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How to save money and energy on space heating

For many Scottish organisations, space heating can account for as much as half of total energy costs. Simple low-cost improvements to your heating controls and distribution system could deliver substantial savings.

Identify heating improvements

Heating in our workplaces is critical, but is also a big expense. For many Scottish organisations, space heating can account for as much as half of total energy costs.

Simple low-cost improvements can be made to your heating controls and distribution system that will deliver substantial savings as well as further opportunities to save money by upgrading or changing your source of heat.

This guide will help you identify potential improvements. Where investment is required, the guide also helps you to start thinking about setting out and evaluating your business case.

Understanding your current energy use

Most organisations are not aware of how much energy they use for space heating or what can be done to reduce consumption without affecting operations.

The key to understanding energy use and, therefore, your opportunities to improve performance, is good metering and analysis of the metered data.

Gas and electricity are the most common heating fuels, so this guide focuses on these systems. However, the information provided here can be adapted for heating systems fuelled by oil, liquefied petroleum gas (LPG) or biomass.

Gas heating

Where heating is provided by gas, it is likely that your boiler will be the only or main user of gas.  Unless you already have smart metering, you will need to refer to your gas bills to work out how much gas you are using.

If your boiler also supplies ‘domestic’ hot water (the water used for washing and showering) in addition to your space heating, an allowance needs to be made for this. Hot water use is dependent on the type of business operation. Generally, hot water use is relatively low in SMEs and an allowance of 10% would be sufficient.

Smart metering for gas and electricity

Smart meters make it simple to track space heating energy use on a daily basis.

Where detailed metering provides daily or hourly readings, data can be examined to spot any anomalies, such as heating (or other services) coming on when not required, which can then be rectified. Trends can also be analysed.

For example, if performance decreases over time, this may indicate a fault with the system that needs further investigation. Some suppliers are now offering smart meters at low or no cost in advance of the wider roll-out. So, it may be possible to get better information at nominal cost without waiting for smart meters to be mandated.

Sub metering

Sub metering of space heating systems (particularly electricity) is the most accurate way to separate out space heating demand from other energy use. New non-domestic buildings (from 2002) are required to put in place metering that enables at least 90% of the estimated annual energy consumption to be assigned to the various end uses (such as heating and lighting). For existing buildings, this approach would also be considered best practice.

Analysing and using energy and cost data

Once you know how much energy is being used for space heating, you can compare how your building performs against that for other buildings in the same sector. To take account of variations in size, the metric most used for comparison is kilowatt hours per square metre per year (kWh/m2/year). You will also need to know the area (m2) of your building.

Dividing your average annual space heating demand in kWh by the area of your building will give you your kWh/m2/year. This figure can then be compared with that for other sites in your organisation or published benchmarks.

Using your performance data

Once space heating demand is known and has been compared with any available benchmarks, targets can also be set for reductions in demand. Having a good understanding of how much space heating costs can be very useful if you need to get senior management support for any time or financial investment required to investigate and implement cost saving actions.

Comparing your consumption with that of similar organisations and, possibly, other sites in your organisation, will help you to engage and motivate senior management in the process of reducing demand.

Your annual demand figures and benchmark comparisons will also provide the basis for estimating the potential savings available to you by implementing efficiency measures and tracking progress against those targets. However, care should be taken when measuring short-term performance improvements as they need to take account of weather conditions that may have affected your organisation’s space heating demand.

Make improvements to heating distribution and control

It is often possible to achieve good savings in space heating energy use by making efficiency savings through improved heat distribution and control. Heat distribution is the process of taking heat from a boiler (or other source of heat) to the point at which the heat is needed – occupied space.

Distribution is via air or water in almost all cases. Water systems are used most often where there are fossil fuel boilers and air distribution is more common for HVAC systems powered by ASHPs. However, different combinations of source and distribution mechanisms are also common.

