After years of growth, sales of domestic boilers in the UK dropped by more than five percent after new regulations came into force. Is this the trend for the future, or will boiler sales recover? Andrea Kafer investigates.
The growing threat of climate change has led to unprecedented global agreements to reduce emissions of greenhouse gases. Foremost among these is the Kyoto Protocol, signed in 1997, which laid down emissions targets for the world's most polluting nations.
Further international and national regulations and carbon reduction initiatives followed, for example the UK Climate Change Programme and the Energy Performance of Buildings Directive (EPBD). The Directive has placed an obligation on the UK to radically improve the energy efficiency of new and existing buildings.
The Building Regulations, specifically Part L that addresses the conservation of fuel and power, have responded to the need for step-changes in the energy performance of new and refurbished buildings. Part L covers a variety of energy efficiency measures in buildings, but one of the more significant measures is the amendment dealing with boiler efficiency.
In 2005, the minimum SEDBUK efficiency (Seasonal Efficiency of Domestic Boilers in the UK) in gross calorific value was raised to 86 percent for gas-fired boilers and 85 percent for oil-fired boilers.
These tougher requirements in Part L have sent shockwaves through the structure of the UK heating market as they effectively require most new and replacement domestic boilers to be of a condensing type.
The de-stabilised market
After years of growth, sales of domestic boilers in the UK dropped by more than five percent. Besides a negative growth in the residential renovation sector in 2005 (over 75 percent of domestic boilers are sold into this segment), it is believed that some end-users possibly hesitated over whether to buy the more expensive condensing boilers, preferring instead to defer replacement.
However, 2006 sales figures show that changes in the Building Regulations did not leed to a continuing downward trend. 2005 was just a transition year, and end-users did not switch to alternative technologies like heat pumps.
The new market structure
In 2006, the entire market for domestic boilers reached a level just above that of 2004, despite the evidence that the residential refurbishment market experienced negative growth in 2005-2006.
Comparing 2004 with 2006 figures, the sales volume for non-condensing boilers dropped by around 74 percent. By contrast, figures for condensing boilers rocketed, growing by more than 300 percent over the same period.
Boiler manufacturers were prepared differently for those changes, as significant shifts in market shares have occurred.
Sales of non-condensing domestic boilers will shrink further over the next couple of years to the extent that the non-condensing boiler is likely to become a niche product.
The non-domestic boiler market
For the non-domestic sector, changes in legislation do not necessarily require the installation of a condensing boiler. This is particularly true for replacement boilers in existing buildings, for which the minimum boiler seasonal efficiency is set at 80 percent for gas, 81 percent for LPG and 82 percent for oil-fired boilers.
For new buildings, the minimum seasonal efficiency for single boiler systems is set at 84 percent. In a multiple-boiler system, the seasonal efficiency of any individual boiler is permitted to be 80 percent. However, the efficiency of the entire system must reach 84 percent overall.
Nevertheless, there is a strong trend towards the use of condensing boilers in non-domestic and commercial buildings. To achieve Building Regulations compliance for new buildings, designers have to hit a CO2 target. Many designers will choose boilers with an efficiency higher than the statutory minimum, which means that condensing boilers may be the preferred option even where the Regulations do not demand them.
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