Navigating the costs swamp

From consumer protection to technical standards, heat networks will be subject to a wide range of new requirements from January 2026.

Part of consumer protection is to ensure that customers are treated fairly and get the service levels and protections they deserve. This is particularly the case with respect to what customers are charged – with heat networks needing to charge fairly and transparently and, ultimately, deliver affordable, reliable heat.

However, finance is also a crucial issue for heat network operators and while the government is working to improve pricing for consumers, the swathes of rule changes are causing big financial questions for housing providers themselves.  

For example, fair pricing needs to apply to how operational costs are recovered from customers. Heat network operational budgets are a significant area of expenditure for housing providers and those costs must be recovered in a way that is fair to the operator and its customers as well as other residents which are not on a heat network.

Chirpy Heat’s Costs and Compliance package offers four key services to help resolve budgeting issues while supporting in all areas of getting pricing for customers regulation ready.

We are on hand to provide expert input so your business can adapt, grow and flourish.

Let’s have a closer look at the four steps in Costs and Compliance…

1. Heat Network Budgeting

The cost of new regulations for you depends on your heat network management and compliance costs as well as your recharge mechanisms.

Using our knowledge of heat network regulation and management, plus details of your portfolio, we will create outline heat network budgets for: the preparation phase, the transition phase, business as usual and a 10-year asset investment programme.

2. Fair Pricing Policy and Audit

With budgeting sorted, Chirpy Heat can help ensure your prices are fair and proportionate, the principles Ofgem has said it will use to assess heat prices.

Our Fair Pricing Service can offer: an initial assessment of your tariff and service charging, a deep dive on these with recommendations for improving, support developing a fair pricing policy, heat tariff creation, fair pricing communications and support should Ofgem investigate your pricing.

3. Heat Tariff Structure and Process

In your journey to ensuring all heat tariffs, charges and bills are fair, we can support you to develop a consistent and justifiable approach to your heat tariffs, making it easier to communicate your approach to customers and the regulator.

We will outline potential tariff inclusions and exclusions and structure options for recharging of fixed and variable heat network costs.

4. Service Charge Review

Service charges are a key financial tool for social housing providers, and regulations will be making sure these too are fair, reflective and transparent.

Chirpy Heat will help reduce financial, compliance and reputational risks by providing a detailed review of your current service charges in relation to heat network operational costs. You will also receive a summary report looking at allocation, recovery risks of non-compliance and recommendations.

At Chirpy Heat we are passionate about simply better heat networks, and we are looking forward to working with existing and new clients to overcome any costs and compliance challenges they may be facing.

Get in touch at simplybetterheatnetworks@chirpyheat.com to discuss how we can support your journey.