The Value of Early Planning for Heat Metering and Billing

Failure to consider how to meter and bill customers for heat from communal heating at an early stage exposes developers to the risk of lost revenue, interruptions to customer heat supply and significant reputational damage if customers perceive that the billing system is not fair, accurate and competitive.

From our recent experience we recommend that developers including a communal heating or cooling system in their development must:

• Consider the heat metering equipment and infrastructure at an early stage. Although many modern heat meters can communicate data using wireless technology, secure locations for dataloggers, data cables and power supplies must be considered as part of the overall services design. Products selected must be secure, comply with current legislation and, critically, use open protocol communications which can be used by all specialist metering and billing contractors, allowing developers to competitively tender for metering and billing services. Installation of the data acquisition systems should be incorporated into the construction programme, not left until handover.
• Agree how the costs of operating the heating system will be charged to customers. Heat use should be billed on a per kilowatt hour basis, with tariffs set and regularly reviewed based on the cost of fuel and system efficiency. Developer commercial and legal teams should agree a clear policy on how operation, maintenance and capital replacement costs will be recovered and how VAT will be treated.
• Communicate likely costs to customers at an early stage. The high standards of service and requirements for uninterrupted heat supply can lead to significant costs for customers which are not included in service charges. Explaining these costs transparently during the sales process will reduce the chances of complaints or challenges at a later date.