Offer basics

How much can Emergent save me on the costs of installing heat pumps, solar PV and EV chargers in my housing developments?

Today our offer can save you 25% or more on the cost of installing these technologies. By 2025, when the Future Homes Standard is introduced, we aim to have turned your spending into an investment that delivers a commercial return, delivering 100% saving.

How have you calculated the 25% saving figure?

The 25% saving figure has been determined by calculating the Net Present Value (NPV) of income payments we project to make for a typical housing estate or block of flats where heat pumps and solar PV are installed. It is based on analysis by Emergent of existing demonstrator sites, and various new build and existing developments that are being considered for the solution by a number of developers.

How realistic is your ambition to get to a 100% saving?

There are a wide number of evolving variables that effect the potential economic performance of our systems, including technology costs, wholesale electricity costs, network connection costs and capital costs. As we build out our portfolio of schemes, we believe we can achieve dramatic economic improvements through scale economies and technical innovations. Lean capital costs will be achievable as the robust return potential of our systems becomes recognised in the capital markets.

How do I get the money?

We make regular payments to you over the long-term, with our typical minimum contract length being 15 years.

Why are you able to pay me a long-term income?

By integrating the heat pump, solar PV and EV charging technologies installed within housing developments as microgrids, we can use the technologies to supply electricity to householders, generating an income. By intelligently operating these microgrids using battery storage, big data analytics and algorithms, we can limit how much we need to spend on running costs. We can also sell excess electricity back to the national grid at times when its needed. This enables us to generate a profit. Your payments are made using that profit.

What if I only build or develop the properties and someone else has the long-term interest?

If you are unable to reap directly the rewards of a new long-term income stream from your developments, you no doubt still want to maximise the value of your developments ready for sale. Emergent’s solution adds to the long-term yield value of developments, as well as improving the environmental credentials. This means you can mark up the value of your developments when selling and make more money.

Is this just for new build, or does it also work for retrofit schemes?

As anyone working in housing knows, new build is far easier than retrofit for delivering higher carbon performance standards. Retrofit schemes have the biggest need for new funding and installation solutions. The first demonstrator schemes for our smart local energy system solution were retrofit projects, and so while, today, we focus mainly on new build projects, we continue to be active in developing targeted retrofit opportunities. Expect to hear more about these opportunities in due course.

Is my development right for an Emergent smart local energy system?

The way to find out is to get in touch. All developments are different and we need to check your development against various criteria to see whether it is commercially viable. For all schemes that are put forward, we guarantee to assess their viability.

Technical basics

How does it work?

We connect the heat pump, solar PV and EV charging technologies you install within a housing development to a locally manged electrical network, which is connected to the national grid. In most cases, we also connect battery storage to the network. We use the technologies to supply electricity and heat to the householders and buy from the grid any power we need above that generated from the solar PV. We operate the battery using big data analytics and algorithms to optimally balance electrical generation and demand loads on site.

How does creating a smart local energy system in this way make money?

By integrating the heat pump, solar PV and EV charging technologies installed within housing developments as microgrids, we can use the technologies to supply electricity to householders, generating an income. By intelligently operating these microgrids using battery storage, big data analytics and algorithms, we can limit how much we need to spend on running costs. We can also sell excess electricity back to the national grid at times when its needed. This enables us to generate a profit. Your payments are made using that profit.

Why has no one looked at creating smart local energy systems for housing before?

Microgrids are not a new concept, albeit they have typically been found in commercial and industrial applications, so applying them to housing is new. This has become possible due to dramatic reductions in the costs of solar PV and batteries occurring alongside plans for a massive expansion in low carbon heating and electric vehicle technologies.

The intelligent integration of electricity, heating, and transport technologies at a local level is expected to become a major feature of energy systems globally due to the efficiency savings this can generate. This is why smart local energy systems are the focus of a major industrial strategy innovation programme being led by the government.

How does the government feel about smart local energy systems?

Recognising the vital contribution smart local energy systems can make to the efficient operation of a net zero energy sector, and the likely proliferation this will mean for smart local energy systems globally, the government has to date committed over £100m of funding to support innovation in this new technology domain through its Prospering from the Energy Revolution programme, part of the overarching Industrial Strategy Challenge Fund. In 2020 Emergent was a significant recipient of support through the programme, having convened, launched and led a multi-million pound project that was backed through the scheme.

How does the energy regulator Ofgem feel about smart local energy systems?

Ofgem is increasingly seeking to support innovation in the energy market that can help deliver net zero, with a particular focus on supporting approaches that take a more local approach than has historically been possible in the market. Emergent recently received from Ofgem an important, first of its kind ‘Sandbox’ award – a derogation from certain regulations to trial an innovative proposition - that is key to scaling up our smart local energy system offer. Read more here.

What is the Ofgem derogation and what does it enable you to do?

