Overview - UK Smart Thermostat Market - Cleantech Hubs
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Overview - UK Smart Thermostat Market
1The market for smart thermostats in the United Kingdom is driven by five key
factors
The growth of the market can be attributed to a new housing construction trend with an increased adoption rate
PREDICTED STRONG of smart thermostats. Another supporting driver is the UK legislature for energy efficiency. Combined with
MARKET GROWTH technological improvements and increasing energy prices, the market for smart thermostats is predicted to grow.
GROWING Consumers are increasingly interested in efficient energy consumption, with the main reasons being increased
CONSUMER control and an opportunity to save money. They are also increasingly interested in the possibilities of the Smart
ACCEPTANCE Home, and the convenience and comfort it offers.
PUBLIC AND PRIVATE The UK government are encouraging consumers through initiatives for a smarter energy utilisation. Additionally,
SECTORS the “Big 6” energy companies in the UK are actively working with energy efficiency and smart thermostats to
COMMITTING keep up with the market trend.
IMMATURE MARKET
The market penetration of smart thermostats in the UK is currently low, but the competition is increasing through
WITH INCREASING
new emerging technologies. Service and maintenance in the sector are at low levels.
COMPETITION
SUBSTITUTE Substitute solutions such as insulation of properties and metering is a trend driven by UK regulations. Other
SOLUTIONS substitute solutions include traditional heating control.
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BUSINESS SWEDEN 2A glance at established players on the UK smart thermostat market, and where to
find their products
tado° makes smart thermostats and smart Hive makes smart connected thermostats In their heating and cooling product
AC controls for heating and cooling. They for heating. They offer their products as a segment, Honeywell makes smart and Wi-
offer their products via their website, service by gas and energy service providers, Fi thermostats which they provide via
through retailers and online stores, through and as add-on services by boiler installers. retailers and wholesalers within HVAC and
add-on services via boiler installers, and as Hive’s UK partner is British Gas. technology, and through add-on services
a service by gas and energy service from boiler installers.
providers.
Besides their home security products, Nest Netatmo specialises in connected objects, of The Genius Hub team offers a zoned smart
makes smart thermostats which they which smart thermostats is a category. heating system for properties. Their
provide via retailers and wholesalers within Their products are offered as a service via product kits can be purchased directly via
HVAC and technology, as a service by gas gas and energy service providers, or as an their website.
and energy service providers, and as add-on add-on service from boiler installers.
services from boiler installers. UK partners
to Nest include Npower and various boiler
installers.
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BUSINESS SWEDEN 3Owner occupied, semi-detached houses is the most common form of housing in
the UK
DETACHED HOUSES SEMI-DETACHED HOUSES FLATS AND APARTMENTS
(~5.5 million) (~11.3 million) (~4.2 million)
26% 20%
% of housing stock 54%
7,2% 14,7%
7,3% 36,8%
Residential 25%
19,6%
occupancies 85% 65,7% 38,2%
Owner occupancy Half of the UK residential housing market consists of semi-detached houses which are
Privately rented
primarily owner occupied. In detached houses, owner occupancy is a clear majority. Only
20% of the total housing stock consists of flats and apartments where owner occupancy is
Socially rented less common, instead the majority is privately or socially rented (social housing).
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BUSINESS SWEDEN 4Across all residential occupancies, boilers are the dominant heat technology
OWNER OCCUPIED PRIVATELY RENTED SOCIALLY RENTED
(~14.8 million) (~4.8 million) (~4 million)
20% 17%
% of housing stock 63%
% tenures with boiler
94% 82% 83%
11% 6% 11%
% with smart meter
Largest share of the market is the
Private renters have lower incentives Socially rented houses have a higher
owner occupancy, who likely have
to invest in home technology. More share of socioeconomically weak
higher incentives to reduce energy
rigid energy contracts limits ability to tenants. Energy contracts are usually
costs and a higher willingness to
choose energy service provider in pre-payment form.
invest in home technology.
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BUSINESS SWEDEN 5Individual gas boilers supplies 80% of the total residential heating market
Market share 2016 Market share e2020
(Installed capacity) (Installed capacity)
Low gas prices combined with a well
established gas network suggests that
gas is likely to keep high market share in
the mid-term future.
Gas boiler 81% 79% Oil boilers market share expected to
decline due to fast replacement to gas or
electricity boilers mainly driven by the
ECO* scheme.
PV installations driven by Government
tariffs available through RHI (Renewable
Heat Incentive).
Oil boiler 6% 5%
Heat pump (ground- and air sourced)
installations driven by Government tariffs
Solar thermal 2% 2% available through RHI (Renewable Heat
Incentive).
Heat pumps 2% 2% DH is driven by Government investment
into DH schemes. Market is expected to
grow with 2-3% a year.
District heating 2% 4%
Other heating technologies are expected
to grow, including wind- or pure electrical
Other 8% 11% heating.
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BUSINESS SWEDEN 6However, the strongest trend in new housing is solar thermal, heat pumps and
district heating
Market share 2010 Market share e2020
(In terms of units sold) (In terms of units sold)
While being the consistent choice for
15% already existing buildings, boilers are
expected to be used much less in new
buildings
Boilers 81% The solar thermal market experienced a
recessive period in 2012 and 2013, but is
18% expected to grow significantly and
surpass boilers as heat technology of
choice in newly built housing
Currently with approximately 20 000
installations yearly, heat pumps will come
Solar thermal 7% to dominate the new housing
construction market as heating
51% technology
The district heating market is driven by
Heat pumps new construction and rising energy costs,
10%
and will reach the same level of sales as
boilers by 2020
15%
District heating 2% Micro CPH will not see any substantial
growth, and remains quite insignificant in
market size
Micro CPH & FC 0% 1%
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BUSINESS SWEDEN 7Although demand for boilers is predicted to remain strong overall, it is expected
to lose market share to heat pumps in new housing
The majority of sales originates from the The total market share of boiler in 2020* is
existing housing stock* expected to be approx. 88%
Boilers
2500000
Heat pumps
8% Solar thermal
2000000
District heating
Micro CHP & FC
1500000
1000000
500000
Boilers
92% Heat pumps
0 Solar thermal
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Sales to existing housing Sales to new housing
*Forecasted sales to new and existing housing in terms of units sold
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BUSINESS SWEDEN 8You can also read
