Heat Pump Costings
By Paul Homewood
Time to take another look at heat pump costs, both installation and running.
Here I will be looking specifically at air to water heat pumps. There are lots of figures floated around for installation costs, and obviously a lot depends on the size of the house and other variables. Some, like Which, merely give a ballpark figure of around £10,000; others, like Ecoexperts give a range of between £7000 for 2-bedrooms and £13000 for 4-bedrooms. None seem to say exactly what is included.
Claims from heat pump suppliers need to be treated with extra caution. Certainly some I have seen, such as Octopus Energy, are grossly misleading.
I am therefore using data from the Energy Saving Trust and Greenmatch, neither of which can be described as anti-heat pump! The fact sheets from both are fully up to date.
According to the former, the typical cost is £14000, which they imply includes the cost of new radiators or other changes to the way heat is distributed. This cost of course does not include extra insulation.
https://energysavingtrust.org.uk/advice/air-source-heat-pumps/
In addition to this would be the cost of a new hot water tank. This would be a particular problem if there is no existing space to put one, which might involve building work. Alternatives such as hybrid systems (basically running the heat pump alongside a boiler!) would also be costly.
Greenmatch suggest anything between £8000 and £18000 for 2 and 3 bedrooms.
With insulation and water tanks, it is easy to see the cost approaching £20000 for an average sized home.
Running costs of a heat pump ultimately come down to what is called the Coefficient of Performance (COP). You will often see a COP of 3.0 bandied around as “typical” – this means that you 3 units of heat out of the system for every 1 unit of energy put in. For more details, see here.
However such claims are extremely oversimplistic. Greenmatch suggest anything between 2.5 and 3.5, assuming “adequate insulation”.
https://www.greenmatch.co.uk/heat-pumps/cost#running
Greenmatch also state that the system will run at a COP of 3.0 when the outside temperature is above 7C. However they note that UK monthly average temperatures are constantly below 7C between November and March, meaning a COP of 2.8 is more realistic. (Their figure of 4.5, by the way, is for ground source heat pumps.)
So let’s plug a few numbers in.
A typical 3-bedroom house is reckoned to use about 12000 KWh a year of gas for heating. Some of that energy is wasted, as gas boilers do not run at 100% efficiency. Greenmatch claim that the typical boiler only achieves 82.5% efficiency, but this is grossly misleading. Although this figure is derived from government studies, they were published as long ago as 2009, and were based on boilers that were already several years old at the time. As with heat pumps and other appliances, efficiency will inevitably decline over time. But nobody with a working gas boiler is likely to buy a heat pump, so the proper comparison must be made with a new modern gas boiler.
By law, A-rated gas boilers must be a minimum of 92% efficient. Even allowing for non-optimal working, a figure of 90% is not unreasonable, meaning that 12000 KWh of input energy supplies 10800 KWh of heat. With the price of gas set at 7p/KWh from Jan 2024, 12000 KWh will cost £840 a year. (Even assuming boiler efficiency of 85%, the cost would only increase to £889).
A heat pump working at a COP of 2.8 will use 3857 KWh. At a price of 29p/KWh, this amounts to £1118 a year.
A heat pump therefore is going to increase most people’s energy bills by £200 or more.
There is also the issue of hot water to consider, as heat pumps are neither able to supply super hot water, or hot water on demand. (The Energy Saving Trust talk about circulating water at between 35C and 45C, hence the need for much larger radiators).
This means that a heat pump will need a separate means of heating water, such as an immersion tank. But given that electricity is four times the price of gas, this could drastically raise the cost of hot water, compared to gas.
https://energysavingtrust.org.uk/advice/in-depth-guide-to-heat-pumps/
So don’t believe industry claims that heat pumps can save you money. And with gas prices set to fall in April, when the new Energy Price Cap is due, heat pumps will become even more costly in relative terms.
Finally, a quick comment about Air-to Air Heat Pumps, which have been commented on in previous posts:
https://energysavingtrust.org.uk/advice/air-source-heat-pumps/
The Energy Saving Trust have a separate factsheet for these.
