What is a heat pump and how much do they cost?

Last updated: March 15, 2024

There’s an ever-growing focus on making the way we heat our homes greener. And one of the low-carbon heating options available right now is a heat pump. But you might be wondering how they work, if a heat pump is right for your home, and what people who’ve had one installed really think of them.

There are different types of heat pumps, but all of them use electricity, rather than gas or oil, to heat a home. Air source heat pumps have been the most widely adopted, which take their heat from the air, while ground source heat pumps – you guessed it – extract heat from the ground.

According to the government’s Heat and Buildings Strategy, 86% of households have a gas boiler. But it’s hoped that the installation of heat pumps, as well as other low-carbon alternatives, will get us towards significantly reducing UK greenhouse gas emissions over the coming decades, to reach net zero by 2050.

How do heat pumps work?

Heat pumps draw heat from the environment (such as outside) and move it to where it’s needed – in this case inside a home. It does this via a liquid called a refrigerant.

The heat from outside passes into the refrigerant and the heat pump compresses it to make it even hotter. This heat is then released into your home. This process happens on a loop, until the indoor temperature reaches the setting your thermostat is set to.

Some heat pumps have a setting which enables them to perform this process in reverse. So, when it’s particularly warm outside, you could set a heat pump to draw the heat out of your home to keep it at a pleasantly cool temperature.

A gas boiler often circulates water at what could be considered an inefficiently high temperature, of about 60 to 70 degrees, while water from a heat pump is typically circulated at below 50 degrees.

So for a heat pump to emit the same amount of heat as a gas boiler, you may need to either have bigger radiators, or a different type, such as fan-coil radiators, which distribute heat more effectively. But heat pumps are perfectly capable of keeping you comfortably warm, even in the coldest months.

How much do heat pumps cost?

The cost of a heat pump will vary depending on the size of your home, the type of heat pump you opt for, and whether there’s any additional work to complete before you install your new heating system. The cost will also be impacted by the brand, size and model of heat pump you choose. You can apply for an online quote tailored to your home via most energy suppliers.

There are government grants available to help with the cost of installing a heat pump in your home, known as the Boiler Upgrade Scheme. The government offers home-owners £7,500 towards the cost of installing a heat pump. The grant available is available to redeem against both air source and ground source heat pumps.

It’s worth noting that to be eligible for the grant, your home will need to have no outstanding recommendations to fit loft or cavity wall insulation on your Energy Performance Certificate (EPC). So, if you’re thinking about having one installed, you might want to look at making these improvements first.

Can landlords use the Boiler Upgrade Scheme?

Yes. The scheme is available to those who are renting out their property to tenants. In September 2023, the government shelved proposals for landlords to make energy-efficiency improvements to their properties by 2028. However, the heat pump grant is still available for any landlord looking to install one.

Who can’t use the Boiler Upgrade Scheme?

Most home-owners are eligible for the scheme, but there are some exceptions. Properties not eligible for the scheme include most new-build homes, social housing properties, and any homes that have already received funding for a heat pump.

How much does an air source heat pump cost?

Government estimates state that an air source heat pump will cost around £12,000 on average – that’s for the heating system itself, and the installation.

How much does a ground source heat pump cost?

Ground source heat pumps cost considerably more than air source heat pumps. The Energy Saving Trust estimates you could expect a ground source version that’s buried in trenches to cost around £28,000, on average. And this could rise to around £49,000 if you need to dig a borehole.

Are heat pumps less expensive to run than gas boilers?

Unfortunately, there’s no simple answer, as the cost of running a heat pump will be dependent on several factors. Probably the most significant is how energy efficient your home is to begin with. Heat pumps will work to a level that overrides your home’s heat loss – in short, they’ll put as much energy in as there is escaping from areas such as poorly insulated walls and roofs, and windows. So a heat pump needs to work harder to keep a home warm if it’s not very energy efficient.

