[00:05] Shaan Jindal: Hi everyone, and welcome to today's event, Blowing hot and cold: how air-to-air heat pumps can be a year-round solution. Thanks very much for joining us today. I'm Shaan, and I'm a Mission Manager on the Sustainable Future team here at Nesta. For those that don't know, at Nesta we design, test and scale solutions to society's biggest problems. Our three missions are to help people live healthy lives, give every child a fair start, and create a sustainable future where the economy works for both people and the planet.

So in today's event, we'll of course be touching on our sustainable future work, where we'll be exploring the role of air-to-air heat pumps as a low-carbon heating solution for UK homes. With me today, I'll have joining me John Ewbank, who is an independent researcher and data scientist specialising in heat pump performance and energy system modelling. I'll have Leah Robson, who's the Managing Director of Your Energy Your Way, a renewables installation company, and Hamid Salimi, who is the National Residential Product Manager at Daikin UK.

In terms of the structure of the event today, we'll begin with John and myself spending about 10 minutes sharing the biggest opportunities and challenges with installing air-to-air heat pumps, as identified in our report that came out at the start of this year. We'll then spend about 25 minutes on the main panel discussion to really get into some of the detail of that and to ask some of the key questions around air-to-air heat pumps. And then we'll have about 15 minutes at the end to answer all of your questions as the audience.

So if you do have any questions that come up during the conversation, please do join the conversation in the comments box, as I can see many of you are already doing, and put any questions that come up in there, and we will answer as many of them as we can in the Q&A session in the last 15 minutes of the event. So please add them throughout the webinar as they come to mind.

So to begin, I'll hand over to John to give a brief rundown of some of the opportunities for air-to-air heat pumps, and I'll cover some of the challenges we found as well. Over to you, John.

[02:23] John Ewbank: Thank you. As a bit of context for this report, it included interviews with 16 homeowners who tended towards the sort of—well, one installer described them as "generally nerdy men" who were installing these units. So people who are looking for a heating system that isn't really—well, gas has failed them in a way, but they want to go electric. There were eight installers who were interviewed, and these ranged from people who specialised in installing air-to-air heat pumps for heating, but the majority were installing them mostly for cooling. And that is still where most of the demand is—it is for cooling rather than heating.

Eight non-installer experts: these were people who might be working in policy or running a company; a few were on MCS working groups; and one was working in the Pacific Northwest National Laboratory in the United States, so they've got a much more established cooling demand market over there. They know a lot of the issues that come with air-to-air heat pumps or cooling specifically.

There was bit more desk research that was reading forums, manufacturer data sheets, scientific papers, and then it all just came together into this report. What we found from it was that air-to-air could effectively work in pretty much all different UK homes. There are of course limitations, as with air-to-water: currently you're going to have to put in an outdoor unit. There are new units coming that are going to be fully internal which will work as ducted systems—they will send warm air around the house through ducts; Climate Environment is an example of that. There are other things that manufacturers are bringing forward to deal with the flat side of things. But yeah, they can pretty much work everywhere. Whether or not you want to put them everywhere is down to individual questions and individual circumstances.

A lot of people think of air-to-air heat pumps or AC as just one type of thing, which is you have an outdoor unit and an indoor unit which is a wall-mounted head. Of course there are lots of different other options. You can send it to one head which then sits in your loft, which then sends it to ducts around your upstairs rooms, so it blows hot air into those hot rooms from a single unit. You might have some systems now, like the Daikin Multi Plus, that do hot water, and more are going to come like that. There's the Samsung Quint which also does hot water; the Daikin Altherma 3 M which is coming later this year. So you've got to look at the technology as it is now, but also how it's going to evolve. Things are changing in this space quite rapidly with demand and the move to electrification of heating.

One area where they work very well was in smaller, open-plan properties where you don't have to do a significant amount of—you don't have to add many internal heads. Essentially you've got this large open-plan space: you can put a powerful wall-mounted unit downstairs in that space and it can heat the whole thing, because these units can put output up to over 7 kilowatts, some of them, so they can be very powerful. If you've got an open-plan space, you've got a stairway that opens to upstairs, the heat can transfer up that staircase and you can really get away with having relatively few units relative to the size of the house. But obviously you've got to think about comfort and things like that when doing things like that.

One advantage of that is that this is sort of outside the MCS specification, so MCS want you to put an internal head in every room—they're not going to cover ducted at the moment, they are quite stringent on their requirements. But what many people will do in the private sector is they'll say, "Right, I want to heat this large room, I'm going to put one head here, and that's that. I'm going to live in that room most of the time." So if you're trying to decarbonise or reduce bills or reduce oil usage or electric resistance heaters, that's a very effective way of doing it.

One thing we found with them is that currently, because of the way weather compensation tends to work with air-to-water heat pumps, these are—how would I say?—they're more forgiving. Essentially air-to-air is what's called load-compensated, which means that it will adjust the temperature of the refrigerant based on the load required in the room. It's a bit more complicated than that, but that's the core of it. Whereas with air-to-water, most of the systems will adjust the temperature of the water solely based on the outdoor temperature. There are systems coming now that do it a bit—they're a bit more adaptive, but they're not everywhere. What we found is that a lot of installers, especially in the social space, aren't setting up weather compensation correctly, and so people are ending up with poor-performing systems.

