“Will electrification follow the standard technology adoption curve?”

With many industries, in particular the tech industry, we refer to the early adopter cohort and the early majority cohort as milestones en-route to mass adoption. Clifford Stoll was famously wrong about the mass adoption of the internet, which at first was a fringe activity but has now taken over so many aspects of our lives. But will electrification follow the standard technology adoption curve, or will it struggle to break into the main-stream?

“Most people just aren’t that interested.”

What do we know about the lives of most people? Most people are very busy with their own lives. They are concerned about the day to day, keeping the show on the road. Work, school, child-care, care of the elderly, sport, hobbies. When it comes to things like having a warm home, most people don’t have the time to give it much thought. Sure, they want to heat the home adequately and they don’t want to spend more money than necessary on it, but that is it. Regarding how the home is heated, this doesn’t get most folk fired up.

A heat pump isn’t an interesting new gadget like a noise-cancelling headphone is. And perhaps more importantly the outcome you feel (warm home) hasn’t changed with the new tech, compared to the fancy new headphones which are immeasurably better than the free ones you pinched from an airline five years ago.

Swanson’s Law

We previously wrote a post about Swanson’s Law, which states that “the price of solar photovoltaic modules tends to drop 20 percent for every doubling of cumulative shipped volume.”

Now you’d think that this would result in a huge reduction in installation costs for domestic solar in the UK, and to be sure, prices have fallen. But the equipment makes up only part of the cost of an installation. Scaffolding and labour costs make up the largest component, followed by all the UK-specific compliance costs, such as insurance, accreditation and training. The fact that the individual Solar PV modules have reduced in cost is more than made up for by the 10% rise in labour costs over the past 12 months.

And so this speaks to the fundamental issue with electrification.

Where a gadget is factory made, it can benefit from efficiency gains and costs can fall over time. But anything which involves real people coming to a household and providing a high quality service cannot benefit from these kind of efficiency gains.

So cost will always be a factor. And as Nathan Gambling regularly says on the excellent Beta Talk podcast, there is a world of difference between a heat pump heating system that is well installed compared to one that is poorly installed.

Heat pumps will always be expensive

No matter how low the cost of a heat pump at the factory gate, the bulk of a heat pump’s expense will lie with the installation, and a poor installation will consume a lot of electricity and be less efficient.

What about home storage batteries?

The economics for investing in a home storage battery are clear; it will save you money and this is especially the case now that VAT has been removed from retro-fit / stand -alone battery systems. So it makes a good investment.

But this still doesn’t really fit the bill for a mass adoption technology. For instance there is highly unlikely to be a second hand market in home storage batteries. Plus it is probably best viewed as an investment rather than a gadget to play with. So it is better to view the battery in the same way that you view an ISA, versus those noise-cancelling headphones.

Government subsidies

Government policy is helping to boost the market in various ways. The government has removed VAT from a range of energy efficiency and energy generating measures. It has just extended the subsidy for heat pumps, increasing both the grant available to households to £7500 and increasing the size of the funding pot threefold.

But can we really subsidise our way to mass adoption?

Prediction: Will electrification follow the standard technology adoption curve?

We think that for those with the financial wherewithal to make an investment into solar PV and home storage batteries, they will reap the financial rewards for years into the future.

We think that as more people become educated about this technology, and people come to understand it as a good investment, they will become quite widespread.

Due to the capital sums involved, it will not become a universal feature, but we certainly expect their roll out into new homes much more widely. There seems no reason not to expect solar & batteries in every new home in the future.

As for electric heat, we think that transition is inevitable. However there needs to be a much greater focus on “fabric first.” Plus there are multiple ways to generate electric heat in a domestic setting. Heat pumps are one, Tepeo Zero Emission Boilers are another. Radiation is an excellent and under used option, and even the traditional storage heater has been given a smart upgrade. Each system has its own benefits and use cases, and there is certainly no one-size fits all solution.

At Brimstone Energy UK we firmly believe that homeowners require someone in their corner. We offer a whole-of-market holistic approach. This is why fundamental to our service offerings are:

Consider this. Why would you choose to invest thousands of pounds without first working out exactly how you should allocate your resources? We are an advice based company, and pride ourselves on putting the needs of the customer first.