More and more homeowners are talking about heat pumps across the United Kingdom, in large part because of an increased focus on sustainability and carbon reduction in homes. But are they worth it?

Installing a heat pump definitely has advantages. In addition to being greener technology, heat pumps are versatile and cost effective. According to the Energy Saving Trust, installing this type of system can save you anywhere between £435 and £1410 per year, compared to most heating systems found in homes.

Shifting to a heat pump from an electric heating system can save you up to £1130 per year.

Many people who are making the switch can benefit from government initiatives, such as the Renewable Heat Initiative Scheme. On the flip side, the price of installing heat pumps can be higher than what some consumers might expect. Older British homes sometimes need to be prepped to be more compatible with these heating systems. Issues like poor insulation, wrong-sized radiators and pipework, and inadequate space for pump and water cylinder installation need to be addressed.

For some homes, but not all, the costs of such improvements can add up. The good news is that new builds are being constructed for compatibility with systems that are more environmentally friendly, with these considerations taken into account under the Standard Assessment Procedure (SAP) calculations. For newer construction in many regions, radiators, insulation, and other key elements are designed and constructed to be compatible with heat pumps, simplifying their installation.

To give you a better idea of heat pump costs, here’s a deeper dive into how much it takes to install and run air and ground source heat pumps.

How much do air source heat pumps cost? 

Air source heat pumps can operate via air-to-air or air-to-water processes. They function based on different mechanisms, with air-to-water models transferring heat from the outdoors to the water used indoors. The transferred heat is then passed to underfloor heating to warm your living spaces.  

If fitting a radiator or installing underfloor heating is not practical, then having an air-to-air heat pump installed might be the right solution for you. Before selecting these systems, consider whether you have adequate unshaded space for placing the outdoor module. You’ll also need to check whether your home can accommodate the indoor devices, such as a large water cylinder.

Initial Installation costs

• Property size
• Nature of the property (new or existing)
• Heat pump size
• The existing heating system
• Amount of preparation needed to install the heat pump. For instance, will you have a new radiator fitted? Underfloor heating installed? If yes, you can expect the price to increase by £2,000 to £4,000.

The typical cost ranges between £7,000 and £13,000, including labour expenses and the cost of extra work. To install an air-to-water system costs around £8,000 - £18,000. (Whereas an air-to-air system is £1,500 - £3,500.) The differences can be attributed to heat pumps of varying sizes, strengths, and performance.

To find out the actual cost of installing an air source heat pump, you may choose to contact an MCS-certified installer. Someone who is MCS-certified can accurately conduct an initial survey, determine whether your house is suitable for an air heat pump installation, and calculate the cost by factoring in all the expenses. It's best to get a quote from at least three installers to get a clearer picture of the likely installation costs. Be aware that some installers may charge you for this initial survey, but often, this service is free.

Auxiliary installation costs

The installation process is often done in tandem with other home improvements to increase heating efficiency and keep the cost down.

Such improvements may include:

• Installing home insulation to reduce your heating requirements
• Draught-proofing to reduce heat loss from uncontrolled ventilation
• Fitting a new radiator with a larger heat-emitting surface area (which could cost around £2,000 - £4,000)
• Installing underfloor heating
• Changing the hot water cylinder to one that’s compatible with the air source heat pump

Running costs

Most air source heat pumps have a Seasonal Coefficient of Performance (SCoP) of 2-4. The value is usually 3.2 when the outside temperature is 7°C. And in the UK, the temperature varies between 5°C and 8°C.

In layman terms: the seasonal coefficient of performance is the number of kilowatts of heat generated by every kilowatt of electricity consumed. So if the SCoP is 4, the heat pump can produce four kilowatts of heat energy for every kilowatt of electricity consumed.

So how much will a heat pump cost to run? Let's do some maths.

Government data has it that an average UK resident consumes 12,176KWh for heating purposes per year. And as noted, an efficient air source heat pump produces 3.2-4 kilowatts of heat energy for every kilowatt of electricity consumed. So if the heat pump (of SCoP 4) is the sole heating system, you’ll need to consume 3,044kWh of electricity to produce the required heat (12,176 kWh) per year. Electricity costs around 20.8p per kilowatt-hour.

The annual cost for heating your home purely through a heat pump is £1,248.