A gas boiler is around 85% efficient, whereas a heat pump can reach around more than 300% efficiency. So in simple terms, as long as electricity doesn’t rise to more than four times the cost of gas (it’s around three times higher at the moment), and your heat pump was running at maximum efficiency, your bills would be lower with a heat pump.

Energy Saving Trust has calculated how much money you can expect to save annually if you make the switch to a heat pump from different types of heating systems:

Type of heating system	Annual fuel bill saving
Old (G-rated) gas boiler	£385
New (A-rated) boiler	£8
Old electric storage heaters	£1,100
New electric storage heaters	£830
New (A-rated) oil boiler	£15
Old (A-rated) LPG* boiler	£460
New (A-rated) LPG boiler	£50
Coal	£1,100

How long does it take to install a heat pump?

You can expect the installation of an air source heat pump to take around 3 days. During this time, your heating system won’t be operational, so if you’re considering making the switch, it’s a good idea to do this during the summer months, or ensure your installer is able to provide you with a temporary heating solution.

Is my home suitable for a heat pump?

As long as you have the space to fit a heat pump , you can in theory install one. But there are exceptions.

According to the Department for Energy Security and Net Zero, it is technically feasible for a low temperature air source heat pump to be installed in around 90% of the homes in Great Britain. This is based on current energy efficiency ratings, and internal electrical limit.

Also, because air source heat pumps fall under ‘permitted developments’, it’s unlikely you’ll need to seek planning permission before installing one. However, if you live in a listed building or a conservation area, it’s best to check with your local council.

To check whether your home might be suitable for a heat pump, you can use the Government’s Heat Pump Suitability Checker.

What’s it really like to have a heat pump?

Chris lives in a 1930s end-of-terrace, solid-wall house, which has an energy efficiency rating of D. After looking into ways to decarbonise the heating source he and his family relied on, a heat pump seemed like the best option, and he replaced his gas boiler with a ground source heat pump in September 2020.

“It’s definitely been a conversation starter,” laughs Chris. “I’ve had lots of neighbours ask about the heat pump and how we find it, particularly over the last couple of years as the interest in heat pumps has grown.”

Chris has made modifications to make the heat pump fit with his family’s needs, and what they wanted to get out of it.

“Back when we installed it, we didn’t want to spend lots of money replacing all of our radiators at the same time as the heat pump. Instead, we decided to replace just two radiators and add fan-coil versions in the rooms where we spend most of our time, where we’d want to heat the rooms to a comfortable 21 degrees. We prefer our bedrooms to be quite cool, so rather than heating them to 21 degrees, as we would the rest of the house, we were able to keep our existing radiators and heat those rooms closer to 18 degrees.”

One of the most asked questions about heat pumps is whether they can effectively heat homes during cold winters. Chris says: “I think the temperature dropped to about -4 Celsius in the first winter we had it, and we were able to keep the house at a comfortable temperature throughout this. In fact, it was a more pleasant heat, staying consistently warm, rather than the shorter-term intense heat you often get from a radiator powered by a gas boiler. Likewise, in the summer, the passive cooling setting is very popular in our house. A bit like being in a car on a hot day when you wind the windows up and switch the air con on, we’re able to do the same with the heat pump.”

Chris switched to his heat pump at a time when energy bills were starting to rise, so he may not have seen the savings he’d have hoped to in terms of comparing his bills to when he had a gas boiler.

“Instead of comparing my bills, I’ve chosen to look at the efficiency of my heat pump compared to my old gas boiler. And because my heat pump is around four times as efficient as my gas boiler, this is the real indicator of the savings I can expect to make over the long term,” he says.

So, is Chris satisfied with his heat pump?

“We’re very happy with it,” he says. “Particularly when, I’ll admit, I was quite sceptical before having it installed, and anticipated having some problems with it. As well as being able to utilise the space that was previously being taken up by the gas boiler, we no longer pay a gas standing charge, as we now only use electricity to power and heat our home.