The obvious advantage is that they are cheaper to install, between £1500 and £3500, according to Greenmatch. But the Energy Saving Trust note that “In the UK, air-to-air heat pumps are not typically used for heating larger homes, with most domestic air source heat pumps installations using air-to-water systems. More often, air-to-air heat pumps are installed in smaller properties, such as park homes or flats”
The first big problem for average sized homes is that you would need some sort of ducting system, which would be costly and disruptive to install. Moreover air cannot carry the large amounts of heat that water can.
Secondly, of course, you would need to install a hot water system, further adding to the cost:
And as we have seen already, using electricity to heat water is four times the cost of using a gas boiler.
According to a 2018 study, hot water accounts for a fifth of a typical household’s gas usage. At current prices that would be about £200.
Replacing a gas boiler with an immersion tank could see that bill rise to £800.
Comments are closed.
NOT A LOT OF PEOPLE KNOW THAT 
Who the h*ll are the Government to tell us how to heat our homes?
The problem with that argument was that it was only because of the government at the time that the UK moved to NG with an integrated gas grid.
In no way do I support the current moves, but we have to pick our arguments carefully.
Why do you claim that? The government didn’t introduce cars, Spoitify, streaming, central heating, TVs or hundreds of other things. The government only introduced NG because the government ran energy. If energy was provided by private companies at that time, they would have introduced NG.
They’re being ‘told’ by the globalists who want to rule the world.
That’s not their goal. They want to destroy human freedom.
The govt are merely implementing what is required by legislation, following the advice of the Climate Change Committee, and a Civil Service that has to obey the laws and codes that it likes.
A proper govt would have the balls to say that nothing will be banned, nothing will be taxed, and nothing will be subsidised.
It’s supposed to be for our own good (why?) , and to ‘save the planet’!
There are quite a lot of homes that have hot air systems, to which air-air heat pumps could be fitted. Not sure of the economics. Many switched to wet radiator systems so the air system might no longer be serviceable.
Well if a gas boiler ‘tax’ is going to be a couple of hundred quid, that’s a lot less than the £14K for a heat pump – plus minimal disruption from installation – and anyway since gas will be about £200 a year cheaper, it pays back over the first year.
It is not possible to understand what goes on in the minds of the nitwits in charge, that they think they can get people to fork out £14K and thus meet their targets of hundreds of thousands of heat pumps installed by year X.
So just how do they think ‘fining’ suppliers/installers for not selling enough will help?
In Britain, there are not that many homes heated via a fuel-fired *ducted* warm-air (WA) system. (Maybe 1% – 2%, if that??)
It is unlikely to be feasible, practical or economic to try to replace the heat source inside the warm-air heater with heat exchanger served by a heat pump.
Firstly the HP will be unable to provide the heat-exchange surface area within the confines of a ducted WA appliance.
Secondly, a HP won’t provide the required heat-exchanger *inlet* temperature for the required airflow rate.
Thirdly, the appliance’s or system fan is highly unlikely to be capable of providing the required increased static pressure at the airflow volume required to distribute the warmed air via the existing ductwork. (Especially at the low noise-levels at which the original system was designed to operate.)
I don’t think Britain has “quite a lot” of houses with ducted hot air heating systems. These are common in countries that have air conditioning systems for use in Summer, because the associated heat pumps can be run in reverse.
But in Britain, such systems are pretty much non existent, apart perhaps from a few “grand designs” new builds.
The vast majority of British houses have water – radiator systems which are unsuitable for heat pumps as the heat source because they need to run at water temps that a heat pump can’t achieve.
I’ve lived in two houses with ducted air, I have several friends with it and a heating engineer friend has specialised in the system. So my impression is that there are quite a lot of installations around the country. The actual number isn’t important, just that there are some that might be retrofitted with air/air HP if it can be engineered economically.
