Facing the future

Successful organisations need to move with the times if they are to remain relevant. David Adams looks at how the electrical industry might shape up over the coming years and where the opportunities lie

How might the day-today working life of the electrical contractor change in the future? In some ways, the job hasn’t changed a great deal in the past 25 years. If you took an electrician from 1990 to the present day, the main diff erences they would spot are the use of battery-powered tools and, of course, the smartphones now used by most contractors.

But these apparently superficial diff erences show how the job is already changing. NICEIC technical services manager Paul Collins, who began his career in 1990, thinks the rise of the smartphone is one of the most significant changes to have aff ected the industry during the past 30 years.

“Mobile phones have changed the way we do business,” he explains. “I

think in the short term, contractors will use mobile devices more – they will start using tablets on site, if they’re not doing so already. That means you can fill out forms, certifications and so on, on the tablet. There are devices now that allow you to take payment too. Over the next five years we’ll see more of a shift to electronic communications and transactions.”

Many contractors spend a lot of time testing installations and appliances today, but will that still be the case in 10 or 20 years’ time? Jim Wallace, technical standards and applications specialist at test equipment specialist Seaward, thinks it probably will, but not in quite the same way.

He points to the current trend for organisations of all kinds to move away from a ‘test everything’ mentality to approaches to testing and maintenance based on risk assessment, which are already informing the design of technologies being produced by companies such as Seaward, harnessing IT, digital photography and instant communications. “We’ve built risk-assessment tools into appliance testers, and users can take images with cameras built into test equipment to back up their findings,” says Wallace.

The spread of smart electronics and smart monitoring solutions will change the focus of testing to examining functional eff ectiveness rather than checking safety. In a growing number of cases, testing and diagnosis of any problems discovered might be completed from a remote location rather than on-site.

Changing needs

Research conducted by Certsure suggests likely future trends in domestic life in the UK that could drive demand for new products and services. There will be a growth in both the numbers of single-person households and of multi-generational households. Both trends will increase demand for monitoring and control devices for heating and lighting systems. Multi-generational households may also want more complex home entertainment and online connectivity facilities, to be used by individuals in diff erent parts of the home.

At the same time, internet of things (IoT) technologies, such as beaconing

6,000:

The number of charging devices for electric vehicles in 2016

devices that let appliances or other items in the home interact with smartphones, or intelligent monitoring equipment designed for purposes such as detecting water leaks, are developing quickly. More sophisticated security and fire alarm systems are being installed in a growing number of homes and multi-occupancy buildings.

Consumers are also getting more used to being able to control more aspects of their lives using their phones. Fewer than 10 per cent of the 1,500 respondents questioned for the Certsure research are currently controlling thermostats in their homes through a smartphone app, but almost 40 per cent said they were interested in doing so. It is likely we will see more legislation and changes to regulation encouraging more eff icient energy use in all types of buildings. “Smart homes and smart metering provide information about energy use, and the householder will need to be advised by someone as to how to reduce energy consumption,” says David Lewis, energy eff iciency marketing manager at technology company Schneider Electric. “The contractor is in a perfect position to do that and to provide services to monitor energy management.”

Similar technologies will also be in demand from other customers, such as commercial, industrial or public sector clients. “We’re going to see energy eff iciency high on the agenda,” says Lewis. “A contractor’s going to be implementing solutions and acting as a trusted advisor.”

Energy storage technologies will also develop significantly during the next few years. “At the moment, the financials are still a bit of a challenge, but the further we go down the

‘If a householder can generate, store and use their own energy, that’s a great opportunity for electricians’

40 per cent

of consumers are interested in using smartphones to control their heating

road, the cheaper these products will become,” says Collins. “If a householder can generate, store and use their own energy, that’s a great opportunity for electricians, for installation and maintenance.”

He acknowledges that after the boom in solar PV installations when feed-in-tariff s were more generous, this market, along with other renewables markets and microgeneration certification scheme (MCS) work, are all much more sluggish today. Nonetheless, he is sure that take-up of these technologies will increase, driven by changes to building regulations.

KDE managing director and founder Keith Darlington suggests that even though feed-in-tariff s have been cut substantially, falling manufacture, supply and installation costs for solar PV are likely to drive more demand in future. “Renewables is an area we need to keep our eye on as a company,” he says.

Smart technology

Contractors are also more likely to get involved in installing technology infrastructures to support more sophisticated home entertainment and home-working capabilities, even including smart cooking technologies in the kitchen. All these requirements will increase demand for more sophisticated, reliable technologies in the home – and contractors have the chance to create and maintain the electrical and electronic infrastructures upon which they will depend.

“It’s still wiring,” says Collins. “What contractors will need to look at is how to connect it and get it working. If they can do that they can then off er customers a one-stop-shop for everything including data networks, TV, audiovisual and so on. And on the back of that they can go into maintenance.”

There may also be more opportunities to help build and maintain the charging infrastructure required to support wider use of electric vehicles. Sales of electric vehicles, while still tiny compared with conventional vehicles, are growing fast: from around 4,000 in 2013 to 15,000 in 2014 and almost 30,000 in 2015, according to the Society of Motor Manufacturers and Traders.

As of April 2016, there were thought to be around 4,000 charging locations and 6,000 charging devices. That growth is impressive in the context of low fuel prices for conventional cars. With further government incentives to use electric cars likely to follow in

The industry in 2016

The electrical contracting industry today is worth £16.6 billion. There are more than 37,000 businesses in the sector, including over 27,000 NICEIC-registered contractors.

In June 2015 Certsure surveyed 1,300 companies in the electrical contracting industry. The research revealed an industry of small but well-established and profi table companies, run by experienced managers and electricians.

Almost eight out of 10 (79 per cent) had annual turnover below £500,000, with only nine per cent turning over more than £1 million, including 3.8 per cent with annual turnover of over £5 million. Almost nine out of 10 (88 per cent) have fewer than 10 staff and 53 per cent are sole traders.

Nearly four out of 10 companies (37.5 per cent) have been trading for more than 15 years; just over 15 per cent have been running between 10 and 15 years. Eight out of 10 of the individuals surveyed had more than 10 years’ experience as contractors under their belts, including 70 per cent who had been in the industry for over 15 years.

The research suggests growth in renewables and microgeneration work will continue to grow over the next two years, but slowly. Security-related services will grow slightly faster: the access control market by between 1.6 and 2.2 per cent over the next two years; and the CCTV market by between 2.5 and 3.3 per cent. Growth looks likely to be more impressive in fi re services – around 4.5 per cent over the next two years.

What may well be of interest to many contractors is the strong growth – of nine to 11 per cent a year – that is predicted over the next two years in the IT services market. With the sheer range of technologies being installed in homes, offi ces and other settings, and the need for all of them to be installed, integrated and managed eff ectively, some of that money will surely come into the electrical contracting market.

‘The householder will need to be advised by someone as to how to reduce energy consumption. The contractor is in a perfect position to do that’

future, opportunities for contractors will surely continue to grow.

Collins wonders if in future electric vans might become a vehicle of choice for electricians. He imagines contractors arriving on site with a tablet, or something similar, in hand, to commission and test installations, communicate with colleagues or access information as necessary, and to issue certifications and other documentation to clients. “It’s an exciting time, because changes in technology are moving so quickly,” he says.

If contractors are able to gain a good understanding of at least some of these technologies, new business opportunities will be there for the taking. Those opportunities, along with further developments in mobile and other technologies that allow contractors to work more eff iciently, should increase the chances of NICEIC contractors continuing to enjoy successful and rewarding careers for many decades.

» David Adams is a freelance business journalist