AAON Boilers  (10)

With the UK committed to reducing greenhouse gas emissions to zero by 2050, drastic action is needed by the government. For new-build homes, there’s a gas boiler ban coming in less than five years’ time. And for older properties, it’s likely that gas prices will continue to rise, to encourage homeowners to switch to a more sustainable alternative. Renewable heating market With this in mind, the renewable heating market is growing rapidly, albeit from a very small base – but with targets in place to keep the momentum up. The government has committed to install 600,000 heat pumps into new homes by 2028. The government has committed to install 600,000 heat pumps into new homes by 2028 People who are already living in (old and new) properties heated by renewable technology should be applauded for pioneering it – but understandably, not everyone has the confidence to give up a solution they’re familiar with, and to step into the relative unknown. And that’s why the value of transitional technologies cannot be over-estimated– both to homeowners who want to live more sustainably and to installers looking to adapt and future-proof their businesses. But the role that hybrid heat pumps can play in accelerating progress on the road to zero has been somewhat overlooked to date. Hybrid heat pumps Hybrid heat pumps combine the power of a heat pump with the familiarity of a high-efficiency boiler. The two appliances work together to provide heating and hot water, providing the ideal replacement for a combi boiler as a first step towards introducing renewable heating technology into the home. Compared to a traditional gas boiler, hybrid heat pump systems can reduce CO2 emissions by as much as 55% and have been proven to deliver up to a 50% reduction in energy bills in homes in the UK. Our Daikin Altherma hybrid heat pump’s smart programming helps to save up to 35% more energy than a traditional condensing boiler by automatically determining the most economically and energy-efficient operating combination based on energy prices, outdoor temperatures, and indoor heat capacity. Heat pump share The hybrid system’s operating mode can be shifted to more electric heat pump share As well as being quick to install, hybrid systems are designed to look and operate like a conventional boiler system and deliver like-for-like performance and comfort levels. And to give homeowners peace of mind, the heat pump can act as a back-up for the boiler, and vice-versa – meaning they’ll never be caught short. Hybrid systems are best-suited to smaller homes in urban areas, that are likely to have a combi-boiler, and where the shell of the building is not energy-efficient enough to rely on electricity alone. But as the efficiency of the building is improved and upgraded over time, the hybrid system’s operating mode can be shifted to more electric heat pump share. And while there’s a lot of talk about new homes in the renewable heating debate, hybrid technology is ideal for renovations and boiler replacements. Heating system replacements We estimate that there are 1.1 million homes across the country that would be well-served by a hybrid system. That, combined with the benefits of hybrids for both installers and consumers, is why we firmly believe in hybrid heat pumps’ potential to support a faster, easier, and more affordable transition to low carbon heating in this country. Every homeowner who buys a Daikin Altherma hybrid system gets a high-efficiency boiler for free When consumers are looking at heating system replacements, we know that complexity and disruption are barriers to purchase. Fortunately, neither is an issue with hybrids. While hybrid heat pump systems can be installed with a household’s existing boiler, to help increase uptake, we’re running a special offer at the moment whereby every homeowner who buys a Daikin Altherma hybrid system gets a brand-new, high-efficiency boiler for free. Low carbon technology And there’s no need to lose valuable floor space to a hot water cylinder or to make changes to the radiators. Hybrids aren’t just good news for homeowners; they represent a real opportunity for installers, too. At the moment, there are 1,000 heat pump installers in the UK and around 125,000 gas boiler installers. We need to transition these boiler installers towards low carbon technology – not just to drive progress on the road to net zero, but to help their businesses stay relevant and competitive. This year, in partnership with 11 of our Daikin Sustainable Home Centres across the UK, we’re running a free nationwide training program to help installers enter the renewable heating market with hybrid heat pumps. eco-Friendly hybrid solution Reducing electricity prices isn’t enough to encourage people to change the way they heat their homes Installers who complete the day-long course can expand their portfolio and gain the skills to upgrade customers to an eco-friendly hybrid solution. Reducing electricity prices isn’t enough to encourage people to change the way they heat their homes; more needs to be done to make new, clean technologies accessible and appealing. We’re doing what we can to incentivize homeowners – and installers – to embrace the possibilities of a hybrid heat pump system, but a clear funding mechanism from Government is needed as well, specifically to help with the upfront cost of upgrading (free boiler or no free boiler). While the now-closed Green Homes Grant explicitly included hybrid heat pump technology, there’s a big question as to whether the same hybrid solutions will be included in the Clean Heat Grant – the details of which are expected later this year. The answer to that question needs to be ‘yes’.

