Martyn Bridges, Director of Technical Services at Worcester Bosch offers merchants his perspectives on the 2023 heating market and looks ahead to what 2024 could have in store.
It is always with optimism that we look forward to the new year, although I suspect 2024 will be much the same as 2023. Over the past year, we have seen a return to seasonality sales, whereby we had a very busy Q1 and part of Q2 before it went decidedly quiet during Q3. However, we are optimistic about a return to buoyant sales in Q4.
What these trends demonstrate is that we are returning to a situation similar to what we were experiencing before the COVID-19 pandemic and the war in Ukraine, which both had a significant impact on supply chains.
“The installation of heat pumps and hybrid systems offers up different challenges for merchants, however the value of those sales will always be more than a boiler, so — alongside the associated accessories needed for installation — that will certainly be beneficial.”
Rising heat pump and hybrid installations
From a technology perspective, we would expect gas boilers to remain the most dominant form of home heating technology to be sold in the UK market. However, there will likely be increasing sales of heat pumps and hybrid heat pumps. As of October 23rd, 2023 for example, homeowners were also able to apply for the increased Boiler Upgrade Scheme grant of £7,500 to help with the cost of replacing their existing gas or oil-fired boiler with an air-to-water heat pump or ground-source heat pump.
The installation of heat pumps and hybrid systems offers up different challenges for merchants, particularly from a storage space perspective where a heat pump, the associated equipment and the hot water storage cylinder all take up valuable racking and floor space. On the positive side however, the value of that sale will always be more than a boiler, so — alongside the associated accessories needed for a heat pump installation — that will certainly be beneficial.
As they have experienced in 2023, it’s likely most merchants will be hosting an increasing amount of breakfast mornings and meet-the-manufacturer-type events, offering them the opportunity to meet the vast number of installers coming through the doors to show and discuss the new products.
Key policy updates expected
In 2024, we will also hopefully see the consultations on various policy proposals such as the Clean Heat Market Mechanism, off-gas grid situation and Future Homes Standard be published. The results will give us more of an indication of what products and tech will need to be invested in.
One thing for sure is that the ban on oil, LPG and coal-fired boilers — which was originally expected in 2026 as part of the government’s Heat and Buildings Strategy — has now been deferred to 2035. From an industry perspective, this means that installers can continue installing traditional boilers for the next decade and so merchant branches in rural areas will still have to hold their normal off-gas grid heating solutions up until 2035 at the earliest.
As we enter (what is likely to be) an election year, there is the prospect that 2024 could be a volatile time on the political landscape. 2023 has been interesting and at times, very unstable with several by-elections in constituencies previously held by the Conservatives resulting in other parties taking control. At the same time, there has also been a high turnover of cabinet ministerial positions and we have again seen another change in energy minister take place.
However, overall, we expect that 2024 and 2023 will be very similar for merchants and the home heating industry in general, but just with a growth expectation for heat pumps and hybrid systems, with boiler sales remaining around the same level as in previous years.
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