The mid-1980s saw two big shifts in home heating. One was the introduction of gas combi boilers to the UK market and the other was the privatisation of British Gas. In the years that followed, a heating workforce once directly employed by a nationalised company became one of sole traders and microbusinesses, the majority of whom specialised in fitting these new appliances.

The effects of these two shifts endure today: 95% of the UK’s heating businesses are sole traders or working in firms with fewer than 10 employees. This has served the industry well up to now, but this legacy is a barrier in the transition to heat pumps. This article unpicks the problems and highlights what innovators can do to help.

Gas combi boilers provide central heating and hot water from one appliance.

They were crucial enablers in the emergence of the sole trader workforce. They’re light and easy to install alone. They’re forgiving in their heating, typically requiring neither radiator swaps nor heating system design. They’re cheap, making credit with the wholesaler easier to manage for a small business. The quick install time makes customer payment cycles speedy too. At the point they fail, they can be replaced quickly. The technology aligns perfectly with the workforce, and householders loved them as they freed space previously used by the hot water tank.

To reduce carbon emissions and reliance on unstable fossil fuel supplies, we need to move to heat pumps. But heat pump retrofits are more complicated for a workforce of this shape. The appliance is heavy and hard to manoeuvre solo. Installation requires skills that combi installers might not have or be out of practice with. These include heat loss calculations and system designs; paperwork for government grants, sales and aftercare; and electric and ground works. A longer install time and costlier kit needs access to more credit, a longer sales pipeline, and careful planning of work weeks or months in advance.

The sole trader and microbusiness model that worked well for combi installs is much less suited to heat pumps.

Perhaps heat pump installation should be left to large firms with deep pockets, management processes, and skill specialisation? I disagree. They have a role to play, but excluding the other 95% of the existing heating firms from the heating transition, losing their skills and the trust they have with householders, would make that transition unviable.

Instead, let’s frame this as an innovation challenge.

What’s needed are products and services that take on elements of heat pump installation which sole traders and microbusinesses can’t or don’t want to do themselves. The aim is to make working life for those businesses look a bit more like working for a larger firm.

Lots of this is happening already. But there’s space for innovation to make that pathway even smoother, encouraging more sole traders into the sector and helping those already working in heat pumps to install more.

MCS umbrella schemes

Umbrella schemes enable installers to do MCS-certified installs and access government funding. They come in all shapes and sizes to suit different needs. Some schemes will simply sign off an installation, while others manage the customer journey, system design, or offer finance and other advanced features. In all cases, though, an umbrella scheme means installers can retain their sole trader status while gaining the support of others’ expertise in the areas they most need it.

Back office software products

Software streamlines admin heavy and complex tasks, such as system design, DNO registration, commissioning and customer handover. Other software products exist to do similar things, or to help with general business management tasks including invoicing or managing customer relationships. Such software products enable small businesses to emulate the skills or management processes which larger businesses have access to.

Heat pump management

Hardware and software optimise heat pump performance by better managing heat delivery throughout the home or responding to price signals from flexible tariffs. For smaller heating firms, such tools increase customer satisfaction and reduce callbacks.

Brokers and comparison sites

Companies that offer consumer facing advice, help households plan their retrofit journey and then choose an installer can smooth the customer journey and encourage adoption while reducing the need for investment in these processes by the installation firm themselves.

While these solutions are reducing some barriers, further innovation could accelerate the pace of heating decarbonisation and the quality of each installation. For innovators across the industry, the challenge is to create products, tools and services which ease the frictions sole traders and very small microbusinesses face because of the size of their business.

Knowledge exchange between peers

A big advantage of working in larger companies is the sharing of information that takes place amongst colleagues. There is an active culture of peer mentoring in some parts of the heat pump sector, through blogs, podcasts, meet-ups, and good old fashioned chin wags between friends, but many don’t participate.

Heat pump trades matching service

Heat pump installation often requires technical skills such as ground works or electrical. Using a specialist can save time and money but access to these skills can be challenging. A service that matches installers with quality tradespeople could help sole traders deliver heat pumps more cheaply and speedily.

Improving the customer journey

The customer journey for heat pump installation can be complicated and, because heat pumps feel new to many householders, that journey also feels risky. Recognised brand names, high quality online and offline shop fronts, and reliable consumer protection and aftercare reduce that perception of risk. Such things are very hard for individual sole traders and microbusinesses to create, but could be run by larger organisations on their behalf.

Interoperability or rationalisation

As seen in the existing solutions described above, presently there are a range of businesses which provide solutions to specific problems. This covers all bases but it’s hard work for an installer to identify the right solutions to use and then to manage them all. Interoperability between platforms would help now. In the long term, rationalisation will reduce the number of operators in the market and bring more services into fewer platforms.

Adding more technologies

Electrification isn’t just about heating. For many households, solar PV, batteries, and electric vehicles are part of a household’s electrification journey. Microbusinesses or consortiums of sole traders who can offer the whole package either in one go or incrementally will do well, and there is a benefit to creating services that enable that.

The existing workforce is highly skilled in plumbing and heating but the independent sole trader or microbusiness model that worked so well for combi boiler heating needs to evolve as we move to heat pumps. Persuading consumers to ask for heat pumps is only half the battle, installers need to be willing and able to fit them. For this to happen, we need innovation in products and services that reduce frictions and streamline the process for installers.