The energy transition is upon us and we are shifting today’s energy use to low and zero carbon sources. The way in which we heat and provide hot water to our homes and businesses will change, and we are developing technologies that will support this transition. A bold and pragmatic policy framework will encourage investment and drive change. BEIS Hydrogen Strategy We, therefore, welcome the publication of the Hydrogen Strategy from the Department for Business, Energy & Industrial Strategy (BEIS). This important document details the role and vision for clean hydrogen deployment at scale, in the United Kingdom, building upon the ambitions in last year’s 10 Point Plan for a Green Industrial Revolution. As an energy carrier, hydrogen has many uses that will help to decarbonize heating, transport and industry. We, therefore, welcome the government’s assurance to the public that hydrogen can be made as safe as natural gas. UK Government’s Contract for Difference The availability of low-cost hydrogen at scale is a key enabler of the deployment of hydrogen for heat Alongside the BEIS Strategy, the UK Government is publishing its proposed business model for supporting hydrogen production, in the form of a Contract for Difference. This approach has been utilized successfully for offshore wind and will enable the sector to invest in early-stage projects, and reduce the cost of hydrogen. The availability of low-cost hydrogen at scale is a key enabler of the deployment of hydrogen for heat. We believe, there is no ‘one size fits all’ solution, and a whole range of heating technologies will need to be deployed for a range of properties. Baxi Heating, as part of BDR Thermea Group, is at the forefront of developing clean heating solutions, including our ground-breaking development of hydrogen boilers. Hydrogen-ready boilers from 2025 Our work with the Hy4Heat project and associated demonstration sites in the UK show technical feasibility of this solution. We believe the government should act upon advice from the Climate Change Committee and other sources advocating a mandate that all boiler sales from 2025 should be hydrogen-ready, in order to help pre-populate a swathe of the housing stock, ready for a future conversion. Technology, energy efficiency and business models are all bit parts in the wider picture. Skilled installers and contractors will be utterly essential to success, so we are glad to see the announcement of a hydrogen sector development action plan in early 2022, setting out how the government will support companies to secure supply chain opportunities, skills and jobs in hydrogen. UK Heat and Buildings Strategy Following the Hydrogen Strategy, we look forward to several important publications in the lead up to the 26th UN Climate Change Conference of the Parties (COP26), including consultations on the role for hydrogen-ready appliances, off gas grid heating measures and the UK Heat and Buildings Strategy.

