Hot fuss: A fast-to-install, flat-against-the-wall, heat pump and hot water tank in one...

A Bristol-based innovator could overturn many of our assumptions about the deployability of heat pumps.

I don’t know about you, but when I go out for pizza I like to talk about heat pumps. Turns out, I am not alone. For it was at Café Napolita in Bristol that Dyson fluid dynamics engineer Russ Murchie and finance guru Matt Whitefoot were sat together, drinking coffee and eating Neopolitan, wood-fired goodness, asking why the UK heat pump market was not taking off at the pace it needed to…

They identified a few key things:

• Disruption - the Catapult’s Government-funded Electrification of Heat trial confirmed what heating engineers have known for a long time, even asking people to move their sofa a bit can be a barrier for some potential customers. Bigger changes such as swapping radiators or space for a new control room can also see them hesitate.

• Inside Space - More significantly, millions of homes in the UK have ripped out (the only allowable verb to describes how you can remove a piece of heating infrastructure, apparently) their hot water tank when they put in a combi boiler (now just 44% of homes in England have a hot water tank, down from c.80% in 2001). Many of those loft spaces are now spare bedrooms, and people will be very reluctant to give those up, even for something as exhilarating as a new heating system.

• Outside space - And lots of people in the UK do not have big gardens. This is a particular challenge for the 5.7m terraced houses in the UK.

• Install time. Another advantage of boilers is they can be fitted quickly when they need replacing. Distressed purchases drive most of the 1.5m/year market in the UK. Strangely, most people don’t wake up of a morning and think ‘oh, I would LOVE a cleaner heating system’. And if your boiler has broken, most people need a replacement fast because most people are not Wim Hoff.

But unlike most of my pizza-based chat the conversation did not stop there. Russ and Matt decided to give it a go. They teamed up with Andy McKay, a serial entrepreneur who had been involved with at least two British clean tech success stories: Evergreen (who make the Homely smart heating controller); and myenergi (who make EV charging equipment and devices that control a smart home) and they got to work. Matt and Andy also had the experience of running Evergreen’s heat pump installation business, which was one of the largest installers in the UK (and was bought by SMS in 2023).

Russ left his job at Dyson after 17 years, initially working on his own to better understand heat pump technology from a garage (in an echo of James Dyson’s years of solo tinkering to perfect the bagless vacuum cleaner that would make his fortune). Over the next few years, they built a team of engineers and designed a prototype of the heat pump they think the market needs, with a clear target market – two or three bed terraces or semi-detached homes; often seen as the toughest nuts to crack. It is a high temperature heat pump, but the magic is it combines the heat pump and the hot water tank in a single unit - which is located outside. That means it would have no need for space inside the property, and could be easily bolted on to most domestic heating systems without any new radiators or an inside hot water tank. Crucially, it can be installed fast. A typical heat pump install currently takes at least five days to put in place. Nusku think they will be able to do it in a few days or less. That means it can compete with the install speed of boilers when people’s heating system has packed it in, giving it mass appeal to people making a distressed purchase.

Now for the sciencey bit. They tested the prototype at the Salford Energy House where they tested its performance in a typical EPC ‘C’ rated home (double glazing, 100mm of loft insulation). The radiators had a 60°C flow temperature (which will make some of the heat pump purists a little, er, hot under the collar). They tested, as per SAP, for -3°C and 4.5°C ambient temperatures.

At 4.5°C, the Nusku algorithm - the smarts controlling the heat pump - reduced running costs by 13% compared to weather compensation alone. They were able to realise a comfort parity with the gas boiler at a price that was as cheap to run with current fixed energy price tariffs. At the lower temperatures, cost parity could not be achieved on a fixed-price tariff, resulting in increased seasonal running cost of 5% to the same level of comfort. But with a time-of-use tariff and an hour of pre-heating, seasonal running costs were reduced by 20% compared to a gas boiler. Oh, and they think they could install it, if they get the manufacturing right, for an all-in cost of £7,500. That means after applying the current Boiler Upgrade Scheme grant of £7,500, it would be a freebie (the team assure me the pricing point is just co-incidence, and they have been able to achieve this by cutting the costs of the install, which drives lots of heat pump costs).

The design also includes a couple of Dyson-esque flourishes. It is designed to fit snugly under a typical ground floor windowsill (see rendered image below). And - in what would have been a winner with Mrs Newey, who is constantly annoyed at the inelegant, leaf-gathering gap between our heat pump and Newey manor - the Nusku unit can fit almost flat against the wall. It also fits on a single pallet for easy van transportation and safe warehouse stacking. Again, they are trying to make it so that installers can put in as many homes as possible in a day, akin with the boiler market. They are even thinking hard about colours, rather than the kind of bland industrial beige/grey which is standard across much of the industry.

As an aside, the development of the Nusku unit is also an example of the UK’s public innovation system working well. A Fast Start grant of £50k from UKRI helped get Nusku off the ground in 2022, and in 2024 they won c£700k from the DESNZ-funded Heat Pump Ready programme, looking at innovative approaches to heat pumps. They used the Salford Energy House, a world-leading, publicly-funded test facility at the University of Salford, to try out new heating technologies in a controlled environment. The team of eight is based at Future Space, the University of the West of England’s excellent, busy innovation space in North Bristol (I went on a recent visit there to meet the team of engineers bursting with pride at what they are building). And they worked with the Energy Systems Catapult team, where we provided general acceleration support and helped to co-design and validate their business models (this was through the Climate Innovation Programme, a partnership between the University of Birmingham, the Catapult and HSBC).

Funding? So far, they have secured pre-seed investment of £295k from investors (who were from the heating industry and are providing routes to the homeowner, ECO and social housing markets), and have committed customers, if they can move into manufacturing (they are exploring potential UK sites). They are currently on a new funding round off the back of the Salford results, with lots of promising conversations and a commitment of further investment from existing investors (get in touch if you have cash and want to get in touch with them).

When venture capital are looking at pre-revenue technology companies, they tend to look for three things: Does the technology work; Potential market size; and is there a good team? Nusku - named after the Sumero-Akkadian god of light and fire, in case you were wondering - ticks all three boxes.

So what does Nusku’s innovation mean for policy and the wider system? First, the proposition would be even more attractive if we decided to stop subsidising pollution by having no carbon charge on domestic gas heating and loading the vast majority of policy costs onto electricity. Second, it shows that even with a technology as mature as the heat pump, disruptive innovation from outsiders is possible and emerging (and not just in the technology, we are also seeing it in business models with companies like Swedish-import Aira and Fornax, who are offering a zero up-front cost heat pumps). Third, it underlines the need to understand technologies suitable for local conditions when thinking about how to decarbonise the particulars of the building stock, which vary so much between areas (which is why the Catapult has pioneered Local Area Energy Planning). Finally, it underlines the importance of migrating to a policy framework which is technology neutral (while being generous in support of early-stage technologies), not picking favoured technologies (and a very welcome step forward on that from Government recently). More on that in future Substacks…

We will only be able to decarbonise heating - perhaps the hardest challenge on the way to net zero - if we are able to find products and services that people love, that are better than the current boiler market. Nusku are part of a cohort of British innovators trying to make that essential ambition a reality.