The hope is that air-to-air might enable a reduction in that, because the air-to-air will self-modulate—it doesn't need the weather compensation—and it means people can run them in different operating patterns, more intermittently, and there's less potential for high bills and things going wrong, and underheating and things like that, which you might see in certain air-to-water systems. That isn't to say that it's necessarily better in every circumstance or for every user—again, it depends what people want from their system. But yes, it works well for that.

One of the things that we've been looking at recently and thinking about is that obviously there's been a massive heatwave, people want cooling, so one thing that people are now looking for is air-to-air heat pumps. This is a draw now for people: getting cooling for their homes is becoming a driver for the decarbonisation of heating, if you will. I think that covers most of the opportunities that we see in air-to-air for people moving forward.

[09:19] Shaan Jindal: Great, thanks John. I'll just cover off some of the challenges. You've heard most of the positive areas there, but there are some challenges we've identified for installing air-to-air heat pumps as a low-carbon heating solution.

The first issue is around planning permissions. As many of you will know, permitted development only allows for one outdoor heat pump unit, apart from in detached homes. But with air-to-air systems, there's a chance that for a whole-home heating system, they might need two outdoor units compared to air-to-water systems, particularly for terraced homes or mid-terraces, and particularly to provide the least disruptive installation possible—potentially even less disruptive than many air-to-water heat pump installations. To make the most of making them more appealing or less disruptive, you might require having two outdoor units. So this current restriction could prevent homeowners from being able to get what might be the cheapest, least disruptive and most appealing low-carbon heating system for them, which, if there is going to be an increased interest and demand for air-to-air based on people being interested in cooling, could then stunt the uptake of a heat pump solution or low-carbon heating solution.

This is what we've learned through the research that John's done, but we're currently working with an air-to-air and air-to-water heat pump installer to get a bit more evidence on this and try to quantify actually how much of an impact these planning restrictions have on cost, disruption and install time, and if it's property-dependent, to dig into how true or widespread this is.

The second challenge that we came across is that although air-to-air, as John mentioned, has the potential to be useful for smaller properties, and especially for flats, it's still bound by the same constraints as air-to-water units. So you're still going to need to have a suitable outdoor space for the outdoor unit, just like with air-to-water systems. You can't just hang it off the wall out the window three storeys up, which some people might expect we might be able to do. So that's still a big challenge there.

And then for those in flats in particular, they still require freeholder consent to get an air-to-air system, whether that be for an outdoor unit because you need to make changes to the building itself on an external wall, or even for some of the fully internal units, which we have talked a little bit less about. You can get these internal units where you drill two holes through an external wall and put it in like that, but that still of course will require freeholder consent, even if it's a compelling solution for some small flats. So there's still a big challenge around that.

The next challenge is around domestic hot water. Although there are air-to-air systems available that can provide domestic hot water as part of their system, many on the market and many that people have available to them don't currently do that. This can add an additional cost or decision point or general friction to the homeowner if they're looking to fully decarbonise their home with this system. With an air-to-water system, you just get an air-to-water heat pump, it comes with the hot water, so it's sorted, whereas this is something extra that people have to think about.

So on top of factoring in that added decision point and cost, the grant available for air-to-air heat pumps—which isn't technically available yet, but it's coming soon, I hope—may not quite make them as competitive with air-to-water systems in homes beyond a certain size due to the big difference in grant amounts there. The grants have been designed with certain properties in mind for air-to-air, so that would explain that. But thinking holistically for all homes in the UK, air-to-air may not be quite as competitive with air-to-water in some contexts.

The issue with air-to-air not necessarily providing hot water with many of the models that are out there can also lead to a potential challenge for decarbonisation policy. Homeowners may choose to get an air-to-air system and then retain their gas boiler for hot water. We also know that there are some people who choose to retain their boiler and radiators almost as a contingency until they've tested out their new system and feel like it works over a winter for space heating.

On the hot water front, although we would like to see people completely decarbonise their homes, I'm not sure if people keeping their gas boilers for hot water is as big a problem as people might immediately think. Because if air-to-air is used for all of the space heating in a property instead of a gas boiler, that will be a reduction of about 75 to 80% of emissions from gas that would have previously been used for space heating, which is a significant amount. So if air-to-air can help people decarbonise their homes by 80% sooner than they would otherwise decarbonise their homes by 100%, that's probably overall a good trajectory and a good thing. And due to that modular nature of the hot water system in many air-to-air systems, it might be relatively simple to swap that out at a later date. Obviously, this caveat is only the case for non-MCS certified installations, so those who want to get the Boiler Upgrade Scheme grant or go down the MCS route will of course require full decarbonisation, and the boiler will have to be removed. So this is an interesting space right now where there's the MCS route coming out, but also the way that the market's been operating without MCS so far.

