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Janet Richardson

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Updated on

Feb 13, 2024

Read Time : 10 Minutes

How much does a Heat Pump cost to install and run

The UK government is on a big drive to push heat pump technologies. They plan to phase out traditional boilers by 2035. So, now is not only a good time to ask if a heat pump is right for you, it may also be the last chance to take advantage of a generous financial subsidy to make the switch.

The costs of heat pump systems can vary significantly between system size, manufacturer and type. This guide will cover all the financial considerations for Air Source Heat Pumps and Ground Source Heat Pump systems.  

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How much does a heat pump cost?

Initially, you're probably wondering how they can save you money since heat pumps require electricity in order to operate which is three times more expensive than gas. We've all heard that heat pumps are efficient but what does this mean? A simple calculation could be, 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 £1020 (assuming an electricity unit cost of 34p/kWh).

Unfortunately though, it isn't quite that easy because heat pumps are unique in the way they heat a property. Heat pumps are generally designed to operate at a low temperature, to create an ambient heat that warms the house through like a thermal store, to be on most of the time. So, the simple cost per unit figures don't really apply. 

Things to consider that could effect the costs of installer a heat pump. 

  • The type of heat pump you’re planning to install
  • How much research you put in and how shrewd your negotiating skills are
  • Potential grants and incentives
  • Whether you need to upgrade your central heating system
  • Whether you need to install or replace your hot water cylinder
  • If you want your domestic hot water (DHW) on a seperate system
  • The size of your home
  • Any insulation improvements needed
  • The brand you want to go with
  • The cost of electricity


It's worth mentioning at this point that although heat pumps are deisgned to create an ambient temperature, a heat pump will be able to heat your property up to 18-20 degrees celsius throughout the year, providing it is installed correctly and the property is insulated to a sufficient level. A qualified heating engineer will need to visit your property and perform a heat/loss survey to ascertain its suitibility. You can search our directory of approved installers by clicking on this link

In some cases your central heating system will need adjusting. Single radiators or small doubles may need to be changed out in the main living areas and the pipework must be 15mm not microbore unless you are going for a high temperature or hybrid system. Wet under floor heating is optimal but not essential.  

anywa, let’s consider the two most common heat pump variants, air-source and ground source. 

Air-source heat pumps  

In the UK, air-sourced heat pump systems are the most common type of installation, and the number is on the rise. Because they don’t need same the prep, space, or permissions as ground-based systems the prices are better.  As a VERY rough guide, you can expect to pay somewhere between £8,000, to £15,000, before grants, depending on how complex the installation is.  This variable equates to stuff like access, scaffolding, the size of your property, whether you’re using existing pipe work, changes to the existing central heating system and even how hi-tech your fans and pumps are. You may even need to install a full new central heating system if for example, your property is heated by electric storage heaters. 

While there aren’t ‘high street’ brands in the heat pump world, there are various options for pumps. It all depends on how quiet, inobtrusive, or efficient you want the guts of the system to be. Obviously, high efficiency, near silent pumps will set you back more than anything off the shelf. Other factors like the size of your property will also matter. More rooms mean more pipe work, radiators, plus more powerful pumps, compressors and the like and more stuff means more cash. 

You will also need to consider your domestic hot water supply. Is your current cylinder or tank compatible with the heat pump or does it need to be changed out? Heat pumps can't provide domestic hot water quickly in some instances, considering a immersion boiler for DHW may be the best option. 

Air source heat pump for the average three or four bedroom house.

  • Low estimate £7000-9000
  • Mid estimate £9000-13,000
  • High estimate £13,000-16,000


If you want a super quiet Samsung heat pump or something similar, then you can add a few hundred pounds to the overall price. As a rule, when considering our guide, you can assume the following:

  • The low estimate has little to zero additional features.
  • The mid-price estimate has a few potential upgrades.
  • The high estimate includes all the bells and whistles.  


If you do need to add these, expect to pay the following:

  • Adding more radiators £2000-3000
  • Replacing all the existing pipes and reboring the holes £2000


How much do high-temp air source heat pumps cost?

Once again, the actual price will vary depending on the size and location of your homes. How much research you do, and your negotiation skills will also play a part in the price. While there may still be grants and subsidies in your area for such an installation you may find those opportunities are harder to find. Still an average UK household will pay between £8000 and £13,000 for a high-temperature air source heat pump installation. 

As above, it’s worth considering some home improvements to make the most from your system. The same options apply, and the prices will be the same. That said, using a high-temperature air pump system will likely mean there’s less need to install insulation.

How long will an Installation take?

Like an air source heat pump, installing a high-temperature heat pump system can take between two to three days. And don’t forget, while the installation takes place you’ll be without heat and hot water. 
 

Ground-source heat pumps

While not as common as air-source heat pumps, ground-source or geothermal heat pumps are the UK’s second most popular heat pump. The real reason they’re not number one is the extra cost. Ground source heat pumps require the same infrastructure as their air-source cousins and a whole other underground array. It’s this subterranean network and the effort it takes to lay it that means geothermal systems cost upwards of £20,000. Some larger systems can cost three times that price too. 