In May 2021 Ofgem awarded Emergent an “Energy Regulation Sandbox”. This is the first ever regulatory derogation to parts of industry body Elexon’s Balancing and Settlement Code, and gives us unique permission to trial a new process that will make it easier and cheaper for households on microgrid networks to switch their energy supplier. This derogation is essential for operating microgrids fairly and cost efficiently in residential developments and will enable us to scale up our offer for housing companies. The expectation is for the trial to provide evidence that demonstrates the effectiveness of the new process, leading to it being made available for use across the industry.

Because your proposition is new, does that mean it’s high risk?

Most of what’s involved in our smart local energy system solution isn’t new. It uses tried and tested technologies like solar PV and heat pumps. The ‘new’ aspects are mainly to do with how we install and operate the technologies. The riskier parts of the solution relate to how we use battery storage or interact with the grid to maximise the commercial value – but doing this is the core focus of our business and you’re protected from the risks this entails. That all said, while we work hard to make it as easy, simple and low risk as possible for our clients to work with us, we do like to work with clients who recognise the direction of the travel in the industry, and the need for leaders to push the market to decarbonise faster.

How it works for residents

What do the residents receive?

The residents get a fair and affordable supply of locally generated renewable electricity that is truly green. In contrast to the so-called ‘green tariffs’ offered by many of today’s energy suppliers, this is anything but greenwash.

How do I know the residents will get a fair deal and a high quality service?

We make our money by supplying electricity to the residents. If they don’t like our service, they can always switch away. For our business to succeed, we are highly incentivised to keep the residents on supply with us, which means we’ll always work really hard on pricing and service.

Can the residents still switch supplier?

Yes. For our business to work, and for net zero to be achieved, it is essential customers’ needs are prioritised and everyone is treated fairly. Just because someone is on a local energy system, it shouldn’t mean their consumer rights are compromised. We have worked very hard with industry regulator Ofgem to make it easier for customers on our systems to switch supplier, and recently received a unique 'Sandbox' award to help deliver this (see above). The ability of our customers to switch stands in contrast to other local energy approaches involving the supply of heat, which operate by locking customers in.

What would happen to the scheme if all the residents switched away?

We’re confident that our service standards and product quality mean this won’t be happen. For all energy suppliers, managing the risks of customers switching away is part of everyday business. It’s no different for us.

Will working with you make our development more attractive to residents?

We believe so. Public support for action on climate change has never been higher, and we can only expect it will increase as the urgency for action increases. In this context, who wouldn’t want a fair, simple energy supply, from local renewables, that is truly green, that you don‘t need to pay for upfront, and that if you’re not happy with, you can switch away from?

Working with Emergent

Are we a good partner for Emergent?

An optimal solution for delivering the Future Home Standard in 2025 will not appear on its own. It needs testing and piloting in the few years we have before its goes live. If your approach to removing gas boilers, or delivering net zero solutions more broadly, is “wait and do what you need to at the last minute”, you’re not the right partner for us today. If, however, you’re looking to get ahead of the curve and act now, we should talk.

What expertise do we need?

On the technical and commercial aspects of delivering an energy system, we are the experts, and we’ve got evidence of support from the government, the regulator, industry partners and clients to back that up. You’re the experts in how to navigate your organisations’ decision-making processes and get deals over the line. This is a crucial skill today when we all need to be working quickly in new ways to achieve the challenges of delivering net zero. If we each bring our expertise to the table, we can make things happen.

How much effort do we need to put in?

The main thing you need to do is fully understand what our offer can do for you, and how to get it over the line in your organisation. When it comes to delivering the actual technical solution, we make it as simple and hassle free as possible for you. We do the heavy lifting so you don’t have to.

Next steps

I’m interested. What do I do now?

Get in touch! Email or call us and we will schedule you in for an initial 30-minute virtual meeting. You’ll leave fully equipped with what you need to know about how our offer works. And we’ll give you a form to complete for any potentially viable projects. Once that’s completed, we can move to the next stage of discussion. (This is exciting stuff. We can, and often do, get drawn into big conversations about where the energy market is going and what we can do to accelerate the transition to net zero. As much as we love these discussions, we’re all too aware that we’re all short on time and what we need is action on the ground. That’s why we keep the meetings short and focused.)

I think I understand well what you are offering and have a good project opportunity to discuss with you. How do I move this along quickly?

Get in touch! Email or call us and we will schedule you in for an initial 30-minute virtual meeting. You’ll leave fully equipped with what you need to know about how our offer works, and we’ll give you a form for filling in some details on any potentially viable projects. Once we receive the completed form, we can move to the next stage of discussion. (This is exciting stuff. We can, and often do, get drawn into big conversations about where the energy market is going and what we can do to accelerate the transition to net zero. As much as we love these discussions, we’re all too aware that we’re all short on time and what we need is action on the ground. That’s why we keep the meetings short and focused.)