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Heat Pump Costs & Savings

Heat pumps can provide highly efficient low-carbon heating, but installation prices and running costs vary considerably. The real cost depends on the property, the heating system, available grants and how efficiently the heat pump is designed to operate.

How much does a heat pump cost?

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For a typical UK home, an air source heat pump costs around £12,000 to install before grants, according to current Energy Saving Trust guidance.

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Ground source heat pumps are generally more expensive because of the excavation or drilling required for the ground collector. Energy Saving Trust currently gives around £15,000 for a typical trench-based ground source installation, with borehole systems potentially reaching around £57,000.

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These figures are useful starting points, but there is no single heat pump price that applies to every property.

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The total heat pump installation cost can depend on:

  • size and age of the property

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  • heat loss from the building

  • type and size of heat pump

  • existing heating system

  • radiator sizes

  • underfloor heating

  • hot-water cylinder requirements

  • electrical capacity

  • pipework

  • controls

  • insulation

  • location of the external unit

  • access

  • ground works for ground source systems.

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The important number is therefore not simply the price of the heat-pump unit.

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It is the complete installed heat pump system cost.

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Air source heat pump cost

 

An air source heat pump extracts heat from the outside air and transfers it into the home's heating system.

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For a conventional air-to-water system providing central heating and domestic hot water, the current typical installation cost is around £12,000.

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However, the equipment itself is only one part of the project.

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A complete installation may also require:

  • new hot-water cylinder

  • upgraded radiators

  • new heating controls

  • pumps and valves

  • new pipework

  • electrical alterations

  • removal of the existing boiler

  • changes to cupboards or plant areas.

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One house may need relatively little alteration.

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Another may need significant changes before the heat pump can operate efficiently.

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This is why advertised heat pump prices should not be compared without understanding exactly what is included.

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What does a heat pump installation cost include?

 

A good heat pump quote should cover the complete system required to heat the house properly.

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This would normally involve assessing the building first rather than simply selecting a heat pump based on the size of the existing boiler.

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Depending upon the property, the quotation may include:

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  • heat-loss calculations

  • heat-pump unit

  • hot-water cylinder

  • radiator upgrades

  • heating controls

  • pumps

  • pipework

  • electrical connection

  • system flushing

  • removal of the existing boiler

  • commissioning

  • MCS certification

  • grant deduction where applicable.

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If two quotations differ by several thousand pounds, the first question should be:

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Are they actually quoting for the same job?

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Heat-loss calculations matter

 

A heat pump should be sized around the amount of heat the property actually needs.

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That requires a room-by-room heat-loss assessment.

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The calculation considers elements such as:

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  • walls

  • roofs

  • floors

  • windows

  • doors

  • ventilation

  • room sizes

  • design temperatures.

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Correct sizing is important because the heating system needs to meet the home's heat demand while operating efficiently. Energy Saving Trust's installer guidance recommends sizing against the calculated design heat demand rather than simply copying the capacity of the existing heating appliance.

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This is one reason why buying a heat pump on equipment price alone is a mistake.

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The system needs to be designed for the house.

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Could insulation reduce the heat pump cost?

 

Potentially.

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If the property has significant avoidable heat loss, improving the building fabric can reduce the amount of heating required.

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That could involve:

  • loft insulation

  • roof insulation

  • cavity wall insulation

  • appropriate solid-wall insulation

  • floor insulation

  • draught reduction

  • better glazing.

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Energy Saving Trust recommends considering realistic insulation improvements before or alongside heat-pump installation, particularly in older homes.

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Reducing heat loss can make rooms easier to heat and may reduce the output required from the heating system.

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This does not mean every home needs to be completely renovated before installing a heat pump.

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It means the condition of the building should be understood first.

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Do radiators need replacing?

 

Sometimes.

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Heat pumps generally achieve their best efficiency when heating water to lower temperatures than those commonly used by traditional boilers.

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The heating emitters therefore need enough surface area to provide the required room heat at those lower temperatures.

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That may mean:

  • existing radiators are already suitable

  • some radiators need replacing

  • several radiators need increasing in size

  • underfloor heating provides part of the solution.

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Energy Saving Trust identifies radiator upgrades as one of the main factors affecting air source heat pump installation cost.

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A quotation that excludes necessary radiator upgrades can look artificially cheap.

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Heat pump hot water system price

 

Most conventional air-to-water heat pumps do not provide hot water instantly in the same way as a gas combi boiler.

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A hot-water cylinder is therefore normally required.

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Energy Saving Trust notes that the required cylinder size depends on household hot-water consumption and that a typical cylinder can often fit into a cupboard with approximately an 80cm × 80cm floor area.

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The cylinder and associated controls should form part of the overall heat pump system cost.

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For homes currently using a combi boiler, finding suitable space for hot-water storage can therefore be an important early design issue.

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What if there is no room for a hot-water cylinder?

 

There may still be options.

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Depending upon the property and heating strategy, alternatives can include:

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  • compact heat-pump arrangements

  • heat batteries

  • air-to-air heat pumps for space heating

  • hybrid approaches in certain circumstances.

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Energy Saving Trust identifies heat batteries and alternative heat-pump types as potential options where conventional cylinder space is difficult.

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The best solution depends on the home rather than simply choosing whichever product takes up the least space.

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Heat pump grants in 2026

 

The available grant can dramatically change the real cost to the homeowner.

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Under the current Boiler Upgrade Scheme in England and Wales, eligible installations can receive:

  • £7,500 towards an air-to-water air source heat pump

  • £7,500 towards a ground source or water source heat pump

  • £2,500 towards a qualifying air-to-air heat pump.

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There is also a temporary enhanced grant for certain off-gas-grid properties.