Now, the good news is a bit of research can really help you negotiate a decent price and help you find some financial assistance. So, the second two factors are somewhat related. We have dedicated pages to help you find grants and funding for all manner of renewable energy projects including Heat pumps so be sure to check them out. Plus we cover a lot of this below. 

On the bright side, let’s look at the savings you can expect from your new system. Now, at first glance you won’t see a vast difference in the costs of a heat pump versus a traditional gas boiler. However, if you can remove the need for your gas standing order and better yet, run your heat pump from your own solar power then the savings start to rocket. Removing the gas standing order alone will save you £297 a year.

A large part of the initial costs for a Ground Source Heat Pump can be the ground works. As renewable heating engineers are specialist professionals, it can sometimes save money to hire a ground works company seperately, under the direction of your selected installation company. In the case of bore hole based systems, get a few quotes. Bore holes usually cost around £5,000 per hole and you generally need three of them, so that's a big part of the upfront costs. 

GSHP's are widely considered the most efficient heating systems out there, the running costs are generally lower than any other option on the market and for larger homes or businesses, GSHP's can be the best over-all solution. 

Ground source heat pump for the average three to four bedroom house:

Horizontal matrix

  • Low estimate £18,000-20,000 
  • Mid estimate £20,000-25,000
  • High estimate £25,000-35,000


Bore hole solution

  • Low estimate £20,000-25,000 
  • Mid estimate £25,000-30,000
  • High estimate £30,000-40,000
     

How long will an Installation take?

Ground source heat pump systems are quite the undertaking. Unlike the other systems they involve a lengthy process. This can take anywhere from 20 to 30 days depending on access and the size of the installation. As most of the time involves laying the groundworks, the amount of time you’ll be without heating may be shorter than the other installations. 

As with the other systems, it’s worth considering some home improvements to make the most from your system. In particular, insulation is a good investment since ground source heat pumps work better in well-insulated homes. 

You can always give us a call on 01392 693 900 to discuss your requirements in more detail. 

Thermal battery or hot water cylinder

Unlike traditional central heating, air source heat pumps don’t provide instant hot water. If you feel this is a deal-breaker you may want to invest in some thermal storage. A hot water cylinder is the cheapest option and should set you back around £700. Meanwhile, complete thermal storage units come in anywhere between £2000 to £3000. 

Your current hot water cylinder may be compatible and it's worth noting that most heat pump quotes will include a domestic hot water solution or hot water cylinder. 

Insulation

It’s a no-brainer that insulated houses are easier and cheaper to heat. Heat pumps are not combustion boielrs, they are designed to operate at a lower temperature in order to create an ambient heat that heats your house through and keeps it warm. Due to this the property has to have a certian level of energy efficiency.

To start with, you will definitely need the property to have double glazing or some pretty good secondary glazing. Prices for doubel glazing vary dramatically so make sure you shop around. 

Secondly, ensure your loft is well insulated. This is the cheapest and most effective measure you can take to improve the energy efficiency of your home anyway and is well worth doing. Loft insulation can cost as little as £400.

Insulating walls can be a bit trickier. If there's a cavity then get a good insulation company in to quote. Alternatively, if you are worried about damp, book in a chartered surveyor to provide a unbias appraisal. Internal or external wall insulation is an option if there's no cavity walls, both effective options but it does get a bit complicated. We have a whole section on insulation here.  

If you need additional insulation, you can add the following costs: 

  • Wall cavity insulation £1500.
  • Upgraded floor insulation £3000.
  • Roof insulation (by roll) £2000.
     

In order to recieve the government's Boiler Upgrade Scheme you will need an Energy Performance Certificate (EPC). These are usually only carried out when you're thinking of selling your house and cost around £80-120. You can find an EPC asssessor by searching online. An EPC will tell you what energy efficiency measures you can take to improve your home. To recieve the BUS you will have to have no advisories for cavity insulation or loft insulation. This means that if there is a cavity, you will need to have it filled (unless you can prove it isn't beneficial) and if there's less than 200mm loft insulation, it will have to be topped up. Current building regs for loft insulation is 300mm. 

Heat pump grants

The UK government, like most UN countries, has pledged to achieve NET ZERO carbon emissions by 2050. In their quest, the government has spotted the potential heat pumps offer to reduce national emissions. The upshot of this is a huge nationwide drive to promote heat pump technology. To get the ball rolling, they’ve introduced sweeping incentives, subsidies, and grants across both the domestic and commercial sectors. Today we’ll focus on the schemes aimed at the domestic market.  

Boiler Upgrade Scheme (BUS)

Eligible households in the UK can now apply for grants of £7500 to replace an existing electric, mains gas, LPG or oil boiler for a heat pump system or a biomass boiler. 

The BUS grant is limited to one per property and householders can claim either £7500 for an air source heat pump, £7500 for a ground source heat pump (this includes water source heat pumps or heat pumps that share a ground loop), or £7500 for a biomass boiler. 

