiting to get connected to the National Grid, with some projects waiting up to 15 years. For businesses who need to boost their security now, this simply isn’t good enough.
The war in Iran could be a watershed moment for renewable heating, but if the most common solution doesn’t provide affordability or security, the reality is that many businesses will not switch.
That’s why we must think bigger than simply ‘heat pump vs boiler’, and instead incorporate grid-edge technologies into the mix.
These solutions generate energy at or near the point of demand. They are distributed solutions operating independently of the grid, providing several answers to the heating trilemma. They’re sustainable because they harness energy from the environment to produce renewable power or heat, they’re affordable as the energy is free once you have the equipment on-site, and they give security through reduced commodities exposure and embedded energy storage solutions.
What’s more is that these technologies are not just pie in the sky ideas, but are already out there making a difference. Solar thermal is a clear example. By capturing the sun’s energy directly as heat, solar thermal systems can deliver high-quality low-carbon heat for businesses without adding any electrical demand onto the grid.
What’s more, they allow us to think beyond the ‘heat pump vs boiler’ debate because grid-edge technologies can easily be integrated with existing heating systems. For example, you can use solar thermal to act as a source for a heat pump rather than relying on ambient air, which requires less power needing to be drawn from the grid.
Many design engineers already specify solar photovoltaics alongside a heat pump to reduce the amount of grid power demand, but they have not considered that you can also reduce grid demand by raising the temperature of a heat pump’s heat source from ambient. For industrial customers this is a huge opportunity, as many of them also have low-grade waste heat sources which can be harnessed and stored alongside heat from the solar thermal array. This free heat has huge value if captured and solar thermal is an enabling technology to upgrade the temperature into a usable heat source. For commercial customers with simultaneous heating and cooling demand such as hospitals, heat can be recovered from the condenser side of a chiller and paired alongside solar thermal as an effective heat pump source. Heat recovery and solar thermal are both hydronic systems so thermal storage can be leveraged across 2 assets, improving project ROI.
Customers who are on gas can also use grid-edge technology to slowly transition towards a completely renewable heating solution by gradually installing more tech to displace portions of gas. This has the short-term effect of reducing bills, which frees up funds to be saved over the long-term for the eventual shift to a heat pump.
The ‘heating trilemma’ is not an easy task to solve. It’s quite clear that gas boilers are not the future, and while heat pumps have a large part to play in resolving the trilemma, we can’t expect them to be the silver bullet to fix this problem on its own. Achieving sustainability is straightforward, but to achieve affordability and security one must consider the full system arrangement and evaluate symbiotic measures such as heat pump with solar thermal and waste heat recovery. This will help to address affordability through significantly reduced OPEX, and security through higher efficiency systems which are less grid reliant.
This article appeared in the July/August 2026 issue of Energy Manager magazine. Subscribe here.
