The document discusses how costs are divided for community heating systems. Residents typically pay a fixed fee towards infrastructure costs and a variable fee based on individual metered usage. The total costs can be split into the costs of operating and maintaining the central infrastructure, losses in transporting the heat, and each property's energy usage which is measured individually. Community heating is generally cheaper per property due to economies of scale when systems are well-designed and managed.

1. Community
Heating: Who Pays?
Who is responsible for the various charges
amassed by district heating systems, and
how are these costs divided up?
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Over 80% of UK households have a gas boiler. As
well as being expensive to fuel and maintain, this
method of individual heating systems is relatively
unusual across mainland Europe.

3. www.switch2.co.uk
Over 80% of UK households have a gas boiler. As
well as being expensive to fuel and maintain, this
method of individual heating systems is relatively
unusual across mainland Europe.

4. www.switch2.co.uk
Over 80% of UK households have a gas boiler. As
well as being expensive to fuel and maintain, this
method of individual heating systems is relatively
unusual across mainland Europe.

5. www.switch2.co.uk
Over 80% of UK households have a gas boiler. As
well as being expensive to fuel and maintain, this
method of individual heating systems is relatively
unusual across mainland Europe.
Why is this the case?

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On the continent, community heat and power
systems are often shared among estates, suburbs
or even whole villages.

7. www.switch2.co.uk
On the continent, community heat and power
systems are often shared among estates, suburbs
or even whole villages.
Almost 95% of flats in Finland
use district heating.

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The total cost of a community heat and power
system can usually be split into three elements:

9. www.switch2.co.uk
The total cost of a community heat and power
system can usually be split into three elements:
1. The cost of operating,
maintaining and
replacing the central
infrastructure.
This is generally fixed,
if funds are set aside
for maintenance and
replacement.

10. www.switch2.co.uk
The total cost of a community heat and power
system can usually be split into three elements:
1. The cost of operating,
maintaining and
replacing the central
infrastructure.
This is generally fixed,
if funds are set aside
for maintenance and
replacement.
2. The mains losses - any
heat lost between the
boiler and the meter in
each property.
This loss is taken into the
tariff as a fixed cost and
usually allocated based on
property size.

11. www.switch2.co.uk
The total cost of a community heat and power
system can usually be split into three elements:
1. The cost of operating,
maintaining and
replacing the central
infrastructure.
This is generally fixed,
if funds are set aside
for maintenance and
replacement.
2. The mains losses - any
heat lost between the
boiler and the meter in
each property.
This loss is taken into the
tariff as a fixed cost and
usually allocated based on
property size.
3. The amount of energy
used by every property.
This varies per property,
but is measured and billed
using conventional domestic
energy meters or smart
meters.

12. www.switch2.co.uk
Residents typically pay a fixed fee towards
infrastructure costs, plus a variable fee based
on individual metered usage.

13. www.switch2.co.uk
Residents typically pay a fixed fee towards
infrastructure costs, plus a variable fee based
on individual metered usage.
Because community heat and power systems
offer economies of scale, the cost per property is
usually reduced if the systems are well designed
and managed.

14. www.switch2.co.uk
Residents typically pay a fixed fee towards
infrastructure costs, plus a variable fee based
on individual metered usage.
Because community heat and power systems
offer economies of scale, the cost per property is
usually reduced if the systems are well designed
and managed.
This lowers fuel poverty and increases people’s
sense of value-for-money – lessening the risk of
non-payment.

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Community energy schemes are generally not-
for-profit, and are typically managed by local
authorities or energy service companies.

16. www.switch2.co.uk
Community energy schemes are generally not-
for-profit, and are typically managed by local
authorities or energy service companies.
Don’t forget that the Westminster and Scottish
Governments offer loans and grants towards
startup costs for new district heating systems.
The renewable heat incentive subsidy applies
to CHP and district heating schemes, too.

17. www.switch2.co.uk
Don’t overestimate the cost-effectiveness of community
heat and power plants – residents may end up paying
more than they’d expected (or budgeted), plunging
them into debt.

18. www.switch2.co.uk
Don’t overestimate the cost-effectiveness of community
heat and power plants – residents may end up paying
more than they’d expected (or budgeted), plunging
them into debt.
Communicate effectively with
residents, to ensure they
understand the future costs.

19. www.switch2.co.uk
Don’t overestimate the cost-effectiveness of community
heat and power plants – residents may end up paying
more than they’d expected (or budgeted), plunging
them into debt.
Communicate effectively with
residents, to ensure they
understand the future costs.
Study long-term raw material
costs before calculating likely
future bills.

20. www.switch2.co.uk
Don’t overestimate the cost-effectiveness of community
heat and power plants – residents may end up paying
more than they’d expected (or budgeted), plunging
them into debt.
Make it clear to residents whether a sinking fund for
infrastructure repair is included in regular payments, or
whether one-off fees will be levied occasionally.
Communicate effectively with
residents, to ensure they
understand the future costs.
Study long-term raw material
costs before calculating likely
future bills.

21. www.switch2.co.uk
Credit or pay-as-you-go?

22. www.switch2.co.uk
With community heating systems, the choice between
conventional billing options or pre-payment can be made
on a property-by-property basis. While many people
prefer the former option, the latter reduces debt risks
and increases flexibility. It’s becoming an increasingly
popular method of billing and payment, with almost half
of people in a recent survey expressing a preference for
smart pay-as-you-go energy meters in their homes.
Credit or pay-as-you-go?

23. Steps to Saving: The Journey to Community Heating
Download Now
Discover more about how community
heating systems can transform the
way we heat our homes.
Download your free eGuide now:
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