  • Air source heat pump - £7500
  • Ground source heat pump (including water source) - £7500
     

Only true heat pump systems are eligible for grants. So, be careful if you choose a hybrid heat pump system that also has a gas boiler as it won’t count. 

Other criteria include minimum efficiency standards and there’s a cap on systems with a capacity over 45kWth. You’ll also need a current Energy Performance Certificate (EPC) that meets certain criteria. When in doubt ask your supplier. 

BUS is available for both domestic and non-domestic properties, but there are some exclusions. Social housing properties don’t count and neither do new builds (Unless it's a self build). There are also some restrictions on properties receiving other energy support. For example, properties that benefited from the Government’s Energy Comiment Obligation ECO funding. 

The grant is now the same £7500 if you live in Scotland, where the program is called Warmer Homes Scotland. There are also additional funds of up to £9000 total available for those living in particularly rural areas. Scottish residents can also apply for interest free loans to cover the entire cost of an installation. The cap on these loans is £15000.  

ECO4 

Now in its fourth iteration, the Government’s Energy Commitment Obligation (ECO4) provides assistance for low-income families and those in living in homes with poor energy efficiency. To qualify for the program, you’ll need to earn under £31,000 a year and be in receipt of one of the following benefits. 

  • Income-based Job Seekers Allowance
  • Working Tax Credit
  • Child Tax Credit
  • Pension Credit Savings Credit
  • Child Benefit 
  • Universal Credit
  • Housing Benefit
  • Income-related Employment and Support Allowance
  • Income Support
  • Pension Credit Guarantee Credit


In addition to the above criteria, you’ll need to live in a house with an EPC rating of E (sometimes D) or lower. 
If you qualify, the Government will instruct an energy provider to upgrade your heating system. This can include installing a new heat pump system. Unlike other schemes there is no cash payout, the authorities deal directly with the energy provider.   

HUG2

The Home Upgrade Grant is a local authority provided scheme to help households with poor energy efficiency, low-incomes, or inaccessible locations.  The funding comes from central government, but it’s up to your local council how to implement it.  Because the cash is distributed on an ad hoc basis there’s no clear rules about how much is available, but as a guide it’s not uncommon for households to pick up anything from £10000 to £25000 depending on the project. As the Home Upgrade Grant is squarely aimed at energy efficiency there’s a good chance they’ll cover the installation of a heat pump.   

Finance options for Heat Pumps

A factor to consider when pricing your system is the cost of any credit payments you’ll need to make.  Obviously, if you have the money, you can ignore credit and any subsequent costs. Sure, you may find some suppliers offering interest free payments. Even with this option though, you may lose some capital to inflation. 

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. 

Let’s talk about efficiency and running costs

So, this is going to get weird. Before we start let’s consider that a traditional gas boiler operates at a 90/95% efficiency.  However, even an air source heat pump system is up to 300% MORE efficient than a gas boiler. If this sounds confusing, fasten your seat belt. Because despite being three times more efficient than traditional central heating, the savings from using a heat pump system, can appear negligible due to the fact that gas is cheaper by the unit than electricity. 

What about ground source heat pumps?

With air source systems offering up to 300% more efficiency than fossil fuel boilers what can ground source systems do? You might want to sit down for this. Ground source heat pumps often operate at 400% of the efficiency of traditional boilers. Making them four times as efficient. However, it may surprise you to know that even at those levels of efficiency, you might not see much of a return on investment if you're replacing a modern efficient gas boiler. 

That said, if you're replacing an old inefficent gas boiler, an electric boiler, oil boiler or an LPG boiler then the savings on your energy bills can be high. 

The infographic below shows the average potential savings of an ASHP and GSHP against traditional boilers. 


So, will heat pumps save you money?

Replacing a modern gas boiler there will be a slight reduction in your annual bill just by using a heat pump. On the average bill, you can expect to see a saving of around £50 a year. However, if you can remove gas altogether, you can also save another £300 from your annual gas standing order. Remember though, it’s not all about cash. Sure, it’s nice to save some money and heat pumps create an ambient heat which is more comfortable and arguably healthier for you, but where heat pumps really excel is in the reduction of emissions. Heat pumps produce zero emissions and that’s a saving everyone can get behind. But why do they cost the same if heat pumps are more efficient? The reason is simple. Gas costs less per unit than the equivalent unit of electricity.

If you’ve done the maths, you’ll have worked out the difference equates to about three times less. Of course, there’s an obvious workaround and this is where heat pumps really start to make sense. Imagine for a second you could power your heat pump with electricity you generate yourself. Think about that for a moment, free electricity, and free central heating and all you need is a few solar panels to make it happen. To find out more about solar installation check out our guides here.

If you're replacing an electric boiler, oil boiler or LPG boiler then the return on investment for an ASHP or GSHP becomes much more attractive. The tech will often completely pay for itself over time. 

Contact us or one of our approved installers for further information or quotation. 

 

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