HEAT NETWORKS (METERING AND BILLING) REGULATIONS

The Heat Networks (Metering and Billing) Regulations 2014 affect all businesses within the UK that supply and charge for heating, cooling or hot water to a final customer through communal heating or a district heating network (heat suppliers) including multi tenanted buildings with a shared heating and cooling system.

The three main requirements are:

• Initial notifications to government with subsequent notifications every 4 years thereafter;
• To install heat meters subject to feasibility/cost effectiveness evaluation where applicable;
• To use heat meters to produce billing which complies with legislation where heat meters / HCAs are installed.

District systems and building level meters are required to comply without consideration to feasibility. For other heat networks, the requirement is subject to meters or heat cost allocators being determined as viable for installation, and being installed. Once installed, the heat supplier must ensure that the bills and billing information for the consumption of heating, cooling and hot water are accurate, based on actual consumption and compliant with the regulations. If heat meters are already installed, the requirement to maintain and use these to recharge remains.

From 2020, the requirement for many heat suppliers to undertake cost effectiveness evaluations for the mandatory installation of heat meters was introduced.

The 2020 amendment to the regulations introduced 3 building classes – viable, exempt and open class.

1. EXEMPT CLASS
   Those in the exempt class, as the name suggests, are exempt from installing heat meters and undertaking the cost effectiveness evaluation. Included in the exemptions are the following:

• Buildings with communal systems where heating/cooling is distributed by a means other than water (for example split unit and VRF systems which use refrigerant).
• Existing buildings comprising of supported housing, almshouse accommodation and purpose-built student accommodation (for those buildings connected to district systems, this applies only to buildings which do not fall in the viable class).
• Existing buildings where more than 10% of the premises/dwellings are subject to a leasehold interest where the lease began before 27th November 2020 and contains a provision which prevents billing based on actual consumption (for those buildings connected to district systems, this applies only to buildings which do not fall in the viable class).

2. OPEN CLASS
   Those in the open class are required to undertake the cost effectiveness and technical feasibility evaluation, and install meters (or if heat meters are not feasible, heat cost allocators/hot water meters where cost effective/technically feasible) for final customers where confirmed to be viable based on this assessment. This includes the following buildings:

• Newly constructed building with a communal heat network (which does not fall in the exempt class) connected on or after 27th November 2020 and before 1st September 2022.
• Newly constructed building with a communal heat network (which does not fall in the exempt class) connected on or after 1st September 2022 where there is more than one entry point for the pipes; or the building (or any part of the building) is supported housing, almshouse accommodation or purpose-built student accommodation.
• Existing buildings where heat meters or heat cost allocators are installed in all private dwellings or non-domestic premises within that building.
• Any other existing building which does not fall into the exempt class or viable class.

3. VIABLE CLASS
   Those in the viable category have a mandatory requirement for heat meters to be installed. This includes the following buildings:

• Buildings connected to district heating systems which are newly constructed and connected to the network on or after 27th November 2020.
• Buildings connected to district heating systems that undergo major renovations relating to the technical services on or after 27 November 2020.
• An existing building where meter installations have previously been mandatory.
• A newly constructed building connected to a communal network, which is connected on or after 1st September 2022, which does not fall into the open or exempt classes.

Heat suppliers need to determine which category each of their heat networks falls into.

It is possible for properties to change class after their initial determination where changes occur to the building. Where a building moves from an exempt class to an open or viable class for example, the requirements of the newly applicable class will apply.

The regulations require the use of installed heat meters for billing and apply to all meters installed on the heat network, regardless of whether they have been installed under a duty in the regulations or existed prior to introduction of the regulations.

The guidance also stipulates that replacing meters (at the end of their life or in the event of failure/inaccuracy for example) is expected to be generally possible. However, in cases where it would be technically impossible or the estimated cost would be unreasonable, this must be evidenced to the regulatory body. This impacts properties where heat meters exist which pre-date introduction of the regulations, but meters have not been maintained/are not accurately recording and require replacement.