Following the announcement, we spoke to the company’s CEO, Johan du Plessis, to find out more about his hopes for the future, and what changes he feels need to happen to bring about the right conditions for growth.
It was on January 9 that tepeo revealed it was having to rethink its business strategy, saying the current policy landscape is making it impossible to scale a new low carbon tech such as the heat battery.
Despite having to reduce the workforce by half, the company will continue to meet existing demand and serve its customers while also continuing to lobby government for ‘a more level playing field’.
Johan remains hopeful that change will come, and when it does, he says the appetite from investors is also there, ready to go. It’s just unfortunate that it didn’t come before the business ran out of road.
“It has been a pretty brutal period,” Johan told Renewable Energy Installer magazine.
“What is clear is that the clean heat market is still in the starting blocks. There are increasing numbers of consumers looking to decarbonise, but without further policy support, the market will not get going.
“It’s not as bad for heat pumps, because there are changes coming through, such as the extension to the Boiler Upgrade Scheme and forthcoming changes to planning regulations, such as the one-metre rule.
“But while heat pumps will be the best solution for decarbonising heat in the majority of homes, it’s not one size fits all. Heat pumps won’t work for around 20% of homes, mainly where there isn’t enough space for one. Heat batteries, or zero emission boilers (ZEBs), offer an alternative solution, but we need that policy support and funding support.”
There are several key changes that Johan says are needed to boost the heat battery sector.
Key changes needed to boost heat battery sector
VAT relief for heat batteries
One of the main issues Johan has been campaigning for is VAT relief on heat batteries.
He says absorbing the cost of VAT, like the government does with heat pumps and biomass boilers, would help improve take-up of the heat battery, which is another low-carbon alternative to the gas boiler.
This was on the agenda under the previous Conservative government but didn’t come to fruition in time. It’s now something the new government is understood to be looking at.
Johan said: “I’m positive that VAT relief will return to the table. There isn’t another example of a low carbon product that doesn’t get VAT relief. I would be very surprised if doesn’t happen.”
Grant incentives
Johan also wants to see heat batteries qualify for consumer grants under the Boiler Upgrade Scheme.
“It’s essential that the BUS gets expanded to cover other technologies such as heat batteries,” Johan said. “Maybe not for the same amount as it’s not as expensive to install, but something towards it would help.”
Warm Homes Plan
Much emphasis is also being placed on the Warm Homes Plan and what it could entail to bolster support for heat decarbonisation. Johan says it’s vital that the plan contains clear strategy and timescales for action.
Other factors such as the re-balancing of electricity prices versus gas is also needed to help improve market conditions for electrified heat sources.
Positive change is coming
“I’m confident that change will come and I’m positive for the future, but it’s not coming quickly enough and we just ran out of road,” Johan added.
“We have investors lined up, but they also want to see a clear roadmap for action.
“The rhetoric from government is positive. I was at a meeting at Westminster recently which was specifically looking at heat batteries. They are currently running the Homes for Net Zero trial which includes 50 heat batteries, and an MCS standard is now being developed for heat batteries, which is a gateway to subsidy.
“We need to get that in place for the spring, and then hopefully the Warm Homes Plan will be a clearer strategy, with a comprehensive plan for the 20 to 30% of homes that can’t have a heat pump.
“We have ensured the business is now on a sustainable footing to keep going, while we continue driving for policy and regulation change. We’ll be ready to grow again once that comes through.”
The tepeo story
Tepeo was founded in 2018 because Johan, an engineer who previously worked as head of smart heat at OVO, wanted to give customers a low cost, low carbon route away from fossil fuel heating, that also offered flexibility to the grid.
After spending a couple of years researching and developing the product, tepeo started selling its first zero emission boilers at the end of 2021. The business peaked at 60 members of staff last year and hopes to recover to these levels when the market develops.
The product is manufactured in Wokingham.
Image credit: tepeo.