We are often contacted by property owners thunking about installing a heat pump who are confused by the different proposals they recieve from potential installers.
How can the quoted price vary by several thousand pounds for the same house?
Well let’s take a look at what the installer needs to do to quote for a project.
Let’s assume we have a three bedroom detached house built in the 60’s, it has a small extension to the side built in the 80’s
Option 1 the no cost approach
You telephone company A for a quotation, they ask you for your postcode, a few days later you have an estimate in the post.
Typically this company will have looked at your house on google street view, taken some very approximate dimensions, worked on a rule of thumb and provided an estimate.
It’s likely the estimate will be priced quite low to entice you but will state something along the lines that the estimate is based on a number of assumptions which will be checked at detailed design stage.
Producing the estimate will have taken very little time and the cost of producing it is very low. However, the accuracy of the estimate will also be very low.
Option 2 the reduced cost option.
You telephone company B for a quotation, they send a smartly dressed sales person round, they take some very quick measurements, ask how old the property is and then promis you an estimate in a few days.
When they return to the office, they will typically use a manufactures online specification tool enter the basic details and using very generic construction details produce an estimate.
Now this estimate is likely to be more accurate than company A as company B have spent more time preparing the estimate but nevertheless, it is only an estimate and most manufactures with specification tools state that they are only a guide.
Option 3 the correct way
You telephhone company C, they send their smartly dressed sales person round.
Over a cup of tea, they discuss why you want to install the system, they ask about your hot water use, they ask about what improvements have been carried out to the property, how much space you have for a hot water tank and where the heat pump will go. Next they go around every room, measuring walls, ceilings, doors, windows and radiators. Then a couple of hours later they wish you a fond farewell and promis a quotation in a week.
Upon returning to their office, they check up the u-values of your walls, your windows, your roof and then using these and the detailed measurements, they create a heat loss calculation to EN12831 as required by the MSC scheme. Then in the case of an air source heat pump, they calculate how much noise your neighbours will hear or in the case of a ground source heat pump the check up on the local geology and then design the ground loop system.
Finally a week or so later, you recieve your quotation, typicallly it will be more expensive than company A and company B because it will be accurate.
So how much does this cost?
Company A spent an hour to prepare your estimate
Company B spent an hour travelling, half an hour on a quick survey and an hour on the specification tool total two and a half hours
Company C spent an hour travelling, half an hour fact finding, two hours surveying and four hours designing the system and preparing your quotation. Total seven and a half hours.
If each company wins one in five jobs they bid for then
Company A’s cost of sale is 1 hours x 5 bids = 5 hours.
Company B’s cost of sale is 2.5 hours x 5 bids = 12.5 hours.
Company C’s cost of sale is 7.5hours x 5 bids = 37.5 hours.
So clearly company A have the lowest cost per sale so they will be best value for money, right?
Under the terms of the Microgeneration cerification scheme (MCS) all of the installers have to provide detailed design before you exchange contract, so they all have to spend as much time as company C and it is usually at that point that if all of the installers follow the rules, you would recieve almost identically sized systems at a very similar cost.