Retrofitting air ducting to existing houses in Britain would be virtually impossible. Typical ducting diameters are in the 6 to 12 inch range – how on earth do you route those to every room in the house? The house needs to be designed around the ducting – so only suitable for new builds or complete vacate-the-house renovations.
I’m really not bothered either way. I was pointing out that there may be more warm air systems than people imagine.
And there probably are not!
You need to provide evidence, not supposition
“These are common in countries that have air conditioning systems for use in Summer, because the associated heat pumps can be run in reverse.”
While true, the more common setup in the US is A/C and separate furnace for heating (sharing blower and ductwork). Further south, like Florida, the heat pump setup is more common.
I imagine heat pumps are quite common in the tropics.
Another issue : If you can achieve the level of insulation and airtightness necessary to give the heat pump any chance of keeping the house warm, you will almost certainly need a mechanical ventilation system. This too has a small running cost, but more importantly a largeish installation cost. It is another thing that is better incorporated into the design of a new build than attempting to retrofit into an existing building.
Charlie,
very true, but should that level of insulation and air tightness be acheived, then a gas or oil boiler would be very cheap to run, much less than a heat pump I suuspect, especially going forward as electrical unit cost.continue to rise.
Yes, it seems the need to even mention insulation is an indictment of heat pumps.
Latest from the EU…
Brussels takes heat pump ‘action plan’ off the agenda
21/12/2023
“Europe is falling behind on the decarbonisation of heat,” said Thomas Nowak, secretary-general of the European heat pump association (EHPA). Instead of addressing the issues, “the Commission has kicked [the action plan] into the long grass,” he added.
. . .
…fossil gas is still often cheaper than electricity, effectively abolishing the efficiency advantage of heat pumps. Skilled installers are in short supply and electricity grids are not always prepared to handle the extra load.
https://www.euractiv.com/section/buildings/news/brussels-takes-heat-pump-action-plan-off-the-agenda/
“fossil gas is still often cheaper than electricity, dammit”
Fixed it.
If they want heat pumps we need cheap electricity . Not more than twice gas or oil per kWh
To be cheap it would have to be inexpensive to produce. Net zero climate obsessions already killed that one.
Greenmatch have fallen into the same trap as many do confusing effciency with Coefficient of Performance and especially their comment that a heat pump is potentially four times as efficient as a gas boiler at 82% efficient. (Neglecting that all boilers now have to meet a 90% effciency figure; no device can acheive a 100% efficiency so four times is ludicrous, worse very misleading).
As heat pumps use electricity you cannot compare efficiency to any other appliance except those using electrcity with the equation of heat out against electrical units in.
To compare the efficiency against gas or oil boilers means using the energy required to make the electricity and distribute it to the consumer, then it can be compared to other heating devices.
The government is also misled by this very basic error. ( I was informed by a government representitive that heat pumps are 280% efficient)
And CO2 doesn’t affect the weather. My financial advisor recommended Octopus Energy. Glad I didn’t. Check out Trustnet. Based on taxpayer subsidy. Sell sell
How could not want to invest in a company that has just raised over £600m – probably to buy Shell Energy – from the major shareholders 2 of which are in Japan and another is the climate-grifting scumbag Al Gore’s fund.
No reference i made to noise. My air pump is noisy at all times. Plus the air being blown out is very cold so don’t have any seating areas near the down side of an air pump.
Thanks for your excellent analysis, Paul.
1. A bulky hot water storage cylinder isn’t always necessary when replacing a (gas) combi boiler.
Simply invite 78 fit friends over …
It’s worth noting however, that in producing that amount of heated water in that short time those hyperventilating cyclists create approx 15x more CO2 than a modern combi natural gas boiler!
2. Almost all heat pump proponents ‘forget’ or are ignorant of the fact, that undersized / slow-response heat pumps must run for many more hours than a swift-response boiler. In the depths of winter, it is often 24hrs/day. This adds to their energy inefficiency because all those extra hours when heating is not required (e.g. home occupants asleep or out at work, shopping etc) running costs are being racked up.
