Recent legislative developments are prompting commercial property operators to re-evaluate their building services installations. Jeff House examines the opportunities.
When evaluating potential improvements to the energy efficiency of a building, the production of domestic hot water should be a primary consideration. It is now widely accepted that installing separate systems, serving space heating and hot water production within a building, can deliver the most efficient solution. This allows the use of appliances closely matched to the load of each respective service and negates seasonal inefficiencies, typically associated with calorifiers heated by main heating plant running at partial load.


Indeed, for buildings with high peak hot water demand such as schools, hotels, health care, sports facilities and the like, this separated approach has been adopted for many years. However, recent advances in building insulation levels and thermal efficiency, driven by Building Regulations Part L, have seen hot water overtake space heating as the predominant load in many more applications, most significantly in district or communal residential schemes.

With intelligent application of new technology, not only can the energy efficiency and emissions of a building be drastically improved, assisting with corporate social responsibilities and green credentials, but there are associated financial benefits.
In many cases, the replacement of older, inefficient plant with the latest condensing gas-fired water heaters can represent a sound investment, justified in terms of fuel savings through improved efficiency alone. Case studies have seen end users reporting a reduction in gas use for hot water production of up to 65 per cent.

With the introduction of the Enhanced Capital Allowance Scheme (ECA), it is now possible for businesses to claim 100 par cent first-year capital allowance against investment in energy-saving plant. Many condensing gas-fired water heaters are eligible for this incentive, providing they are listed on the ECA Scheme Energy Technology List.

Significant improvement

With the best new technology, gas fired condensing direct fired storage water heaters are reaching efficiencies up to 109 per cent (net), a significant improvement over older equipment. Even so there is still potential for yet greater efficiencies via the integration of low to zero carbon technologies (LZC).

In the case of water heating, a particularly effective strategy can be the use of LZC technology to pre-heat mains fed storage prior to feeding into a condensing gas fired water heater. Using low carbon, sustainable energy, to raise the temperature of mains cold water, means that the gas-fired water heater has a reduced duty, thereby consuming less fossil fuel in reaching the required delivery temperature.

For example, a well designed solar thermal installation, using this principle can satisfy all of a building's hot water needs in summer months and a smaller proportion in winter, with an average annual contribution (solar fraction) in the region of 30 per cent upwards.

Providing sufficient roof space is available for installation of collector arrays, solar thermal can easily be integrated into an existing building, therefore offering a simple energy efficiency improvement when installed in conjunction with a condensing water heater.

This design principle can also support the integration of heat pumps to provide pre-heat duty, again increasing overall system efficiency and lowering running costs.

The recently published Renewable Heat Incentive (RHI) offers a financial incentive to install LZC heating technology in England, Wales and Scotland with commercial installations supported from the outset.

Administered by Ofgem, RHI will offer quarterly payments to owners of renewable heating installations based upon a metered approach with tariff levels per kWh of generated heat varying by technology type. For example, useful heat generated by a solar thermal array will be eligible for a tariff rate of 8.5 pence/kWh.


Eligibility for RHI will depend upon technology type and size of installation and will require both product and installer to be registered under the Microgeneration Certification Scheme (MCS) for systems with a rated thermal output lower than 45kW. At this stage, from the technology types mentioned previously, solar thermal and ground source heat pumps are supported by RHI while, unfortunately, air source heat pumps are not included (although this is subject to review in 2012).

Another Government scheme set to drive energy efficiency and emissions reduction in existing buildings from 2012 is the Carbon Reduction Commitment Energy Efficiency Scheme (CRC). This is targeted at larger organisations with at least one half-hourly electricity meter and an annual electricity consumption over 6,000 MWh and it is thought that some 5,000 organisations will be required to participate fully.

Emissions under scrutiny

Under CRC, organisations are obliged to record, monitor and disclose CO₂ emissions then purchase allowances equal to their emissions for each year at a rate of £12 per tonne of CO₂. In these organisations, it is anticipated that emissions from heating and hot water systems will come under some scrutiny with a view to cost effective improvements.

With the continual drive towards a low carbon economy, there are a number of Government lead schemes targeted at reducing energy use and emissions in existing commercial property which will lead to many opportunities in the replacement market.