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Air Source Heat Pump Costs & Savings 2023

2023 may just be the year where heat pumps turn into a primary option for UK homeowners. It's success will depend on many factors however no doubt, costs will be the determining factor.

January 17, 2023

Air Source

What Is a Heat Pump?

A heat pump is an HVAC device designed to keep indoor spaces warm. It works by transferring heat energy from the outside air into its internal system and then releasing it within the home. Heat pumps are becoming increasingly popular for heating domestic properties due to their efficient, cost-effective performance. They can be used in combination with traditional systems or as an alternative standalone solution.

Air to Air vs. Air to Water Heat Pump: What's the Difference?

Within the general scope of air source heat pumps are two main subclasses of units: air-to-air and air-to-water. While they both perform the same function, each goes about doing so in a different way. Below is a breakdown of these two types, including an explanation of how they work, what they require and why homeowners buy them.

Air to Air Heat Pumps

Air-to-air heat pumps take warm air from the outside and move it indoors for heating purposes. Alternatively referred to as air conditioning, these units simply pump air from the outside into your home, effectively heating the space. They are usually powered using electricity and require no additional fuel source. As such, they can be relatively low-maintenance solutions for households looking to reduce their energy bills.

Air to Water Heat Pumps

Air-to-water heat pumps transfer heat from the outside air into hot water or a cooling liquid. This liquid is then used to provide either hot water for bathrooms and kitchens, or heating through radiators, underfloor systems or air handlers. This type of system is often used when replacing conventional gas boilers, as it can provide both space and hot water heating. It is also considerably more energy efficient than traditional systems.

How Much Does an Air Source Heat Pump Cost?

Unfortunately, there isn't a single number or answer to the question of how much air source heat pumps cost. The price of these products can vary drastically based on a range of factors, each of which you'll want to thoughtfully consider before making a purchase.


While many of us have been taught that branding is just a meaningless label companies use to market their products, it actually holds value in the world of heat pumps. As with any product, the more well-known brands typically offer the highest quality products and services for a higher price tag. Just a few examples of this include the difference in prices between a Daikin and Yutaki monobloc unit, which compare at roughly £16,000.

Installation Costs

The cost of installation should also be factored into your total investment. Installing an air source heat pump typically requires an HVAC specialist to ensure the unit is properly connected and running smoothly. This can add up to a considerable amount depending on the complexity of the job.

Size and Capacity

The size and capacity of your unit will also play a role in its cost. Larger units tend to be more expensive than smaller ones, and higher-capacity systems are usually pricier than their lower-capacity counterparts.

If you're in absolute need of numbers, know that air source heat pumps cost an average of £12,000-£17,000 in the United Kingdom. The amount you end up paying can differ depending on the factors mentioned above, as well as whether or not you've chosen to take advantage of government grants, which we'll detail further below.

It's also important to remember that while some of the above mentioned can make a unit more expensive, this extra cost comes with added value. At the end of the day, you get what you pay for with air source heat pumps - large investments reap large returns, and vice versa.

Grants and Financial Help

While air source heat pumps can feel out of reach for some homeowners, they're not unattainable. The UK government has recognized the value of these systems in lowering long-term energy costs and environmental emissions by implementing several programs designed to help people afford the cost of transitioning.

Renewable Heat Incentive (RHI)

The Renewable Heat Incentive, otherwise abbreviated as RHI, is a national scheme aimed at helping homeowners offset the cost of a new heat pump. It was first introduced to domestic households in 2014 and has since played a major role in the UK's transition to renewable energy infrastructure. While the RHI closed for new applicants in March 2022, it or a new version may be open in the coming months.


The domestic Renewable Heat Incentive compensates homeowners with regular payments based on the amount of renewable heat their system generates. This compensation is fixed month-to-month but is adjusted annually with inflation, and is offered for seven consecutive years.


You can apply for the RHI if you live in England, Scotland or Wales. You must either own your home or be a private or social landlord. New build properties are generally ineligible for the grant, unless you're doing the project yourself.

Boiler Upgrade Scheme (BUS)

Boiler Upgrade Scheme (BUS)

The Boiler Upgrade Scheme (BUS) is another government initiative offered to encourage the development of renewable heating infrastructure in the UK. It was launched on May 23, 2022 and is funded until 2025. The BUS is seen as an interim replacement for the RHI , though it's largely focused on improving the efficiency of existing boiler systems rather than outright replacing them with heat pumps.


The BUS compensates residents who install low-carbon heating fixtures in their homes from April 2022 to 2025 with an upfront payment of £5,000.

