Logicor aims for Heating as a Service

Neil Williams

14 Apr 2019

  • Client: Logicor
  • Sector: Heating
  • Persona: Low carbon innovator
  • Size: SME (50-100 employees)
  • Situation: Accelerated growth
  • Hired Tilix for:
    • Business architecture
    • Digital engineering
    • Licensee consulting

Logicor has developed an all-electric infrared heating system that delivers comfort more efficiently than conventional radiators: their Clear Heating System (CHS) uses infrared panels to directly warm the objects contained within a room. With this radiant heating you feel the warmth much quicker and it minimises heat lost from opened doors or windows. The CHS requires no plumbing, boiler or complex wiring and it can be easily installed.

The CHS uses intelligent controls to use only the amount of energy necessary to keep spaces at the temperatures specified by the user – ensuring maximum comfort and efficiency with minimal effort.

Combined with renewable generation, the all-electric CHS has the potential to deliver zero emission heating and play a major role in low carbon living.

The Opportunity

Many consumers find it difficult to control how much they spend on their heating, whilst two thirds of UK households suffer from damp, drafts and even overheating in the middle of winter.

Additionally, emissions from heating rooms and hot water in households must reduce by 95% to reach Net Zero targets. To achieve this, we need to revolutionise the way we heat millions of homes within the next decade.

Logicor is giving consumers improved control over their heating and making it easier for them to identify where heat is being wasted. Crucially, with this technology future consumers could buy “heating as a service”: paying for the levels of comfort that suits their lifestyle.

Logicor have installed their systems in thousands of homes spread across the globe. Therefore, these households are early adopters of the kinds of smart technology that will become the norm towards the middle of the 2020s.

Logicor technology and innovative business models can help households change their behaviour around heating. The firm’s holistic vision is to provide customers with simpler ways of paying for a warm home, improve their well-being and increase the energy efficiency of their homes. This will be a great result for consumers and for the environment.

The Challenge

Infrared heating is well known in commercial and hospitality sectors but relatively unknown as an alternative for domestic heating. Feedback from early adopter residential customers suggested that bundling electricity supply with a smart home system is a compelling offer.

Currently energy suppliers in the UK can only sell energy to customers in strict kilowatt hours (kWh) units. However, Ofgem and BEIS are open to the idea of households buying heat plans which are tailored to their specific needs.

Having discovered that forming partnerships with incumbent energy suppliers was hard work, Logicor decided to go it alone and set up its own licensed electricity supply business.

The first step of buying a licensed shell company was relatively simple. The next steps included integrating systems and meeting stringent industry codes. Due to the high levels of complexity, external help was sourced from tilix.energy for jobs such as regulatory compliance, wholesale, balancing, settlement, metering, consumer protection, technology, front office and back office.

Tilix Approach

From the outset, tilix.energy deployed a team which combined depth of knowledge in administering an electricity supply business with broad ranging expertise in marketing and innovation.

The latter is pretty hard to do. A key contribution from Tilix was carefully positioning Logicor Energy in the market. This involved repeatedly refining the value proposition based on the trends, threats and opportunities found from studies of the electricity supply market. This covered tariff types, use of technology, market size, segmentation, competitors and voice of the customer.

On the business administration side, it is clear that the process and information technology requirements at Logicor Energy are vastly different than in most other supply businesses. The target size of the customer base is relatively small, so making a business case for the IT used in standard utility businesses is difficult.

Furthermore, Logicor’s novel customer value proposition calls for extreme agility from its IT vendors. Therefore, tilix.energy devised a business architecture that is flexible enough to support frequent hypotheses, experiments and insights.

The information technology used by Logicor, based on tilix.energy recommendations, was chosen because it supports the firm’s “state of flow” and helps create a business environment where ideas and discoveries are natural and profuse. Given such a novel business architecture, tilix.energy provided frequent regulatory insight to Logicor leadership and have fostered an open and collaborative relationship with Ofgem et al.

Tilix involvement will continue as Logicor Energy completes its controlled market entry.

Benefits

Energy as a service can provide a powerful stimulus for switching households to low carbon heating and a route to market for the smart home innovation provided by Logicor.

From tilix.energy’s broad ranging support, Logicor has benefitted from a tailored deployment that addresses commercial barriers, de-risks the enterprise, has helped secure investment and supported the scale-up of the core heating business.

We chose Tilix not just for expertise in electricity supply but also for visionary leadership in a rapidly changing market. We are delighted with the results. Logicor Energy is a unique electricity supply business with tariffs to match. As well as directing and controlling this supply business, tilix.energy has helped in accelerating the growth of our core products in the market. David Bowen, Managing Director of Logicor.

Moving forwards an important focus for Logicor will be in making low carbon energy inclusive and not only for those able to afford to be an early adopter of new technology. The work to date has provided valuable insights into how transforming the role of an energy supplier can improve the quality of life for those struggling to keep their homes warm. The advantages include more manageable bills and clear incentives for sustainable energy behaviours.

We enjoy working with the tilix.energy team and look forward to more collaboration in the future. It is essential for Logicor to have innovative partners who think big, get stuff done and have fun. In tilix.energy we have formed a win-win relationship: it makes good commercial sense and is perfectly aligned with our mission to help people reduce energy consumption. This lowers emissions and is vital for the environment. David Bowen, Managing Director of Logicor.

About Tilix

Tilix understands that there is no one size fits all solution. The firm knows when to use different tools and how to adapt to different business cycles from startup to turnaround.

Start-up and SME clients leverage Tilix playbooks to develop their capabilities and deliver a more effective business. Larger enterprises use Tilix to augment their own staff. Entrepreneurs trust Tilix to help generate ideas, find the most promising options and create tangible results.

Tilix particularly enjoys applying their commercial and technical expertise around buying, selling, moving, metering and managing energy in setting up new energy supply businesses.

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