Just the final challenge before we move into the panel conversation: if air-to-air heat pumps are to be a mainstream low-carbon heating solution to a similar extent as air-to-water, there's a similar question around how we quickly build the workforce to install these units as a low-carbon heating solution, especially given the air-to-air workforce is at capacity already, both in the commercial sector and domestic. So there's a question around that. Although, as John mentioned, air-to-air installations can perhaps be a little more forgiving to install than air-to-water installations and might provide a more compelling case for some heating engineers to upskill in air-to-air rather than air-to-water because they see it as more of a business opportunity for summer cooling, there are actually similar challenges to getting them the competence and required skills to actually be installing in people's homes and designing systems appropriately. So there's a similar challenge there as with air-to-water in terms of growing the workforce.

So that's just a very quick rundown of some of the key things in our report. If you'd like any more detail on the topics we've covered, we'll probably touch on a bit more throughout this webinar, but also it's all in our report, which we'll share a link to in the chat and also circulate after the event. Please do have a read if you're interested in finding out more, and please do get in touch in the future.

Now on to the main conversation with the rest of the panellists, Hamid and Leah. Great.

I'd like to start with you, Leah. We've heard a bit about the opportunities and challenges with air-to-air heat pumps. I'm curious to hear a little bit about what demand is currently like for you as someone offering this technology through their company, and do you have a sense of what's driving people to install air-to-air heat pumps when they come to you?

[17:39] Leah Robson: We primarily install air-to-water heat pumps, and air-to-air heat pumps are quite a new thing for us as a company. But this summer—it happened a little bit last summer, but this summer for very obvious reasons—demand has gone absolutely off the charts. Pretty much everyone we speak to about an air-to-water heat pump wants to know about cooling. So it's resulted in a whole extra layer of complexity around selling a heat pump. That's a negative way to look at it. In a positive way, it's created an enormous upsurge in interest in heat pumps. I think for good companies that really know their stuff and research thoroughly, there's a real opportunity, because we need to tailor the right solution to the right house. For some houses it will be air-to-air, for others it will be air-to-water and working out how to do cooling from that box. So demand has been off the scale, and it's a good challenge.

[18:59] Shaan Jindal: That's really interesting to hear, and completely unsurprising I'm sure to everyone listening in, about the interest in cooling there. It sounds like cooling—do you feel like cooling has created more of an interest and draw to heat pumps for you, or has it been people who are interested in doing air-to-water, but then looking to cooling once they're already interested in the heat pump space?

[19:21] Leah Robson: I think it's brought more people into the heat pump sphere, because you can't cool with a gas boiler, so that's a win for decarbonisation in a way. So I would say it's brought more people to think about heat pumps. Unfortunately, what we'd love to be able to tell them is, "Oh yes, it's super easy, you can just cool with any kind of heat pump," and there's obviously complexity, as you've started to outline.

[19:49] Shaan Jindal: Definitely. Everyone is aware that air-to-air units provide cooling, and also hopefully a lot of people become aware that they provide heating, too. With air-to-water, there is an opportunity, though it is a lot more difficult, to provide cooling. Do you offer that to people, and in what context do you think air-to-water can provide sufficient cooling?

[20:13] Leah Robson: We work in the south-east of England, so space is always at a premium, and all of those things around permitted development and noise calculations are really tricky. As you mentioned before, if you're not in a detached house, you do really want to be doing everything from one outdoor box if at all you can to avoid planning permission. In those contexts where people have the opportunity to do some cooling from an air-to-water heat pump, we are offering that. That can be around how easy it is to insulate the pipe run where the heat pump's going to be, how many rooms they actually want to cool. As mentioned before, if you can do a living room and a couple of bedrooms, then actually you've gone a long way to helping people cope really well with these heatwaves. That's entirely feasible from an air-to-water heat pump. So it really is a house-by-house assessment as to where you're going to put the unit, whether you can accommodate a couple of units.

It's worth noting that a lot of the air-to-air units do tend to be a bit noisier, because we've actually had so much pressure on air-to-water heat pump installers for so long to make the units quiet—there just hasn't been that kind of pressure on air-to-air. So it can be even more of a challenge, because even if you're just doing a single unit in a semi-detached house or a detached house, you do still need to meet the permitted development noise consideration rules. So it's not like you can just put a single unit in anywhere in any house—you've still got to get around those. So there can still be challenges.

[21:57] Shaan Jindal: That was really interesting. As we're talking a little bit about cooling demand, and cooling being a motivator as well for people, John, I'd like to ask you a question around that. Because I know that there are some people who might be concerned about the impacts of using air-to-air units for cooling on the electricity grid, on our climate goals, and perhaps on households' energy use if they don't know how much cooling might cost them—is it adding a new bill for people in the summer where they previously didn't have one? I know you've been doing some work looking into this a little bit. Can you tell us a little bit about what the likely impacts of cooling are on these factors?