Installers can apply on behalf of property owners for:

£5000 towards the cost and installation of an air source heat pump. £5000 towards the cost and installation of a biomass boiler. £6000 towards the cost and installation of a ground source or water source heat pump


To be eligible for the BUS, you must live in England and own your home or be a private or social landlord. The scheme is administered by Ofgem, which offers more details regarding eligibility on its website.

Factoring In Installation Costs

In addition to the one-time expense of a new air source heat pump system, you should also be sure to consider the price you'll need to pay for installing it. Unless you're already a contractor with the appropriate training, hiring a professional will be necessary to get your unit up and running. Installation costs, like product costs, can vary based on multiple factors and need to be gauged on a case by case basis. To help you out in doing so, we've compiled the list below.

Property Type

Your property type can make a major difference in terms of the cost you can expect to pay for having an air source heat pump installed. Different living arrangements come in different sizes and with different product needs, not to mention infrastructure types. The following is a brief overview of three of the most popular types of homes in the UK along with an average installation price range for each.

Detached House

A detached house is considered to be any single-family home not attached to another building and/or property. These residences are their own freestanding structures and generally have yards spacing them apart. Detached houses can range in size from anywhere between 10 metres squared to hundreds, this floor area being the biggest factor in their heat pump installation costs.

Among average detached properties in the UK, homeowners pay a range of £8,000 to £16,000.

Semi-Detached and Terraced House

A semi-detached house can be defined as a single-family home that adjoins another on one side. A terraced house, on the other hand, joins other homes on each of its sides. As generally smaller properties, they'll usually fall into the same category when it comes to heat pump installation costs. The average rate in the UK for both semi-detached and terraced houses ranges between £7,000 – £10,000.

Flat and Apartment

The terms flat and apartment are often used interchangeably, and more or less refer to the same type of living space. They are one of many units in a multi-floored residential building and range in size to accommodate anywhere between one and 5+ people. Both flats and apartments tend to be smaller than traditional homes, therefore requiring a less comprehensive heat pump system. They are harder to access than detached properties however, which can factor into installation costs. As a ballpark average, you can expect to pay anywhere between £6,000 and £8,000 for the installation of an air source heat pump in a flat or apartment.


Not all heat pumps are made equal - as we've already covered, some are bigger than others, while certain units require unique infrastructure. Most installers base their rates upon these factors, with the simplest products to set up being the cheapest.

Home Energy Efficiency and Size

This is a factor mostly out of your control, but is still worth mentioning for the impact it can have on installation costs. Both size and energy efficiency play a factor in how much power a home will need from their heat pump. More power generally means a larger size unit, and larger units mean higher installation costs. If your house has a lot of space to heat or isn't effective in keeping the energy it generates inside, expect to have a costlier installation by default.

Existing Heating Systems

Your home's existing heating infrastructure will impact how expensive it is to install an air source unit. There are multiple types in the UK, each with specific requirements when it comes to adding a new pump.

As most new air source heat pumps require a separate hot water storage tank; your home's existing boiler will need to be replaced or reconfigured for compatibility. Properties with existing combi boilers however, will require new piping that allows for the inclusion of a tank. In both cases, this can equate to an added cost, with the later being more expensive.

What Factors Determine an Air Source Heat Pump's Running Costs?

A lot of circumstantial and environmental factors go into the cost of operating an air source heat pump. No two households will ever have the same bill - these are the things to consider when budgeting for your heat pump's running costs.

Temperature and Climate of Your Home

The temperature of your home and the local climate can affect how much your air source heat pump will cost to run. If you live in an area with mild winters, you'll likely not need your heat pump to run at maximum capacity and thus won't have as high of a bill. On the other hand, those living in colder climates will need to use their heat pump more often and could expect higher running costs.

Size of Home and Your Insulation

Much like installation, the size of your home and how well insulated it is plays a role in operating costs. If you have one of the larger houses we discussed earlier, expect to use more energy for heating - resulting in higher running costs. Poor insulation can also lead to bigger bills as your heat pump will need to work harder to make up for lost energy.

Installers will often help you choose the correct heat pump size for your home

Your Heat Pump's Efficiency Rating

Lastly, the efficiency rating of your air source heat pump can impact how much it costs to operate. A higher efficiency rating means less energy is used in running the unit and therefore results in lower bills. When shopping around for a heat pump, it's always a good idea to look for one with the highest rating available.