Once you get to £20,000 as the upfront cost, there’s no need for any more work. Over twenty years (the maximum to get my money back) it would have to save me £1,000/year. If we take off a typical new boiled installation costs, it is still over £10,000 more expensive so it would have to save me £500/year. It will never do that unless the government makes gas more expensive.
Don’t give those idiots any more stupid ideas
Last I heard was that they plan a phased switching of the levies on electricity over to gas. So more expensive gas is indeed their plan.
We often heat our water (tank) using off peak electricity particularly in the summer to avoid switching on the gas boiler, it is about the same price per kWh but the immersion is likely to be more efficient as there is less waste. A big tank of hot water usually lasts all day.
However, I can’t see how heat pumps for house heating would work for us, even ignoring the likely £20k-£30k capital cost, the big fans are noisy and ugly and I am sure likely to be more expensive to maintain as well as more expensive to run on a daily basis.
We can expect the net zero zealots to push up the price of gas, as well as the cost of new boilers, so that the heat pump option becomes comparable in running cost.
“We often heat our water (tank) using off peak electricity particularly in the summer to avoid switching on the gas boiler, it is about the same price per kWh but the immersion is likely to be more efficient as there is less waste.”
If you’re in Britain and your gas boiler is fired by natural gas, off-peak electricity is at least 2x* the price of Nat Gas per useful kWh.
*Many variables, but a truism – see relative comparative prices in the table below:
https://help.outfoxthemarket.co.uk/hc/en-gb/article_attachments/10486264878748
Not our experience.
Currently, our off peak electricity is 7.5p per kWh and gas is now 6.79p per kWh. The immersion does not need to run a pump to heat 10’s of metres of pipes to get to and from the tank and so even with the current prices I think the immersion is cheaper. The last time I did a direct comparison in the summer, using immersion was slightly cheaper.
However, in the winter we usually use gas to heat the water as a house full of warm pipes is positive rather than a waste of energy.
How much do you pay for peak electricity though?
You also need to factor in heat losses from the immersion tank, according to the Energy Trust
BTW – Octopus’ offpeak rate is 15.91p, but the peak rate is 42.43p.
What you save on offpeak, you will likely lose the rest of the day:
https://octopus.energy/smart/cosy-octopus/
Why would anyone use a Gas boiler to heat a tank full of water when the boiler provides very hot water “on demand”.
Someone needs to rethink what they are doing.
Someone seems not to understand the difference between a combi boiler and a system boiler. There are advantages to each. This someone prefers the flexibility of a system boiler, we often have two people taking a shower at the same time which might be challenging for a combi. Also with a tank it is also possible to use different methods of heating water according to circumstances.
This is of course a factor, however, we tend to use most of our hot water in the morning when we shower and so the losses are not significant. May not suit everyone of course.
Peak electricity is currently 31.03p
Brilliant idea!! Make it more expensive to heat your home and have hot water, after all, it is not as if defaults on bills are not already on the increase is it.
I don’t understand your point.
Artyjoke, I have a 42kW combi boiler. I can run two showers simultaneously no problem whatsoever.
Good.
For most of the year, I can heat my water from solar.
Folk with a boiler can relatively easily test the suitability of their home to having a heat pump replace their boiler.
Simply turn the *boiler’s* flow-temperature thermostat down to 45℃ for the remainder of this winter. 😀
That doesn’t allow for the need to have much bigger radiators to compensate though. To throw in another thought though – doesn’t the heat pump have to run much longer than a gas CH would because of its low water temperature?
In a word, “Yes”.
It’s also worth noting that a HP’s output and hence ability to transfer heat into the (water) heat transfer medium is inversely proportional to external temperature.
So when HP proponents boast of its COP or even SCOP (Seasonal Coefficient of Performance), that hides the real figure that most are interested in:
Its COP on a cold winter’s day when most heat is needed most of the time, AND, electricity prices are likely to be highest.
And the need to heat the water to 60°C on a regular basis to avoid the risk of legionnaires disease.