When you compare the running cost of an air heat pump with other heating systems – LPG boiler, oil boiler, or even an electric heater that consumes 3-4X more electricity than a heat pump – the savings are clear. Generally, the running cost of an air source heat pump depends on multiple factors, including:

• Outside temperature
• Cost of electricity
• Heat pump seasonal efficiency (SCoP)
• Level of heat needed for a home or building
• Size of the heat pump
• RHI tariffs

While running costs are an inevitable aspect of a heat pump or any utility device, you can influence and reduce the running cost by doing the following:

1. Shopping around for cheaper tariffs (Ofgem estimates you can save up to £250 per year by selecting less expensive electricity tariffs).
2. Timing the heating system to turn off during off-peak periods (which can save up to 50% of the total running costs).
3. Generating your electricity using wind and solar-powered systems (which can raise the heat pump’s SCoP to 7 or more).
4. Adequately insulating your home including your roof, floors, and walls.
5. Draught proofing to prevent unnecessary heat loss through ventilation.
6. Hiring an MCS-certified installer to design and install the heating system to operate at peak efficiency.

Many have been able to save with a heat pump through the government’s Renewable Heat Incentive (RHI). This government grant was established in April 2014 to help meet environmental goals through the help of domestic adopters of renewable energy. Learn what incentives are available today to help you save money. In particular, check out the Clean Heat Grant.

Air source renewable heat incentive grants

In the past, installing an air source heat pump made individuals eligible for an RHI tariff of 10.92 pennies per kilowatt-hour. (Note: The RHI payments may differ if using the heat pump for non-domestic purposes.)

So if you need 12,176kWh for space heating and domestic hot water per year, and you have installed an air-to-water heat pump with a seasonal Cop of 4, your RHI payments would have equaled 10.92 x (12,176 – 12176/4 the amount of electrical energy consumed per year to meet the heat demand) = £997 per year, or £6,981 during the stipulated 7-year period.

While the RHI incentive expired on 31 March 2022 without renewal, its conclusion ushered in the era of the Boiler Upgrade Scheme, also referred to as the Clean Heat Grant, on 1 April 2022. In the new scheme, homeowners based in Wales and England are entitled to £5,000 off from their installation costs.

Another government grant is the 5% VAT reduction on air source heat pumps (and other energy-saving products). However, it’s only available to citizens who receive the income of disability benefits and are aged 60 and above.

Maintenance costs

As with any system, an air source heat pump needs proper maintenance to work efficiently. Fortunately, it's relatively easy to maintain. The warranty can last for ten or so years, with an option to extend the same at an affordable fee. And with regular maintenance, the heat pump can last for over 15 years. A typical maintenance schedule involves visual inspection of external pipes, water pumps, fittings, and electronics.

You should also sweep away any contaminants on the fans and clean the filters regularly. (Fortunately, all that’s free of charge as you can do it yourself.). In addition, you should have the heat pump serviced by an MCS-certified professional every 2-3 years to keep every part working at peak efficiency. This service can cost you nearly £150 per visit, but you can always negotiate with your installer for a cheaper rate.

Getting a cover for the outside unit – to safeguard it against extreme weather conditions – can help minimise repair costs. But it also comes at an extra cost: £20+. For best results, ask your installer to detail all the maintenance checks you should conduct to gauge whether the system is working properly. And keep the heating system compliant with all the warranty requirements.

Saving versus costs

The realised savings upon installing an air source heat pump will largely depend on:

• Your electricity tariff
• The existing heating system
• Your location and the average air temperature throughout the year
• Efficiency of the heat pump system
• Central heating system design

How much does a ground source heat pump cost?

In a ground source heat pump, water is mixed with an antifreeze solution and pumped around the ground trenches to absorb the low-grade heat stored underground. This heat pump leverages the expansion and compression technology to extract, amplify, and deliver the right temperature to the desired space.

The amount of heat collected varies with the soil type – for instance, clay has a higher heat retention capacity than sand. It also depends on the size of the available unshaded land. Generally, a ground source heat pump is for you if your budget allows it and if your garden is large enough (you need 50m² for a kilowatt output) and suitable for housing the ground loop system. This ground loop system is placed in trenches that are 2m in depth in a large garden, or 100m boreholes in case of space constraints.  