Air Source Heat Pump Cost Calculator

Need more precise numbers? The internet is full of free calculators that can be used to gauge the cost of running a heat pump in your home. Although they vary in specific methods, most that you'll find are reasonably accurate and will be helpful in planning a purchase. Below is an overview of the kinds of information these calculators ask for.

Region of the UK

Most calculators will want to know what part of the UK you're in. This helps them factor the local cost of energy in your region in addition to the size of your home and how energy efficient it is.

Size of Your Home

This includes the number of bedrooms, bathrooms, and other living spaces such as kitchens and sitting rooms. Floor space is another metric to have handy - some calculators use m2 while others use square footage.

Home Energy Usage

You'll need to provide the calculator with your estimated energy usage per month. This is usually provided as a number of kilowatt-hours (kWh). Not all tools require this, however it's worth noting that those that do tend to be more accurate. The average UK home uses 12,000 kWh per year, according to recent data.

Property Type

Some buildings require more energy than others to heat due to their façade and insulation, so the calculator may ask what type of residence you have. Is it a flat? A bungalow? A detached house? Know what category your home falls under before calculating a number.

Property Age

Similarly to property type, homes of different ages are also built differently and therefore have different energy requirements. Older homes, for example, tend to have poorer sealing and insulation, meaning they require more power to heat.

Desired Temperature Range

Certain calculators will ask for the range of temperature that you desire. This is the difference between the lowest and highest temperature you would like to have during a given day, measured in degrees Celsius. Knowing this can help the calculator determine how much energy your pump will need to provide in order to reach it.

Hot Water Usage

The amount of hot water you use will also have an impact on the cost of running a heat pump. This is because water heating requires more energy than space heating, so the calculator will need to know how much hot water your household uses on a daily basis.

Comparing the Running Costs of Heat Pumps and Boilers

If you're weighing your options for a new heating system, it's likely that you're going to want to compare these two. In general, air source heat pumps tend to be more efficient and cost less to run than boilers. Boilers require a lot of energy to heat water, whereas heat pumps work by transferring heat from one location to another, using much less energy in the process. Heat pumps also tend to be more reliable and require less maintenance than boilers, which can help reduce costs over time. It’s estimated that heat pumps offer 400% efficiency, which is quite a bit more than the 98.5% garnered by boilers.

Air Source Heat Pump vs. Boiler Calculators

Air source heat pump vs. boiler calculators are a great way to get an idea of how much you can expect to save when buying a new unit. These tools are online and completely free, making the research process a breeze for anyone who wants to compare ROI between their options. While the exact format of online air source heat pump vs. boiler calculators can differ based on the website providing them, you'll generally need the following information to come up with final numbers.

The Type of Heat Pump

The type of unit you're considering will be a factor in calculating and comparing its running costs to those of a typical boiler. Some air source heat pumps, such as monobloc units, are less expensive to install but tend to be more expensive to run than other types. Others, like multi-split systems, are pricier upfront but have a more competitive running cost. Indicating which type of pump you plan on using upfront will help the calculator gauge more accurate figures.

Annual Gas Usage

In order to calculate ROI, air source heat pump calculators need a gauge of how much gas your home uses on an annual basis. This number will be used to factor in the amount of energy your unit is expected to provide and connect with other considerations like overall efficiency and running cost. Generally, going with your home's usage in kWh over the past 12 months plus or minus 5% will give you a reasonably accurate output. If you're unsure what your usage is, check your annual energy statement or determine a rough estimate with a UK average energy consumption calculator.

Local Energy Costs

Of course, the rate your household pays for energy will influence how expensive a heat pump or boiler is to operate. Calculators generally ask for one or more of the following metrics.

Gas price/kWh: This refers to the cost of gas per kWh consumed. It can differ based on where you live - if you're unsure of the rate you're paying, check your energy bill or local provider's website. Ofgem gauges UK gas prices to currently average at 10.3p per kWh.

Electricity price/kWh: The price you pay for electricity is taken into account to find out how much it will cost to power your heat pump. Electricity price/kWh should also be available through your bill or online. The current national average sits at 34p per kWh, per Ofgem.

Gas daily standing charge: Daily standing charge is the fixed amount you have to pay for access to energy, regardless of whether you use it or not. The fee applies to all households, even those that are empty for part of the year. This charge can vary based on your specific region and is added to your electricity bill.

One important thing to note when picking a calculator is whether it accounts for VAT. Value Added Tax is a national tax charged on most goods and services in the UK, including energy bills. It currently sits at 5%, so it's important to factor in when looking at overall cost. Most tools will have an option to include it into their calculations.