[22:45] John Ewbank: I was surprised about how little I think it's going to be from domestic demand. We know that—well, a lot of people probably don't know that there's huge cooling demand from refrigeration, which is basically supermarket cooling. You've got also lots of cooling with offices and just generally warehouses and stuff like that. But if you look at domestic homes, one unit I've been monitoring, and this woman is profligate with her cooling—she leaves it on all the time, sets it down to sort of 18 degrees C—and she spent £170 this summer for a 3.5 kilowatt unit, which has never really been maxed out, but it's seen temperatures of around 35 degrees outside, a bit more at times because it's in Surrey.

For the grid as a whole, I think once you get to about 10% air conditioning penetration—and I think we're a long way from that in split systems. I know that there have been some figures floated around saying that 5% of UK homes have air conditioning, but I'm not convinced by those figures, and I think it probably relates quite heavily to portable units, which will produce a very different load profile compared to split air conditioners, which are air-to-air heat pumps.

One interesting thing that I found in an American study by the Department of Energy on portable units was that once you hit certain outdoor temperatures, you stop cooling altogether and you essentially net heat your home, because the infiltration load—which is when the unit is pulling air into the room, warm air from outside—exceeds its ability to cool. For lots of these units they tested, that happens around 35 degrees C. As you're approaching that temperature, the coefficient of performance of these units is dropping and dropping and dropping, and then it goes negative.

So I would say if people want to be concerned about air conditioning and its effect on the grid and the climate, split air conditioning is not the thing that's going to make a difference. The thing that's going to make a difference is portable units, specifically the vented units, because people are buying these £300 units: they've got small heat exchangers but big compressors, and they're just very inefficient.

A good proportion of the load can correlate with solar production, which obviously is good if you're thinking about decarbonisation, but there will almost certainly be a peak in the evening after solar generation has finished, and that's going to be fairly substantial. It'll be interesting to see whether or not that can correlate to battery storage and things like this. Most of the homeowners I spoke to who had air-to-air systems installed did them as a holistic system, so they were installing batteries, solar and air conditioning, mostly because they wanted a way to use up their solar, and it's a comfort thing.

I would say that you're going to see a lot more of that, especially now with balcony solar—that's going to come, supposedly it's the 27th that that's legal in the UK. So that's going to absorb a lot of the demand. If people are pairing balcony solar with a small battery, that will probably cover the load of a flat in the evening. A 2.4 kilowatt battery charged by solar during the day is probably sufficient to cover a flat's cooling load on a very hot day in the evening. So it's something to be aware of, but this split market isn't going to be the problem in high loads.

[26:50] Shaan Jindal: Thanks John, that's really interesting, and really useful as well to identify that key difference between the split systems that we're talking about here and those portable cooling units which are much less efficient and, like you say, might even cause space heating by accident in certain outdoor temperature conditions.

In the interest of time, I might move on to asking you a question, Hamid, because we're speaking a little bit about energy use here and potential climate impacts of this technology. One of the things that people talk about sometimes in terms of the climate impact of heat pumps, and specifically air-to-air, is the global warming potential of the F-gases they use. As many people might know, there's a phase-down of high global warming potential F-gases. So I was curious about what that phase-out means for the applicability of air-to-air heat pumps as a solution, either now or in a few years' time, and what that pathway is looking like and how manufacturers need to adapt the technology to meet those pathways?

[28:01] Hamid Salimi: Will there be any impact of F-gas—or to be particular, HFC or hydrofluorocarbon—phase-down on the sale or implementation of air-to-air? The short answer is that at the moment it's business as usual, and there will not be any impact of HFC phase-down on the sale of air-to-air heat pumps in Great Britain. Well, that's the short answer.

I just wanted to give you some background, because there seems to be some ambiguity on how people have understood this HFC phase-down. Firstly, HFCs, or hydrofluorocarbons, are a type of refrigerant. They are man-made refrigerants, and they have what we call a GWP, or global warming potential. Some of the examples are R32 and R410A, which are used in almost all air-to-air heat pumps that we install today. A high percentage of both air-to-air and air-to-water heat pumps have these refrigerants.

Now, to provide some background, it's important to know that in 2016, the Kigali Amendment set out some phase-down schedules and associated baseline years for the production and consumption of these HFCs for the countries that ratified the amendment. UK ratified the amendment, and the whole European Union did as well, so many regions ratified the Kigali Amendment, but they use their own measures or they may even use their own regulations to achieve the same target. So you will see different regulations and different measures by various regions, but it all stems from the Kigali Amendment, and they'll be reaching the same target of reducing the use of these high-GWP refrigerants.

I'll give you two scenarios just to explain what's happening in these regions. Firstly, what's happening in the EU: we are not part of the EU anymore. EU has adopted aggressive measures and regulations, and is implementing some strict equipment bans, with a complete phase-out of these refrigerants by 2050. What that means: some air-to-water heat pumps containing these refrigerants with a GWP of above 150 will be banned from 2027. When I say some air-to-water heat pumps, that's anything up to 12 kilowatts. And then again, some air-to-air heat pumps containing HFC refrigerant will also be banned, but that's from 2029. So we have two deadlines: one is 2027, that's for air-to-water heat pumps meeting a certain criteria, and then we have 2029 for air-to-air heat pumps. There will be some exceptions in both cases, but I'm not going to go into them.

