As the UK prepares to implement the Future Homes and Buildings Standard (FHS), alongside the London Plan 2026 and the UK Net Zero Carbon Building Standard, the role of traditional community heating systems in residential developments is being re-evaluated. Once considered a practical and sustainable solution, these systems may no longer make economic or environmental sense.
Community heating has long been promoted for its centralised approach, offering economies of scale, reduced maintenance responsibilities for residents, and simplified decarbonisation planning. Bulk energy purchasing and central plant management can lead to lower unit costs for heat, sometimes as low as £0.05/kWh, well below the current electricity price cap of £0.26/kWh. However, these benefits can come with significant trade-offs.
The infrastructure required for community heating is extensive. Central plant rooms take up valuable space in developments, and the associated pipework and equipment increase both embodied carbon and design complexity. Operational inefficiencies are also a concern, and whilst the generator plant is typically very efficient, 15 - 20% distribution losses are considered a good outcome due to the need for constant hot water circulation. This not only wastes energy but also contributes to overheating risks in summer. Moreover, residents often face high standing charges, typically over £500 per year, covering metering, billing, maintenance, and management, and these losses, regardless of actual energy use. Perhaps most critically, residents have no choice of supplier and limited control over their energy costs.
The Future Homes Standard could fundamentally shift this equation. While final details are pending, it is widely expected to require heating demand to be reduced to just 15 kWh/m² per year, a target already adopted by many local authorities and recommended by the leading recognised methodologies and publications. At this level, even basic electric heating becomes cost-effective. For instance, heating a typical 100m², three-bedroom apartment with electric panel heaters could cost just £390 annually based on the current price cap, without the additional standing charges associated with community systems.
Hot water, now the largest energy load in new homes, can also be addressed with modern technologies. For the example above, hot water heat pumps could reduce annual costs to under £100, while exhaust air heat pumps (EAHPs), which combine heating, hot water, and ventilation, could operate for as little as £400/year in total. This is less than the standing charges alone for many community heating systems.
Beyond cost, decentralised systems offer greater autonomy for residents, who can choose their energy suppliers and manage their own systems. For developers, removing central plant rooms frees up space for additional units or amenities, and simplifies design and installation. EAHPs, for example, can replace multiple systems with a single unit, reducing complexity and cost.
Historically, the performance required for individual systems like these to compete with community heating demanded costly upgrades - triple glazing, airtight construction, heat recovery ventilation and enhanced insulation. Today, these features are standard practice, and the FHS will only reinforce their adoption. If developers are already required to design homes with near-zero heating demand, the additional cost of centralised systems may no longer be justifiable.
Undoubtably community heating will still have instances where it is the most effective or desired solution, particularly where extensive infrastructure already exists, or where the building landlord is taking responsibility for all ongoing maintenance (eg the growing Build To Rent market). But for typical developer-led schemes for market sale, why invest in complex, costly community heating systems that offer little to no benefit to residents?
As the UK moves toward a net-zero future, the traditional model of community heating may no longer make sense - economically, environmentally, or practically. The FHS could be the tipping point that shifts the industry toward simpler, smarter, and more resident-friendly solutions. As demand reduction becomes the norm, the case for simpler, decentralised, and resident-controlled solutions grows ever stronger.
Carl Cappuccini leads EDC’s Energy & Sustainability team with a career rooted in building performance, energy strategy, and a passion for impactful design. Beginning his journey through a surveying apprenticeship, Carl quickly found his focus in energy auditing and performance modelling — laying the groundwork for a career defined by technical expertise and real-world results.
With experience spanning both large firms and specialist consultancies, Carl has grown from a hands-on energy assessor to a strategic leader, guiding teams and shaping energy design strategies across everything from single residential units to full portfolio decarbonisation programmes.
At the core of Carl’s approach is a drive to deliver tangible outcomes. He excels in helping clients design smarter, more efficient buildings that go beyond compliance — and in supporting asset managers with clear, cost-effective decarbonisation pathways. Known for his collaborative mindset and ability to translate complex technical insights into actionable plans, Carl is committed to building a more sustainable future through innovation, data, and design.