Quite a bit of heat pump installation in our village at the moment plus insulation and solar panels, because it’s all “free”.
https://energygrants.org.uk/central-heating/air-source-heat-pumps/
Someone living in the property must be in receipt of a qualifying benefit
OR
Have a combined household income of £31,000 or less.
Be an owner occupier or be a tenant renting off a private landlord.
Have an EPC of band E, F or G.
“Air source heat pumps work on electricity and for every kilowatt of power used, around 3 kilowatts of heat is produced. More efficiency is provided when installed with Solar PV, which will reduce your electricity bill by up to £750 per year.”
https://freeheatingscheme.org/wales/
“The Free Heating Scheme is part of the ECO4 Scheme. The ECO4 scheme was launched in April 2022 funded by the UK Government and energy companies as part of the obligation to reach net zero by the Government deadline. As part of the scheme, over 3.5 million properties across the UK qualify for FREE upgrades to make their property more energy efficient including Air Source Heat Pumps, Solar Panels and Insulation. This is fully funded as part of the ECO4 scheme and you do not have to pay a single penny.”
And the rest of us pay for it.
“Have an EPC of band E, F or G.” That makes no sense at all. A is the best EPC, G is the worst. It is actually illegal to rent out a property with a band F or G EPC.
Why on earth put a heat pump is a terribly insulated house?
I think the idea is that the insulation will be improved at the same time as the heat pump is installed – all for “free” of course – paid for by all the rest of us. Trouble is, it’s often very hard to effectively insulate older houses so, combined with the fact that electricity based heating will downgrade the EPC rating, the EBC rating could actually get worse with these “improvements”.
Link to a photo of a (cold) water heater. 🙂
Not mine, but very similar.
I have inexpensive electric via large dams.
For y’all in England, this is a very typical water heater setup in the US. I have same, but natural gas powered. It is independent of the household heating system.
Water line into house splits, half going to water heater, and the rest going to cold water uses. Hot water from water heater is distributed by pipes (usually insulated) to hot water outlets.
Most US households have forced air heating and air conditioning, with requisite duct work. Heat/air share ducts, blower, and thermostat.
Hi GC see my reply to John below. I noticed recently that a typical combination boiler in the US is nearly FIVE times the price ($3,600) of a UK model (£600)
As I say John’s tank alone is twice the price of the complete rig here. Yes lots of folk here have systems like that but they really are rather expensive compared to what you can have but in installation AND operating cost.
I guess this is in the Pacific NW of the USA, where, courtesy of the numerous dams in the Columbia and Snake rivers, hydro generated electricity is very cheap – about a fifth of what we in Britain pay.
Yet these are the same dams that the eco-loons, Biden, and the WA State Governor want to tear down to improve the salmon runs! Absolute madness!
Chris, those dams were built with salmon ladders.
Ray, there is no such thing as “a typical combination boiler in the US.” At least not in the southeast.
They are so rare, I have never seen one. I don’t even know what it is. I get the impression it’s like the old steam radiators in rooms, like in my college dorm in 1967.
This is what an American combi boiler looks like. This particular model retails at $3600
https://www.usboiler.net/product/k2-combi-high-efficiency-condensing-boiler
GC a combination boiler provides domestic heating via water pumped around the house to radiators as well as supplying continuous hot water on demand with no hot water tank. The advantage is one unit that is the size of a wall hung kitchen cabinet and effectively nothing else. They have become relatively cheap to buy, quick and cheap to install, very economical to run and take up very little space indeed.
I guess you have to bear in mind housing stock in the UK is small area compared to the US. My son’s 2 bed terraced house has a footprint of just 13 feet wide by 20 feet deep (320 square feet ground floor, 320 square feet 1st floor.) I bet you have individual rooms bigger than that!
Gawd, that’s ugly, Ray.
How is heat distributed to rooms?
Hi John, here in the UK, that tank alone runs out at about £1,150.
https://www.screwfix.com/p/rm-cylinders-indirect-pre-plumb-unvented-single-zone-cylinder-210ltr/9263j
Installation requires additional expensive piping and of course a boiler to heat up the water.