And then what's happening in Great Britain: looking specifically at Great Britain and not the whole United Kingdom, because Northern Ireland is excluded. Post-Brexit, Great Britain will follow the quota reduction measures to gradually phase down the use of HFCs, but there won't be any bans. Under the Windsor Framework as part of its dual-market access arrangements, Northern Ireland will follow the EU rules in this case. But for Great Britain, I just wanted to emphasise that unlike the EU, there won't be any equipment bans. The current target is to reduce the use of these high-GWP refrigerants down to 21% by 2030 compared with the annual average of 2009 and 2012, which was the base average usage which we use as a benchmark.

So for now, there is no change to this target. We will see next year what happens, because Defra is looking into it. There was a consultation; Defra received I think over 140 consultation responses, but they'll still need some time to decide what's going to happen with the use of refrigerants.

The last point I wanted to make is that for now, bear in mind it's business as usual, no impact on the use of air-to-air heat pumps using these refrigerants. But it's worth noting that many air-to-air heat pump manufacturers are proactively developing their air-to-air ranges using refrigerants with low GWP or even natural refrigerants to stay ahead of the market. So we are seeing some manufacturers who've already introduced some air-to-air heat pumps with natural refrigerants, and that trend is going to continue, just to make sure that we are ahead of the game.

[33:50] Shaan Jindal: Cool, thanks Hamid, that was a really comprehensive overview of that, and super useful to hear, and pretty reassuring in terms of the availability of the equipment and the ability to install it as a solution going forwards.

I just wanted to zoom back out a little bit and maybe touch on some of the things we talked about about the applicability of this technology in the report. How do you see air-to-air heat pumps fitting into the mix of low-carbon heating solutions available? Are there certain contexts you think they're particularly well suited, or are there situations where you think they might even be preferential over air-to-water units? Leah, it would also be really helpful to hear your opinion on that as well as someone who's actually installing these. So maybe Hamid, and then Leah afterwards.

[34:46] Hamid Salimi: Air-to-air has lots of advantages. Air-to-air heat pumps can be used for heating and cooling across a wide range of homes. The Nesta report which John mentioned earlier mentions several different types of properties, ranging from an Edwardian house built in the early 1900s, to a very big 1970s-built 220 square metre detached property, and then to a fabric-first Passivhaus apartment or flat. So these are some of the examples where John interviewed people, and you've seen that people are happy with the use of air-to-air heat pumps.

I think that small homes and flats are particularly suitable—for example, a two- or three-bedroom house or a flat with an open-plan kitchen. For this sort of property, a multi-split or a multi-head air-to-air heat pump would be a good solution. Multi-split is a type of heat pump where you can put multiple indoor units or heads within rooms in the house, and then they'll all connect to one outdoor unit outside, rather than having multiple outdoor units in the garden.

There are multi-split heat pumps, such as the Daikin Multi Plus, where a single heat pump can connect up to four indoor units to provide both heating and cooling, and a hot water tank. So the system can provide heating and cooling as well as connect to a hot water tank. In this case, all functions are supplied from one air-to-air system, and this changes the overall dynamic, because one air-to-air heat pump can now provide heating, cooling and hot water.

Some other suitable properties are new-build properties. New-built properties are usually highly insulated—they are so insulated that a few years ago we had to bring in Part O regulations, which is basically about overcoming overheating in highly insulated buildings or houses. Although Part O uses a systematic stepped approach where you move from natural ventilation to mechanical ventilation heat recovery and then to mechanical cooling, in some cases air-to-air will be the right fit for a new-build property.

Homes with different rooms or zones that need to be maintained at different temperatures: air-to-air, especially multi-split systems, will give you a very good handle on how to change the temperature or set the temperature of each room. Homes where some zones are completely switched off when they are not required is again a good example or a good suitability for an air-to-air heat pump.

And then properties that require intermittent heating, such as properties which are occupied by a working couple who are away between 8:00 in the morning and 6:00 p.m. The good thing about air-to-air heat pumps is they provide instant heating, a rapid response when they provide heating or cooling. So unlike an air-to-water heat pump, you can switch them on, and a correctly sized air-to-air heat pump can heat your space or your room within 10 to 15 minutes, which then means that you can switch the system off whilst you're away, and then when you come back you can switch it on or you can schedule it.

And then we've got holiday homes, home offices, and those properties where there is no space available for hydronic components—that's where I think air-to-air heat pumps will be suitable.

[39:07] Shaan Jindal: Great, thanks Hamid. And Leah, does that match with your thoughts, or do you—I know you said almost a case-by-case basis for you, but are there any trends that you've noticed?

