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Prepayment and heat networks: learning the lessons

15 July 2019

Prepayment & heat networks: learning the lessons [ 3.3 mb]

In order to meet government targets to decarbonise the way we heat our homes, the proportion of households served by heat networks (including district heating and community heating) is expected to grow from 2% of households to 1 in 20 by 2030. 

It is inevitable that people living in homes served by heat networks will be using prepayment meters (either by default, by choice or as a debt repayment option). Following the 2018 CMA market study into heat networks, Government has confirmed that it is minded to regulate the heat network market.

It is essential that Government and the regulator understand the experiences of all consumers on heat networks, including those using prepayment meters, to ensure any future regulatory regime is fit for purpose.

This research explores the experiences of those on heat networks that also use prepayments meters.  The report makes recommendations to improve the experiences of these consumers and help prevent people being disconnected from their heating and hot water. 

Heat network suppliers should take action to ensure the following: 

  • All consumers know how to get help and redress when something goes wrong.

  • Consumers understand how their heating system & meter work.

  • Smart prepayment meter users must be offered an In Home Display (IHD).

We’ve recommended that the government uses its forthcoming white paper to extend the energy regulator’s remit to include heat networks this year.

The Government and future regulator should:

  • Place consumer protections at the centre of new regulations for heat networks. In order for heat consumers to have an independent voice and to benefit from the full protections a statutory consumer advocate must be established.

  • Ensure the future regulator establishes required communication standards. The regulator should look to best practise established on supplier communications in the gas and electricity market.

  • Consider introducing a requirement to install smart meters on all new heat networks. This would require minimum standards to ensure a baseline of interoperability and consumer functions.

Our report is based on the research we commissioned by Future Thinking, they produced a separate research report [ 3.4 mb] to present their findings.