Conversely a boiler, that provides all heating and hot water with no tanks nor expensive connections and just sits unobtrusively out of the way (even in the attic), starts from almost half that figure.
https://www.screwfix.com/p/ariston-e-combi-one-gas-lpg-combi-boiler-white/330rx
In the US, “that tank” is just called a water heater.
Well, some rubes call it a “hot water heater.” “Duh, if it’s hot, why do you have to heat it?”
I did some internet searching on combi boilers in the US. They are used and readily available, though I couldn’t find any numbers on actual use.
Reviews are positive.
I assume it’s a northern thing.
Given the news on Hornsea 3 and the politicians desire for adding more expensive windmills, it is safe to assume that electricity costs will steadily rise in line with what happens in every other country as it increases its unreliable energy generation. So the gap between gas and electricity will steadily increase unless, as suggested above, the government clowns put a ‘carbon’ tax on gas. And increasing energy costs is a great way to wreck your country as Germany is finding out. If companies were not already going bankrupt, or heading for the border then the planned 10-20% increase is hardly going to help.
I am not going to go on my usual rant about heat pumps. However, here is an article written by a German expert calling for honesty is assessing heat pumps.
Click to access p15-18_klein.pdf
Heat pump ratings (En14511) are recorded at A7/35C (air temp 7°C water 35°C) to derive a CoP up to 3, simply to avoid the defrost cycling dropping the CoP by as much as 1 when temperatures start approaching zero.
In a cold winter you simply will not even manage a CoP of 2 from an air to water ASHP. Lots of salesmen will assure that they will be wonderful but they will not.
Additionally regarding installation figures, much of what is quoted for heat pumps is pure fantasy. Some hot water tanks alone cost more than a combi boiler. And then there’s the separate pump, expansion vessels interconnecting pipes etc, etc. Think about it, with a combi the hot water water pipes to your kitchen and bathroom come from the boiler location itself in 15mm pipes. If you have to install a new hot water tank in a separate location, as well connecting the heat pump to it ( expensive large bore piping) you also have to reroute the hot water supplies (and potentially cold water as well) from it. And of course if you no longer (or never had) a cupboard to house said tank then one has to be built and no doubt lots of additional redecoration.
I cannot speak for a whole UK average but here in the sunny southeast (Kent) self employed and reliable quality tradesmen expect around £2,000 per week (yes really) just to cover overheads and make a decent living wage. Installation costs in relatively modest properties in the real world will total in the region of £20,000 or more here to change to an ASHP.
As well as my own home, I have 3 rental properties ( I once had 5) and have very close working relationships with heating engineers both domestically and in my former professional life. My own view, that of industry experts I know and personal experience of near neighbours all indicate ASHP are a disaster area for most of the existing UK housing stock. Everyone should be warned that they will not be warmed.
Noting the issue of the levy and as my boiler is approaching 20 years old and a non-condensing type, I asked my local installer for a quote for a new one. Guess what – since the announcement of the forced price rise there’s been a run on boilers and I can’t even get a delivery date. Talk about the Law of Unintended Consequences!
Another curiosity is why the mandate applies only to heat pumps sold to the replacement market, whose potential buyers are even more reluctant than developers**. No wonder the boiler makers are sure they’ll fail to meet quotas.
** Talking of developers, apart from council-financed projects, none of the housing schemes going through at the moment includes ASPs and the council can’t or won’t insist, despite their declared climate emergency and all the money being thrown at useless projects like cycle lanes.
Maybe those consequences are not unintended……🙄
Of course until they fell out favour many of our parents had homes heated by ducted warm air systems build into the fabric of the building. In my parent case a small gas burner warming a heat exchanger that had a small fan moving the air to all main rooms. In rural france I have seen rather cruder looking instalations utilizing the chimney breast as a heat exchanger. they all seem to work ok, no pipe work no electronic controls.
Control system: Throw another log on the fire.