Control of space heating can be centralised at the boiler or broken down more locally at or near the point of use – or use a combination of centralised and local control. Heating systems are normally controlled by a combination of time control, system thermostats, zone controls and localised thermostats (such as thermostatic radiator valves (TRVs)). Improving heat distribution and control is a very cost-effective way to reduce your energy use. In general, the investment required is relatively low as no major plant items need to be purchased.

Things you can do to improve heat distribution and control include:

  • Insulate pipework, especially in plant rooms which usually don’t need to be heated
  • Keep space around heaters clear
  • Investigate heat recovery – this involves using ‘waste’ heat produced by lights and appliances to contribute to space heating needs, but should be done by a specialist
  • Make best use of timer controls – most buildings will stay warm for a long time after heating is switched off, so consider setting your heating to go off earlier in the day
  • Avoid overheating – this will save energy used for cooling as well as heating. You should consider:
    • Setting appropriate temperatures for the activity being done, usually between 18°C and 20°C. It may be possible to turn down the heating without any objections from occupants – a 1°C reduction could save up to 8% in heating costs
    • Locate temperature sensors effectively – be aware the internal temperature varies across a building depending on height, elevation and proximity to windows, doors and sources of heat
    • Control heat gains – make sure your heating system responds to heat gains, for example from lighting, refrigeration, electrical equipment and processes like welding or cooking
  • Make sure staff understand and can operate heating controls, so heating can be manually adjusted if overheating occurs
  • Optimise HVAC controls and equipment – this is a specialist area, but at least two people in your organisation should be trained to operate these controls
  • Maximise the gap between the temperature where heating stops and cooling starts (known as the dead band). A minimum of 4°C is considered to be good practice – this will prevent the systems operating simultaneously
  • Use free cooling whenever the air temperature outside is lower than the area needing to be cooled
  • Fit variable speed drives (VSDs) – these reduce the energy needed to power pumps that reduce heat
  • Install thermostatic radiator valves in warmer areas, to shut off the flow of heat when the air temperature reaches a set level
  • Fit zone controls – these allow the temperature in different areas to be measured and controlled separately, useful if areas of your building are occupied at different times. If your heating system was constructed without zoning, some plumbing modification may be required

Consider replacing your heating system

Many SMEs use smaller, domestic-sized boilers. All domestic-sized boilers sold in the UK now have to be A-rated, with efficiencies of 90% and above. Reliability is also a cost issue for SMEs as employees need adequate heat to work efficiently. Replacing a malfunctioning boiler with a new and efficient model makes sound business sense.

When replacing a boiler, it is also worth considering fuel switching. This provides the opportunity to move from expensive fuels, such as oil, LPG or electricity, to less expensive and more environmentally friendly forms of heating such as biomass or heat pumps. Fuel switching is particularly relevant to SMEs that are not connected to the gas grid.

Under the non-domestic Renewable Heat Incentive (RHI), subsidies are available for ground source heat pumps (GSHP) – including water source heat pumps, ASHP (air to water systems only) and biomass boilers.

Ground source heat pumps take low-grade energy from the ground and convert it to higher grade energy for use in heating by means of a heat pump. GSHPs work best where there is a low temperature distribution system, such as underfloor heating and where the building is well insulated. Space is required outside for a collector loop – this may be a horizontal loop or a vertical loop, depending on availability of space and ground conditions. Without taking into account any RHI subsidy, natural gas is similar in running costs and carbon emissions to that for most heat pumps.

Biomass boilers may be suitable if your site has a relatively high and constant heat demand. As biomass is a renewable resource, its carbon emissions are very low, as long as the feedstock is sustainably produced and not transported a great distance.

All forms of renewable or low carbon heating can have positive corporate social responsibility (CSR) impacts and can also be used to encourage employees to become more aware of sustainability issues at work and at home.

