1. Micro Renewables The Future of Plumbing? March 11, 2010 David McKenzie Scottish Microrenewables Working Group World Plumbing Day

2. Microrenewables Working Group Advice to Daughters: “If you want a long and contented marriage, marry a plumber” Source:My wife

3. Microrenewables Working Group AGENDA Microrenewables – What and Why Role of the plumbing industry Challenges to be overcome

4. Microrenewables Working Group Scottish Microrenewables Working Group –SELECT, SNIPEF, HVCA, SBF, SUMMITSkills, EU Skills, CLE, SRF –Represents majority of businesses in Scottish Construction / Building Services Engineering 3,500 Companies 35,000 Operatives > 10,000 Apprentices –Commissioned by Minister for Energy in August 2008 to focus on identifying and removing barriers to success in microrenewables for small / medium size Scottish firms

5. Microrenewables Working Group Renewable Energy Targets By 2050 Scotland 80% Green House Gas reduction By 2020 EU overall 20% renewable energy UK 15% renewable energy Scotland 20% renewable energy –50% Renewable Electricity –11% Renewable Heat –10% Renewable Transport Fuels

6. Microrenewables Working Group Scottish Energy Usage Domestic energy use = 37% of all energy use Source: SRF

7. Microrenewables Working Group Challenge for domestic energy Renewable Electricity (Target 50%) UK target 2% for small scale / domestic –Equivalent to 10GW Scotland target would be approx 1GW Renewable Heat (Target 11%) 9.3% can be met by industrial and commercial Domestic > 1.7% Source: SRF Equivalent to 85000 – 275000 homes by 2020 > 65% to be installed by plumbers

8. Microrenewables Working Group What are Micro Renewables “Generation of electricity or heat using renewable resources within certain capacity limits” Technologies Renewable Electricity (electrical skills) – Solar PV – Small wind turbines – Micro hydro Renewable Heat (plumbing skills) –Solar Thermal –Heat Pump – Air, Ground and Water Source –Biomass Boilers

9. Microrenewables Working Group How Microrenewables will change the Plumbing Industry Consumers / householders will have a menu of heat options –Renewable / non-renewable –New homes / existing homes –New technologies or technology variations by the month –Financing will become increasingly complex Installers Will become energy advisers Optimal Design and Financial Options will be key Training - increasingly more important and complex Moving from product installer to trusted services provider

10. Microrenewables Working Group Fixing Barriers to Success Finance Scottish Government Grants through 2011 –30% of eligible costs to £4,000 maximum UK wide incentives –Feed-in Tariffs (FiTs) renewable electricity April 2010 –Renewable Heat Incentives (RHIs) April 2011 Challenge –No additional funding –Find imaginative ways to package available funds

11. Microrenewables Working Group Fixing Barriers to Success Challenge- Lack of Demand Answer - Proper Marketing Marketing is not just: Brochures, adverts, web-sites, exhortations, speeches Asking early adopters Marketing is: Segmentation, segment analysis, education, buyer emotions, packaging, delivery channels, financing, etc Noting that 90% of householders buy what their local plumber / electrician recommends (EST: 6 / 2009) Too important / too urgent to be left to the industry A way to get householders to pay a bigger share Moving from product installer to trusted services provider

12. Microrenewables Working Group Summary Microrenewables –Are a non-negotiable part of Scotland’s future –Major opportunity for the building services engineering industry, particularly plumbing –A potential economic growth factor Challenges –Get installers on board / make renewables mainstream –Get maximum bang for the finance buck –Drive demand