“Our heating also feels a lot more controllable now – whereas our gas boiler was either on or off, we can use our heat pump in different ways to use our energy more efficiently, including storing heat to use at a later date if the weather is hot.

“We’re also thinking about installing solar panels to generate our own electricity to power the heat pump, to become more self-sufficient.”

What are the advantages of a heat pump?

They are a greener way of heating your home

One of the biggest advantages of heat pumps is they’re a greener way of heating your home than traditional gas boilers. The main reason they’re more energy efficient is because they’re not powered by fossil fuels.

And while you might not see a huge annual drop in your energy bills by switching – especially if you currently have a new A-rated gas boiler – the switch you’re making to using electricity to heat your home rather than gas means the CO2 your home emits over the course of a year – the emissions that are contributing to climate change – will be significantly reduced.

The Energy Saving Trust estimates that for an average-sized household switching from a new A-rated gas boiler to a heat pump might expect to pay relatively similar annual heating costs. However, that same household could expect to reduce their CO2 output by almost 2 tonnes annually. And that’s around 40% of your home’s annual CO2 emissions.

Heat pumps generate a more consistent and gentle heat than gas boilers

Gas boilers give short, sharp bursts of heat on demand to warm a home. As a result, the heat they give off can feel intense, as your radiators may become hot – even too hot to touch – in a short period of time. In contrast, heat pumps tend to operate at lower temperatures, giving off a more consistent – yet gentle -heat, over a longer period of time.

Heat pumps last longer than gas boilers

You can expect a heat pump to last longer than 15 years, which is the average lifespan of a gas boiler.

There are government incentives to help with the cost

Under the Boiler Upgrade Scheme, you can claim a £7,500 government grant to help with the cost of getting a heat pump. And this rises to £9,000 if you live in a rural area of Scotland. The government has also removed VAT on domestic energy-saving measures, including heat pumps, until April 2027.

What are the challenges of a heat pump?

Some of the most widely reported challenges with heat pumps don’t actually relate to the heat pumps themselves. For a heat pump to work at an optimum level, a home should be well insulated. If the home loses lots of heat via draughts, it will mean the pump needs more energy to be able to work effectively. Which means it’ll cost more to heat. And this is part of the reason you might have heard that you need to have a home that’s already very energy efficient before you install a heat pump.

The government cashback incentives are available to people who don’t have any outstanding recommendations on their home’s EPC to add insulation.

And because the UK’s mass heat pump rollout is still in its infancy, there are reports that in some areas of the UK there aren’t enough qualified installers to meet demand. But the number of installers is increasing all the time.

While generally very quiet, a heat pump does generate noise. But they’re usually installed outside a home: usually attached to an external wall or in a space in the garden.

You’ll need space on the outside of your home to attach a heat pump to. Or space to dig underground if you’ll be installing a ground source heat pump.

And probably one of the biggest barriers to their widespread rollout is that they can be more expensive to purchase than gas boilers, despite the government grants available.

What’s the difference between a ground source and air source heat pump?

The main difference between ground source and air source heat pumps is where they draw heat from. One uses the ground, and the other, the air.

Ground source heat pumps are considerably more expensive. You could expect a ground source heat pump to cost around £28,000, according to the Energy Saving Trust.

Ground source heat pumps can also cause more disruption when they’re installed, as you’ll need to dig underground in order to create a hole for it to be set into, as well as for the pipework to run into your house. This is in contrast to air source heat pumps, which can be attached to the wall of your home.

Do heat pumps work in cold weather?

Yes. Heat pumps are widely installed in countries like Norway and Sweden, which have much colder winters than in the UK.

Heat pumps can still function when temperatures drop as low as -20 degrees Celsius: a figure that’s seldom reached, even in a particularly harsh UK winter. Your local area will have an average winter temperature, and during your home’s heat pump assessment, your heat pump engineer will use this as the basis for calculating how powerful a heat pump you’ll need. This is to make sure your heat pump is powerful enough to keep your home toasty warm, even when the temperature drops.