In 2019, the UK became the first major economy in the world to pass laws to end its contribution to global warming by 2050 - a landmark moment on the road to net zero. To meet that target, owners and managers of commercial buildings are increasingly facing more standards, regulations, and legislation to promote carbon reduction. This may pose challenges when it comes to investing in building service technologies, but the net-zero goal also provides an opportunity to embrace new approaches to the design and operation of commercial buildings. Heat commercial buildings When we look at reducing the carbon impact of a building, heating is an important factor to consider. Heating and hot water are significant contributors to a building’s carbon emissions. In fact, they create nearly a third (32%) of the total carbon emissions in the UK. Luckily, the technology to heat commercial buildings in a more energy-efficient, renewable way is already out there - in the form of heat pumps. There is legislation focused on the provision of heat to commercial buildings that need to be considered So, what benefits can heat pumps offer, and how can building managers be sure that they are the right solution for a commercial space? There are already regulations in place to help reach net-zero – from the Climate Change Act in 2008 to the Green Growth Strategy in 2017. More specifically, there is legislation focused on the provision of heat to commercial buildings that need to be considered. Energy efficiency standards Part L of the Building Regulations states that non-domestic buildings should be moving to low-carbon heat sources, the minimum energy efficiency standards means it’s illegal to let any property with an EPC rating of less than band ‘E’, and the Non-Domestic RHI has been extended until 2022, in order to help overcome barriers to investing in renewable heating. There is also growing interest in embodied carbon in commercial buildings, and considering the amount of carbon produced by a building across its whole lifecycle, it’s important to understand the full environmental cost of the extraction, processing, manufacture, delivery, and assembly of every single product or material used. Conventional electric heating The government has already set a target of 600,000 heat pump installations per year by 2030 Needing to consider all of these factors may seem like a lot, but it serves to show that focusing on renewable heating now is the best way to future-proof commercial buildings for years to come. Heat pumps are central to reaching this decarbonized future, with the Carbon Trust finding that heat pumps have the potential to deliver CO2 savings of up to 70% compared to conventional electric heating, and up to 65% compared to an A-rated gas boiler. The government has already set a target of 600,000 heat pump installations per year by 2030, and the Committee on Climate Change estimates that 19 million heat pumps will need to be installed by 2050 to achieve the net-zero goal. Offering renewable heating To reach this goal, uptake needs to maintain momentum. As well as offering renewable heating, heat pumps allow for a reduction in running costs and increased efficiencies, and are increasingly becoming the first choice for building managers planning renovations - because they are designed for both retro-fit and new build, are easy to design and install, and are scalable to work with other systems. In the years since heat pumps first became available, the choice of heat pumps has expanded This means they’re a suitable solution for almost any space, and are even able to work alongside existing heating systems in a hybrid situation if required. A heat pump is an ideal solution for commercial buildings, it’s just a case of finding the right one for the job. In the years since heat pumps first became available, the choice of heat pumps has expanded, and building owners are now able to select exactly the right equipment for a building’s requirements. Combining residential homes For example, heat pumps can now work at higher temperatures, meaning they are a great option for spaces like hotels, hospitals, and leisure centers where there is a high demand for hot water at peak times – removing the need to use a gas boiler. This is also a compelling case for heat pumps in mixed-use buildings – which is a burgeoning space in the UK-built environment. Buildings which combine residential homes and commercial businesses have a wide variety of heating and cooling requirements within the same structure. Traditionally, this is where gas boilers, combined heat and power systems, or electric water heating would have come in. Heat pump installations Modern heat pumps can also be applied in buildings alongside other technologies Now, high-temperature heat pumps – like the 40kW Ecodan QAHV – can deliver hot water up to 90°C, helping businesses increase the efficiency of hot water production while slashing their carbon footprint. Other heat pumps can offer options for a modular approach, so that multiple devices can operate in one system. This means that the multiple-unit system can cascade available units on and off, to meet the required load of a building. It also means heat pump installations are scalable, and can work for a small doctor's surgery through to entire district heating projects. Modern heat pumps can also be applied in buildings alongside other technologies, and boost the renewable element of a project – reducing the requirement for heat energy. Commercial heat pumps Finally, to satisfy these needs without compromising on sustainability and the green imperative would have been challenging, before the advent of commercial heat pumps. Reaching net-zero and moving to renewable technology is now a priority for everyone. For building services professionals, there is a real opportunity to lead the way, and encourage clients to take a new approach to heating and hot water in commercial buildings. The heating equipment we install will be in a building for at least a decade, so installing a heating system based on fossil fuels might risk leaving the building as a ‘stranded asset’ in the future. Making the move to renewable heating will help ensure buildings are meeting efficient and environmental standards for years to come.

AAON, Inc. announced that it achieved Platinum level in the 2021 Sustainable Tulsa Scor3card verification program. This follows up the company’s achievements of Platinum in 2020, Gold in 2019 and Bronze in 2018. Platinum level requires completing more than 85 percent of eligible directives. The company reported on material topics in the areas of inclusion and diversity, community resilience, material management, energy, water, workplace health and safety and transportation.

AAON, Inc. announced that President and Chief Executive Officer, Gary Fields, and Chief Financial Officer, Rebecca Thompson, will speak at the 14th Annual Wolfe Research Global Transportation & Industrials Conference held virtually on Wednesday, May 26, 2021 at 9:10 a.m. EDT.

AAON, Inc., announced that its Board of Directors has declared the Company’s next regular semi-annual cash dividend of $0.19 per share (or $0.38 annually), payable on July 1, 2021 to stockholders of record as of the close of business on June 3, 2021. The Company also announced that its Board of Directors has promoted Christopher D. Eason to the position of Chief Accounting Officer, effective May 11, 2021.