At a gathering in the capital, Mr Kelly reported that following the merger of the De Dietrich Remeha Group and Baxi Group to create BDR Thermea for climate and hot water solutions, the company was cautiously optimistic about the future.
The heating industry, however, faced many unknown variables in 2011 and there were still many questions left unanswered by government.
With one of the lowest number of mortgage approvals expected next year, the merger of BSS into TP to be finalised and the Feed-in Tariff to be capped at £800m, the merchant sector was being assailed on all sides.
Government had to tell the heating sector up front if it was going to run out of money, said Mr Kelly, so that steps could be taken to prevent even more confusion in the year ahead.
Paul Rivett of Heatrae Sadia said the company had experienced good growth in October 2010 with sales of its unvented heating products up by 7% and commercial water heating products up by 2%. Heatrae was investing in new products and had a number of launches in the pipeline for the New Year.
"We are currently lobbying the UK government to begin a fundamental review of how SAP operates, and how it rewards innovation in the water heating industry," Mr Rivett said.
"Specifiers working on newbuild and refurbishment projects rely on the Government's SAP national domestic calculation tool to help them meet building regulations and standards. Like the majority of manufacturers supplying products for the newbuild industry, Heatrae Sadia is wholly dependent on SAP recognising its products are energy efficient," Mr Rivett added
"Where the energy efficiency of hot water cylinders is concerned, SAP as a default currently asks a specifier to input the insulation thickness of the proposed cylinder, and this figure is then used to calculate heat loss based upon general assumptions for levels of heat loss. The problem is, not only is the current system open to manipulation, but using insulation thickness alone to calculate heat loss does not take into account other innovations in product design which help to reduce energy demand.
"This means the heat loss figures SAP is providing are largely inaccurate, and in some cases are not as favourable as they should be," he stated.
Heatrae's £1m investment in the development of Megaflo eco – a hot water cylinder that provides greater thermal efficiency and reduces heat loss did not rely only on insulation thickness to achieve this, Mr Rivett pointed out. "Almost 30% less heat escapes from Megaflo eco than with the previous model."
He also said that Heatrae believes that encouraging manufacturers to use increasing amounts of insulation to improve their heat loss figures was not a sensible move.
"Taking this approach will increase product size, and with hot water cylinders typically being installed in airing cupboards, where space is already quite limited, it's not a viable solution.
"For the water heating industry, the way SAP currently calculates heat loss figures is a commercially critical matter. We are currently in discussions with the Department of Energy and Climate Change in order to highlight that SAP is currently stifling rather than rewarding innovation – and this calls into question the whole direction the water heating industry is taking to reduce carbon emissions and transform our energy markets."
The company has made it clear to government that any further investment made in relation to carbon reducing products could depend on a review of how SAP operates – and how it rewards the manufacturers of innovative products needed for a greener future."