Heat Pump Cost
How much does a Heat Pump cost?
The costs of heat pump systems can vary significantly between system size, manufacturer and type, with the less effective air source pumps also costing less than the ground source variety. The table below gives you a rough idea of how much you can expect to pay for a heat pump system and its installation.
*It should be noted that under the Renewable Heat Premium Payment scheme, approved installations are eligible for a voucher of either £1300 (for air-source systems) or £2300 (for ground source systems) to offset the cost of installation.
Installations costs may be higher depending on your property’s specifications, such as, for example, if the installation requires the digging of a deep borehole for vertical tubing.
If you wish to make the best use of the heat pump and install under floor heating, this will cost around £2,000-£3,000, depending on the property. In order to be eligible for the Renewable Heat Premium Payment scheme, it may be necessary to improve your property’s insulation.
There are also running costs that must be considered, since the heat pumps require electricity in order to operate. This can be calculated using the system’s total efficiency and your property’s energy needs. Therefore, if you have a system efficiency of 3, in order to generate 9,000kWh of heat, you will require 3,000 units (kWh) of electricity a year, which will cost £450 (assuming an electricity unit cost of 15p/kWh).
The Renewable Heat Incentive for Heat Pumps
Renewable Heat Incentive (RHI) is a Department for Energy and Climate Change (DECC) initiative which allows those who choose to install renewable heat sources in their property to receive payment per kilowatt hour (kWh) of heat produced.
The RHI has two phases:
- Phase 1 - RHI payments for heat produced in non-domestic installations (i.e. those in businesses, industry and the public sector). This phase is currently in effect and is open for applications.
- Phase 2 - payments for heat produced by domestic installations, which the DECC plans to introduce in spring 2014.
The current tariffs for the non-domestic RHI are as follows:
The crrent tariff ranges (updated august 2nd 2013) for the domestic RHI are as follows:
In order to be eligible for RHI tariff payments, the property must satisfy the above conditions. Moreover, the installation must be carried out by a Microgeneration Certification Scheme (MCS) accredited installer, who will also install a generation meter.
NB. The RHI is not available for air-to-air heat pumps.
For more information on non-domestic RHI, see the energy regulator Ofgem’s website: http://www.ofgem.gov.uk/e-serve/RHI/Pages/RHI.aspx.
For information about the domestic RHI, see the DECC website: http://www.decc.gov.uk/en/content/cms/meeting_energy/renewable_ener/incentive/incentive.aspx.
 DECC tariff table for non-domestic RHI: https://www.gov.uk/renewableheatincentive/what-youll-get
 ‘Renewable Heat Incentive: Consultation on proposals for a domestic scheme’, Department for Energy and Climate Change, p. 54. Available at http://www.decc.gov.uk/assets/decc/11/consultation/RHI/6453-rhi-consultation-domestic.pdf
Renewable Heat Premium Payment
The Renewable Heat Premium Payment (RHPP) is a Department for Energy and Climate Change (DECC) initiative which aims to support those thinking of installing a renewable energy technology on their property. The RHPP is designed to provide support for homeowners until the domestic Renewable Heat Incentive (phase two) comes into effect in 2014.
The RHPP is a one-off payment (in voucher form) toward the cost of installing a renewable heat source. The current phase (phase 2) of the RHPP runs until March 2014.
Available is as follows:
- For air source (air to water only) heat pumps, you will receive a voucher of £1300
- Ground source heat pumps systems are eligible for a payment of £2300
In order to be eligible for RHPPs for heat pumps, your property must satisfy the following criteria:
- it must be owned by you, or if you are a tenant you must purchase the heat pump system yourself
- it must have 250mm loft insulation and, where feasible, cavity wall insulation
- if the property is a new build, then you must retain ownership of the property either as the occupier or as the Private Landlord. Please note applications from installers, builder/developers or householders in relation to “off-plan” developments, are not eligible for support under this scheme. Similarly, installations where the renewable heating system was installed prior to the first occupation of the property are also ineligible for the scheme
- its heating system must not currently be mains gas-powered (i.e. you must currently use oil, solid fuel, liquid gas or electricity)
- You must not have received any payment under RHPP phase 1.
- The heat pump itself must be installed by a Microgeneration Certification Scheme-accredited installer
NB. The Premium Payment is not available for air-to-air heat pumps.
If you have any further questions, please email these to [email protected]
For clarification on any matters relating to this scheme please click here.
Finance options for Heat Pumps
There are a number of companies offering finance for heat pump systems in the United Kingdom. Finance, in the form of loans and leasing agreements, is available for domestic, commercial and industrial installations, in both the private and public sectors. Finance for renewable energy technologies allows customers to avoid large upfront costs and make payments out of the income earned from Feed-in tariffs, as well as energy bill savings.
Finance may be offered on a range of bases, each offering varying levels of financial risk and reward, as well as varying interest rates. Typically the finance company will provide the renewable energy technology and the cost of installation in return for payments spread over a period of time. Depending on the type of agreement, the client may either come to own the technology at the end of the period, it may be sold by the company with the proceeds being split between client and company, or the company could retain it.
The arrangements offered by finance companies will vary, however, and each company will offer different advice. It is therefore advisable to obtain quotes and agreement terms from a range of companies, based on clients’ energy needs and financial situation. Caution should also be taken when calculating one’s ability to make repayments, as the returns offered by some renewable technologies depend in large part on the weather.
Look here for some UK companies offering finance for heat pump technology.
The Green Deal for Heat Pumps
--This Scheme has now been CLOSED by Government --
The Green Deal is a financial mechanism set up by the government to assist in covering the sizable initial outlay needed for many renewable energy systems and other green technologies. The initiative provides upfront cash at a percentage of the product and install cost, this amount is then recouped through a payment arrangement over a period of time. The repayment amount is worked out based on the savings you will be making on your energy bills through your new system. By this method you can have your technology installed and appreciate its specific benefits and not be paying any more than usual and quite often less than you were on your energy bills.
The Green Deal was launched in January 2013 and applies to both domestic and non-domestic sectors. It replaces current policies such as the Carbon Emissions Reduction Target (CERT) and the Community Energy Saving Programme (CESP).
Most types of Heat Pump system are applicable for approval but the system and site will need to be individually assessed before the green deal can be granted.
For further information we provide a full write up of the governments Green Deal Initiative. If you are interested in this scheme you can contact us and we will arrange for a Green Deal assessor to contact you to discuss your requirements.
Read more on The Green Deal Here.