Seasonal Performance Factor (SPF)

The SPF is an indication of the efficiency of your heat pump system. The higher the number, the less energy your unit will need to produce heat. This information can be acquired from the unit's online documentation and should be inputted into the calculator to get an accurate output. Some calculators may ask you for both a space and hot water SPF.

Number of People Living In the Home

Air source heat pump calculators also need an indication of how many people live on a property to accurately gauge usage costs. A household of two will require a different split of space heating and hot water as opposed to a house with five people. Having this number accounted for will help produce more accurate figures when comparing your options.

How Can an Air Source Heat Pump Make You Money?

An air source heat pump can help save you money in several ways. Firstly, installing a unit from a trusted manufacturer and using an energy-efficient model can reduce your home's overall energy consumption by up to 40%. This translates into savings on your monthly bills as well as potential tax credits.

Secondly, most air source heat pumps come with a 5 year guarantee and a 10-15 year expected lifespan. This means less money spent on repairs, maintenance and servicing over the long term.

Finally, installing an air source heat pump can also increase your home's value - as much as 7-10%, according to some reports. This can be especially beneficial if you're looking to sell your home in the near future.

All of these savings add up over time, making an air source heat pump a smart investment for any property owner.

The Most Important Factors to Consider When Buying an Air Source Heat Pump

Air source heat pumps are great for reducing energy bills and providing a sustainable alternative to traditional heating and cooling options. Before investing in one, it's important to consider a few factors that will affect your overall running costs.

Type of Heat Pump

The type of air source heat pump you choose can have a big impact on running costs. Different models have varying levels of efficiency and effectiveness, meaning some may be far more expensive to run than others. Calculators can help you compare prices across different types of heat pumps, making it easier to choose the right one for your home or business.

Installation Costs

Installation costs are another factor that must be taken into account when looking at the overall price of a heat pump. High-quality installation work is essential for ensuring your system works as intended, so it's important to factor in the labour costs associated with having yours fitted.

Usage and Efficiency

Air source heat pumps generally come with an estimate of usage in kWh, which is helpful for understanding how much energy your system will require to operate. Additionally, some systems come with a seasonal performance factor (SPF) that indicates how efficient the unit is at producing heat. This helps you determine what kind of running costs you can expect to encounter when using your heat pump.

Size of the Home

The size of your home or office space is also an important factor to consider when buying a heat pump. The larger the property, the more energy you'll need to adequately heat and cool it. Calculators can help you estimate how much power will be required for your chosen system, allowing you to make a more informed decision.

Size of the Unit

The size of the air source heat pump unit is also a key factor to consider. Units come in different sizes and capacities, so it's important to make sure you pick one that adequately meets your needs. Generally speaking, larger units are more powerful but they also require more energy to run, which can result in higher bills.

Needed Capacity

When looking at air source heat pumps, you may also want to consider the capacity needed to adequately heat your home or office. This is typically measured in BTUs (British Thermal Units) and refers to the amount of energy required for a given space.

Heat Loss of the Property

The heat loss of a property is another important factor to consider. This refers to how much energy is lost during cooling and heating processes, so having an idea of this can help you choose an air source heat pump that's most suitable for your needs.

Location of Heat Pump

The location of the air source heat pump is also a key consideration. If you're looking to install the unit in an area that's exposed to extreme temperatures, it may be necessary to invest in a more powerful unit. This will ensure your system has enough power and capacity to adequately heat or cool the space.

What About Service Costs?

It's important to factor in service costs when buying an air source heat pump. These include regular maintenance checks as well as any repairs that may be needed over time. Most manufacturers offer warranties for their products, but these can vary greatly in terms of how much coverage they provide and the cost of repairs. It's also important to note that many companies offer extended warranties for an additional fee, so be sure to double-check this when making your decision. Additionally, it's a good idea to find out what kind of customer service is offered by the manufacturer in case anything goes wrong with your system. This can help ensure you have access to quick and effective support whenever it's needed.

Wrapping It Up

Purchasing an air source heat pump is a big decision and there are many factors that should be taken into account before making your choice. From the cost of installation to the efficiency of the unit, it's important to understand all of the details related to this type of system so you can make an informed purchase. With the right resources and professionals by your side however, you can rest assured that you'll find the perfect heat pump to suit your needs.

Sold on the benefits of air source heat pumps and ready to get started? Find the perfect model for your home with Heat Pump Chooser. Simply fill in a quote request form and we'll match you with relevant products and installers from our comprehensive network. There's no obligation and no fee - so why not get started today?

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