Reduce heat losses

The most sustained and effective way to reduce the cost of space heating is to reduce heat loss. Draught-proofing is relatively cheap – consider the following areas:

  • Doors – draughts under doors can be remedied by fitting a brush strip. Also consider fitting self-closing mechanisms to make sure doors are only open when they need to be
  • Windows – most windows can be draught-proofed using adhesive foam tape. Sash windows need to be draught-proofed by a specialist
  • Other draughts – flexible sealants can be used to reduce draughts around floor and wall junctions

Improve the thermal performance of your building

Adding insulation to the building fabric produces the greatest and most enduring savings in energy use and costs. However, some measures can require considerable investment and payback periods can exceed 10 years, which can make insulation difficult to justify in rented premises.

Insulation can be considered in the following areas:

  • Roof – it is not unusual for commercial buildings to have completely uninsulated roofs. If there is an opportunity to add insulation to an uninsulated flat ceiling and there is reasonable access, this is likely to pay back the investment within 5 years.
  • Walls – insulating cavity walls will have a payback period of around 7 years. For solid-walled buildings, insulation can be applied internally or externally, and paybacks can exceed 10 years.
  • Windows – in addition to draught-proofing windows, there are further savings to be achieved from window (and door) replacement. Savings will be greatest where windows are single glazed and in poor condition


Get realistic project costs

It is essential to get realistic project costs when preparing a business case. This is best done by getting estimates from contractors. However, it is essential to set out clearly what you require so that all contractors can estimate from the same basis.

Contractors usually know more than the clients about the complexities and pitfalls of particular jobs. The costs for relatively simple tasks, such as adding improved controls to a heating system, can usually be estimated without any further work needing to be done. However, more complex jobs, such as boiler replacement or upgrades to building fabric, will require a specification that sets out the exact extent of the work to be carried out. In the case of fabric alterations, this may include changes to services and usually requires redecorating. It is also important to allow for associated works to ventilation systems or to heating controls following fabric measures.

The estimated savings from space heating efficiency measures should also be as accurate as possible. However, calculating accurate savings from space heating improvements is a complex task. There are a number of reasons for this, including:

  • The building may be heated to a higher temperature after the upgrade measure has been installed (the ‘comfort factor’)
  • Measures interact – for example, if a control improvement measure is introduced then the savings from boiler replacement would be reduced
  • Modelling cannot be relied upon to give accurate results – most models overestimate the energy used for space heating and the cost savings to be achieved from remedial measures
  • Buildings are not homogenous – they have often been added to over time, so the fabric and heating systems may not be the same in all parts of the building
  • there are many other variables in terms of how buildings are used and these can change in the future.

For all these reasons, published data on energy savings arising from improvement measures are hard to find. As buildings and the way they are used vary so much, the savings achieved by one organisation may not be replicable in another. Therefore, even published data cannot usually be used as the basis for your own calculations. The best way to proceed is to be transparent and to set out all assumptions being made in your calculations.

Identify other costs and benefits

Measures to reduce the energy used for space heating can have other costs and benefits. For example, reducing draughts and raising comfort levels may result in improved productivity and a healthier and more enjoyable environment for employees and visitors. Improvements to windows can deliver reductions in noise levels as well as reducing heat loss.

Similarly, there can be costs associated with efficiency measures where there is disruption to the working environment. For example, a door is fitted in a corridor where there was no door before, thus slowing people down.

By consulting with employees at an early stage, these issues can often be identified. Careful management of the process can then control these costs or introduce other measures to avoid them altogether. Once any additional costs and benefits have been identified, these can be included in your overall business case.


Present the business case clearly

The business case needs to be presented in a way that is accessible to managers and to the finance department and speaks the language of the decision-makers.

Estimated costs of a proposed installation should be backed up by cost estimates from contractors. Potential measures should have estimated energy and cost savings clearly set out alongside all the relevant assumptions made.

The payback period can then be calculated. Any associated costs and benefits should also be included at this point, including any marketing or CSR benefits that could arise.

Further support

Find out about further support for your organisation.