[39:23] Leah Robson: I think the whole question is absolutely fascinating, because we're talking about a wholesale change in the way that people heat their homes, and we're trying to do that already with air-to-water heat pumps. I've been doing that for 12 years, and my experience is that that's a tricky transition to get people to think in a very different way about how their homes are heated. Now it'd be really interesting to see whether the promise of cooling is enough to make people go, "Well actually, I don't really mind having an ugly old box outside my house, I don't really mind if it's a little bit noisy, and I don't really mind if there's a fan going inside my rooms, and I don't really mind having a whole load of new pipework, and I don't really mind redecorating because I've taken my radiators out." So that for me is the interesting thing: is that going to be enough to make people forget all those downsides that I've just listed about the transition and go, "Yeah, okay, let's go"?

And some people don't like blown air—that's another thing. One of the things about an air-to-water heat pump is that people find it a very comfortable way to heat their home. So watch this space for the next few years, because it's going to be an interesting one as that whole behavioural change and psychology piece of people adopting a new way to heat their house is going to be a big thing, definitely.

[40:57] Shaan Jindal: Definitely. I'm aware we should very soon move into some of the questions that have been flowing in throughout our conversation. But briefly, Leah, do you face any differences in challenges between air-to-air installations and air-to-water installations? Are there any specific challenges to air-to-air that are different to air-to-water as an installer?

[41:20] Leah Robson: Once you go beyond the small house, it's about how to get the pipework to the various different indoor units, and also the challenge of trying to keep it to a unit that fits planning permission.

[41:35] Shaan Jindal: That makes a lot of sense. Great. Well, I think we should probably move into some of the questions from the audience now, because I can see a lot have come in.

I'll start with one here from James, who said: "If introduced to the fully funded grant schemes, how should local government and social housing providers decide whether to give households air-to-air or air-to-water? It will be increasingly important to factor in residents' interest in air-to-air for cooling."

How should we decide for social housing providers whether they should be giving air-to-air or air-to-water, which touches a little bit on what we were just talking about right now, but perhaps it might be a little bit different in a social housing space? I have a couple of thoughts, but I'll open up to the rest of the panel first.

[42:31] John Ewbank: You should look at what risk factors you have with the person. Essentially, are they going to heat intermittently a lot, and are they unlikely to change their behaviour if you tell them not to? I know that Nesta has done some work and found in some people's homes, some people will get an air-to-water heat pump and they'll just turn it off at the wall to stop it running, because they're like, "Oh, I don't need heating at the moment."

I was working on a committee for a fuel poverty report with the Carbon Trust, and they found that often the weather compensation wouldn't be set correctly. I think the one advantage with air-to-air is that it's more forgiving. So if an installer's done a bad job, the outcomes are likely less bad. But air-to-water, if you really want to design it well, will probably be more efficient and more comfortable.

[43:34] Hamid Salimi: Just to quickly answer this and give my opinion: the work that Nesta has done about air-to-air and explaining how they work is very important. I see some questions—I don't recall when we as a manufacturer started producing our air-to-air heat pumps as heat pumps, because they used to be cooling-only air conditioners. That was a long time ago, perhaps 20 years ago. So for the last 20 years, I haven't seen a product which will provide only cooling. Now, that may not be true for all other manufacturers, but my personal experience with Daikin equipment means that all air-to-air heat pumps are capable of providing cooling as well as heating.

And that's the awareness bit. I think it's down to us and manufacturers to go and talk to local authorities and housing associations, because the funding is available, and the funding is for all sorts of heat pumps. It's the awareness and having those discussions with the decision-makers that air-to-air heat pumps can cool as well as they can heat, and then talking about the benefits of air-to-air heat pumps. For the properties I mentioned before, it's a no-brainer to use air-to-air heat pumps: they are easier to install, they are quicker to install, they are more cost-effective to install, and they have the benefits that I mentioned earlier. So it's just the awareness piece that we need to work on.

[45:18] John Ewbank: One way that Shaan and I ended up looking at this a bit in the report was: if you get rid of the government grants, what are you going to install? I think that changes the conversation quite a lot. It depends what the government does in future, but if the grants are removed for air-to-water, people are going to default to air-to-air, I think.

[45:40] Shaan Jindal: I'll just chip in a little bit on this. John, you made a point that resonates a lot with me, which is around the social housing residents or tenants: if they are unlikely to be able to adapt to a continuous heating pattern, then there's a chance that air-to-air may be slightly more forgiving in terms of comfort, cost and efficiency used intermittently. There's still a little bit of an open question around that.

So just to say, working with both John and Hamid at Daikin, we are going to be doing some testing in the Salford Energy House to test air-to-air used intermittently versus continuously, to try to dig into that a bit more. That will hopefully help give some confidence to local authorities and social housing providers in terms of another point of evidence to help them choose between the two technologies there.

Also, just to plug a thing from Nesta as well: we've got a project looking at called Clean Heat Neighbourhoods, which is looking at heat planning for a local neighbourhood level. We're launching a heat planning tool in February designed with and for local authorities. One of my colleagues will share a link to that in the chat now, but that might be a useful tool to start digging into what technologies might be useful where for local authorities, and I guess social housing providers as well.