Hence, you’ll need a good installer who can:

• Accurately calculate your home heat demand to determine the size of the ground source heat pump.
• Determine if there's adequate space for a horizontal ground loop array or whether a vertical arrangement will be viable.
• Investigate the type of soil available, and gauge whether it's suitable for a heat pump installation.

Let’s break down the ground source heat pump costs.

Initial installation costs

Initial installation costs vary according to: 

• Brand, model, type, and size of the ground source heat pump
• Ground access availability
• How new the property is
• Required improvements, i.e., fitting a new radiator, installing underfloor heating, or draught-proofing

Typical installation costs range between £18,000 and £25,000, but you can get the best deal by comparing as many quotes as possible.

You may or may not face added costs, such as those related to repairing any disruption to the building’s fabric, removing the existing boiler, and in the case of LPG or oil boilers, removing the fuel tank, fuel pipework, and concrete base. Installing a ground source heat pump is generally accompanied by additional costs such as:

• Digging up the garden (either boreholes or trenches)
• Special equipment to lay underground pipes vertically
• The complexity of the digging and installation processes
• Premium quality components to withstand underground conditions (think expensive alloys used to build metal cases)
• Complex onboard software for monitoring aspects of the heat pump operations

The price of such a heat pump includes the following: Digging horizontal trenches (when installing the system horizontally) for about £2,500-£4,500. Digging a vertical borehole (when installing the system vertically) for about £8,000-£10,000.

When installing the system vertically, the cost may vary depending on several factors, including the number of boreholes, the depth and diameter of the boreholes, the borehole fitting materials, as well as the underlying hydrology and geology of the site. When it comes to depth, for instance, it typically costs £100 per meter deep and demands 10m for every kilowatt.

Running costs

Ground source heat pumps are more efficient than their air-source counterparts. That's because the heat from the ground is absorbed into the water, which has a better heat holding capacity than air. These heating systems also boast consistent temperatures throughout the year.

Their SCoP lies between 320% and 420%. And according to estimates, a heat pump with a SCoP of 4.1 (410%) has a running cost of £3.99 per kilowatt-hour, compared to an LPG boiler that stands at £7.57 per kilowatt-hour, an oil boiler at £5.06 kilowatt-hour, and an air source heat pump at £4.19 per kilowatt-hour. Just as with its air source counterpart, you can boost its efficiency and consequently lower the running costs. You can also save money if you qualify for government grants.

Ground source renewable incentive heat grants

If you had been able to use the RHI incentive when you installed a ground source heat pump, you could have received an RHI payment of 21.16p per kilowatt of heat generated. (Note, the payment could vary with the size and type of the installed heat pump.)

So if you need 12,176kWh for space heating and domestic hot water per year, and you have installed a ground source heat pump with a seasonal Cop of 4, RHI benefits would have resulted in savings.

RHI participants are seeing up to £5,000 and more off their heat pump upgrade through April 2025

For those who had applied on time, RHI payments would equal 21.16 x (12,176kWh – 12176/4kWh the electrical energy consumed to produce the needed heat energy) = £1,932 per year, or £13,526 for the stipulated 7-year period.

If you were not able to take part in the RHI program, you may want to look into the Boiler Upgrade Scheme. With this, a homeowner will be granted £6,000 when installing a ground source heat pump. This scheme runs between 2022 and 2025.

Maintenance costs

Once a ground source heat pump is installed, it requires little maintenance. Besides visually inspecting the pump's fittings and electronics, you should re-pressure or have an MCS-certified professional check the quality of the antifreeze every 2-3 years.

As noted with the air source heat pump, you should have the installer detail all the maintenance checks you should carry out. And keep the system compliant with the warranty requirements. According to the United Kingdom’s Energy Saving Trust, the realised savings will depend on:

• Existing heating system
• Cost of fuel (coal, electricity, other) you’re replacing
• Type of ground source heat pump installed (horizontal or vertical)
• How well you maintain and operate the heat pump

In conclusion, the cost of heat pumps is a tad on the high end for some people. But it helps to understand the contributing factors as discussed herewith. If you're looking to purchase a heat pump, you can use our match-making tool to receive up to 4 quotes from credible installers.