[47:18] Leah Robson: From an installer perspective, I think one challenge with air-to-air is that you are potentially talking about bringing a whole new workforce into working for local authorities and on government schemes. So it's a lovely argument, John, to say that we don't have to worry about weather compensation anymore if you've got a rubbish installer who doesn't know how to do weather comp. I'd still get a little bit worried about them messing about with F-gases and running pipework all around my house. So let's find some more competent installers, and not just change technology.

So you've got some challenges around the workforce, that people who do air conditioning have been largely working within either big commercial or in the private sphere, and it is a pretty unregulated marketplace. I don't know any air conditioning engineers who worry about planning permission for an air-to-air unit, for example. Whereas because as air-to-water installers we've been under the purview of the Boiler Upgrade Scheme grant and MCS for all this time, there is a lot more being used to trying to comply with what you're meant to be doing. I appreciate there's still some challenges.

[48:38] Shaan Jindal: Definitely. It's definitely not a case of throwing a different technology into it and that being the solution, for sure. Especially as we said in the report as well, the pathway of becoming a competent air-to-air installer is equally challenging as air-to-water.

In the interest of time, I'll move us on to another question. I can see one of these has got quite a few thumbs up, which means lots of people might be interested in it. We've got a question asking: "Can you clarify whether air-to-air also manages vapour control similarly to how MVHR would, or would this be two separate systems?"

[49:18] John Ewbank: I replied in the chat that there are some systems that can do it. The Daikin Ururu Sarara can draw in fresh air from outside; the Midea GA, HiSense FreshMaster. This hasn't been something that manufacturers have been too concerned about for a while, so maybe this will become more prevalent with Part O, as people think more about it.

[49:55] Hamid Salimi: Something which I wanted to add to this is: ducted fan coil units or ducted air-to-air heat pumps will have the function to allow for fresh air coming into the building. So if the installer knows what they're doing, then they can allow for a percentage of fresh air into the house, into the room.

The other thing, as John mentioned: there are products like Ururu Sarara which will provide heat and cooling, but then humidification and dehumidification as well. On the outdoor side which sits in the garden, it has a big sponge that absorbs moisture, and it will then harness that when it's needed when you say that you need some moisture inside the house.

Another thing which I wanted to highlight is something which we don't mention a lot with air-to-air heat pumps: with air-to-air heat pumps, you also bring in air filtration. I'm not talking about your normal dust filters; I'm talking about very advanced filters, like Flash Streamer technology. Flash Streamer technology, for example, will use electrons to work with air particles and break down air particles, allergens and pollens and things like that. So you're bringing in air filtration which will then improve the quality of the air inside the house.

And as a byproduct, in cooling mode air-to-air will also dehumidify. So again, it's doing more than just providing heating and cooling, although it's not going to be a controlled dehumidification, but there will be dehumidification when the product is working in cooling mode. So these are some additional benefits that we don't shout about, but they will improve the indoor air quality.

[52:16] Shaan Jindal: I've got a question that's got lots of thumbs up here as well from Carl, who's asking: "What are the comparable SCOP and costs of air-to-air and air-to-water systems?" I have a feeling that there might not be as much data as we'd like on this in terms of the real world, but I don't know if any of you have come across anything, or perhaps from your experience of installing them or monitoring them, you might have some information?

[52:39] John Ewbank: People need to be aware that air-to-air and air-to-water are potentially very different in this regard. Essentially, that's because you design your air-to-water system to run at a certain flow temperature, so you basically can spec it to have very large radiators and have a high coefficient of performance if it's operating well. With air-to-air, it's much more down to—and you'll get high coefficient of performance regardless of almost any heat pump you put on it, as long as it's sized correctly, it doesn't matter really what brand. With air-to-air, it's different: you're going to have different results from different manufacturers with different internal heads, and it's less predictable.

So it's probably worthwhile looking at the manufacturer data sheets for the units you're installing. Let's say you're putting one in and you see that one manufacturer's cheap unit says it's got a COP of 3, that is a laboratory measurement. It's going to have a COP of 3 in that situation. It's the same thing for the SCOP measurements: the SCOP measurements in the manufacturer data sheets apply to that test, which means they'll probably be fairly applicable across all manufacturers. So if you look at that SCOP, you can look across different brands and say, "Well, this one's worse, this one's better."

But realistically, we don't really have enough data to say for sure, air-to-air versus air-to-water, what's better. I would swing towards air-to-water will be better if you have a very well-designed system, so you're talking like OpenEnergyMonitor. The systems on there are probably going to just nudge out Octopus and things like that, but that's a guess.

[54:23] Leah Robson: Because I think there just hasn't been the kind of focus that we've had on air-to-water heat pumps. On air-to-water heat pumps, we're very clear about a design temperature. So you're talking typically, once you've installed a system, you're looking at the SCOP at, let's say in London, minus 2 outside for an internal temperature of CIBSE limits, 21 and 18. So that's all very set and settled. Whereas an air-to-air system for heating or cooling, what design temperature are you going to? What temperature are you trying to achieve inside the house? Or for cooling, are you looking at a SCOP when it's 35 degrees outside, or are you looking at a SCOP when it's 28 degrees outside? Are you trying to get your house to 18 inside, or are you happy to settle to just knock a few degrees off? So there's so much more in terms of variability, and there just hasn't been the focus on that as a measure when it comes to air-to-air, because as Hamid said, until relatively recently these were just cooling units. So it's a whole new thing that we're into if we're talking about air-to-air for heating.

Cost-wise, just from our experience, if you go for a whole house, it looks like it's about two-thirds of the cost to supply and install air-to-air versus air-to-water. But again, how long is a piece of string? Because how many radiators are you replacing, are you going with fan coils throughout, etc.? It's a bit hard to say.

[55:58] Hamid Salimi: Just very quickly: when you compare the SCOP and efficiency values from the book, as John mentioned, for air-to-air and air-to-water these are tested at different conditions or different environments or different standards, so you're not comparing apples with apples. But when you look at the SCOP, or seasonal coefficient of performance, of air-to-air versus air-to-water for, let me say a 5 kilowatt system, then air-to-air will show a higher SCOP, for example. But that doesn't mean that in a real-life scenario it's going to be always higher efficiency than an air-to-water heat pump. And again, one thing to bear in mind: we need to make sure that we are comparing apples with apples. Do we compare an air-to-water heat pump which provides both heating and hot water with an air-to-air heat pump which doesn't provide hot water, for example, just space heating? So I think that's something that we need to bear in mind.

In terms of the cost, cost is derived from three things: the material cost—the manufacturer material cost, the third-party material cost like pipes, insulation and things like that—and then the labour cost. As I mentioned before, it's quicker to install an air-to-air heat pump, and when you look at the material cost, an air-to-air 5 kilowatt is cheaper than a 5 kilowatt air-to-water heat pump. And then when you look at piping-wise, an air-to-water heat pump will need an inch pipe flow and return, whereas air-to-air will need much smaller copper pipes. So when you compare them, as Leah said, I agree with her, it's cheaper to install an air-to-air heat pump compared to air-to-water.

[57:51] Shaan Jindal: Great, thanks for that, that was really useful to hear. I think we'll just go for one last question. I'm aware of time, but I think we've got just enough for one more, and then we'll wrap up.

There have been a couple of questions about the Boiler Upgrade Scheme grant. What's—do we have a sense of when the BUS grant for air-to-air will be in place?

The latest I've heard is that it's with the UK Accreditation Service to turn the MCS standards into something applicable and practical. I haven't heard a clear timeline on that myself. I don't know if anyone on the panel has? Shake your heads if yes or no.

Yeah, that's kind of where it is. And then there's a question around how people can get the BUS grant. Once it's available, you'll be able to find an MCS-certified air-to-air installer to get the BUS grant.

[58:53] John Ewbank: I was going to say that I think a lot of people are becoming a bit grant-blind, because people are thinking, "Yeah, great, that's a free lunch." But the MCS standards and their requirements are going to absorb a significant amount of that grant, so maybe £1,500 of the grant will just go on admin, so your net costs are going to be still pretty high. So I wouldn't bank on the grant. There are rumours that they might change it at some point, but there's not been anything concrete, especially regarding systems that can do air-to-air and air-to-water. I understand they're looking at that, but there aren't enough systems on the market at the moment for them to commit.

[59:37] Hamid Salimi: I don't know when it's going to be live, but I can give you some additional information. What I know from manufacturer sites: most manufacturers are ready, because for the product to be eligible for the grant, it needs to be on the MCS database. And Daikin pioneered this—we put our first air-to-air single split and multi-split on, and they're ready to go on the MCS database. MCS are pretty much ready with their standards, I believe. What's the gap is getting the scheme extended and signed off by UKAS. MCS is doing that, and obviously that will need some time. Once we get the sign-off from UKAS, then we are good to go.

One thing worth bearing in mind is that you can retrospectively go and apply for a grant, and I believe it's three months. Anything that you've done, once MCS have said "yes, go ahead", you can retrospectively go three months behind and claim the grant. So you will have that window even if you've installed something and you're within the three-month period.

[01:01:03] Shaan Jindal: Great, thanks very much, Hamid, for that.

I can see we're now definitely over time, and unfortunately there are so many more questions I'd like to ask, as well as I'm sure that the audience have, but we'll have to wrap it up there, I'm afraid. There was a question around best resources for signposting the public: we can collect them amongst us and send that out with the follow-up email, that would be something we can do.

Otherwise, I guess we have to say sorry, that's it for now, and thank you all so much for a really interesting discussion. It's certainly given me lots to think about, and some new pieces of information as well to reflect on, and I hope everyone listening has found it useful, too.

Before we wrap up, I'd be really grateful if those joining online could fill in the short feedback survey. I think the link will be shared in the chat with you now, but also emailed to you after the event. Just to say as a thank you for filling out the survey, you'll be entered into a prize draw to win a £50 bookshop.org voucher.

So yeah, I just want to say thanks very much again to everyone for joining, and thanks to Leah, Hamid and John for joining us today. I hope you all have a great rest of the day. Thank you.