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Until March 2027, eligible properties heated by oil or LPG and without a mains-gas connection can receive an additional £1,500, taking the grant for qualifying air-to-water or ground source systems to £9,000.

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Eligibility and scheme requirements need to be checked for the individual property.

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What does the £7,500 grant mean in practice?

 

Take a typical air source installation costing around £12,000.

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A £7,500 Boiler Upgrade Scheme grant could reduce the amount represented by that headline installation cost to around £4,500, before considering any project-specific extras or differences in quoted price.

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That completely changes the financial comparison with replacing a conventional boiler.

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For an eligible off-gas-grid property receiving the temporary £9,000 support, the difference can be greater still.

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This is why homeowners should establish grant eligibility before making the final heating decision.

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Who actually applies for the Boiler Upgrade Scheme?

 

The scheme is installer-led.

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A qualifying installer normally deals with the application and applies the grant towards the eligible installation rather than the homeowner receiving a cash payment and arranging the system independently. The property and proposed installation still need to meet the scheme requirements.

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This makes the choice of installer important.

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Homeowners should establish:

  • whether the installer is MCS certified

  • whether the system qualifies

  • what grant is being claimed

  • whether the quotation shows the price before and after grant

  • what happens if the application does not qualify.

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Heat pump running costs

 

Installation cost is only half the question.

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Homeowners naturally want to know:

Will a heat pump actually save money?

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The answer depends heavily on the system being replaced and how the new heat pump is operated.

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Energy Saving Trust says air source heat pumps are more than three times as efficient as gas or oil boilers in terms of useful heat delivered relative to energy consumed.

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But heat pumps use electricity, and electricity currently costs considerably more per unit than mains gas.

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That means high efficiency does not automatically guarantee lower bills.

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Could a heat pump cost less to run than gas?

 

Yes — but the tariff is becoming increasingly important.

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Energy Saving Trust's 2026 analysis found that many heat pumps on ordinary flat-rate electricity tariffs cost roughly the same as, or more than, an efficient gas boiler.

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However, heat pumps using appropriate specialist or dynamic tariffs performed much better, with its analysis showing potential heating-bill savings of up to around £330 a year compared with gas under the combinations assessed.

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That is a very important change in the heat-pump conversation.

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The question is no longer simply:

Which heat pump should I buy?

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It is increasingly:

Which heat pump, heating design and electricity tariff should I use together?

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The electricity tariff matters

 

A heat pump consumes a significant amount of electricity during the heating season.

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Paying an unnecessarily high rate for that electricity can undermine an otherwise efficient installation.

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Heat-pump-specific and time-of-use tariffs can potentially provide cheaper electricity during certain periods.

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Energy Saving Trust's latest research concluded that tariff choice can be one of the deciding factors in whether a heat pump costs more or less to run than gas.

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A good green home strategy should therefore consider the tariff alongside the heating technology.

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Could disconnecting the gas save more?

 

Potentially.

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If the heat pump replaces all gas heating and the household can also move other remaining gas appliances to electricity, the gas supply may eventually no longer be required.

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That eliminates the gas standing charge.

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Energy Saving Trust estimated the avoided gas standing charge at around £105 a year based on July 2026 prices.

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That saving should only be included where the property genuinely no longer needs gas.

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If a gas hob, fire or other appliance remains connected, the standing charge will remain.

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Heat pump efficiency explained

 

Heat-pump performance is often discussed using COP or SPF.

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The basic principle is straightforward.

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A heat pump does not convert electricity directly into heat in the same way as an electric resistance heater.

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It uses electricity to transfer heat from outside the building.

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Energy Saving Trust describes heat pumps as capable of producing around three units of useful heat for each unit of electricity used, with actual performance varying by system and operating conditions.

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A well-designed installation can perform substantially better than a poorly designed one.

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That is why installation quality matters so much.

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Low flow temperatures and savings

 

Heat pumps generally become more efficient when they do not need to produce extremely hot water.

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That means running the heating system differently from a traditional boiler.

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A conventional boiler may operate at high temperatures for relatively short periods.

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A heat pump is often happier operating:

  • at lower temperatures

  • for longer periods

  • with suitably sized radiators or underfloor heating

  • with stable controls.

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Energy Saving Trust notes that heat pumps are more efficient at lower operating temperatures, including when producing stored hot water.

Trying to operate a heat pump exactly like an old gas boiler can therefore reduce efficiency.

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Ground source heat pump cost

 

A ground source heat pump extracts low-temperature heat from the ground rather than from the outside air.

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The heat pump itself is only part of the project.

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The ground collector must also be installed.

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This is typically achieved using:

  • horizontal ground loops installed in trenches, or

  • vertical boreholes.

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Energy Saving Trust's current guidance gives approximately £15,000 for a typical ground-loop installation, while borehole systems can rise to around £57,000 depending on the property and drilling requirements.

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This explains why searches for ground source heat pump cost and geothermal heat pump cost produce much higher figures than ordinary air source systems.

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Is a geothermal heat pump the same as a ground source heat pump?

 

In UK homeowner terminology, ground source heat pump is normally the more useful term.

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“Geothermal heat pump” is used frequently elsewhere, particularly internationally, to describe systems that extract low-temperature heat from the ground.

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For a UK domestic project, the key distinction is usually between:

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Air source heat pump

Heat collected from outside air.

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Ground source heat pump

Heat collected from buried loops or boreholes.

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The equipment may work on similar refrigeration principles, but the installation costs are very different because of the ground works.

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Why are ground source heat pumps more expensive?

 

The ground collector is the main reason.

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A suitable installation may require:

  • extensive trench excavation

  • access for excavators

  • pipe loops

  • manifold arrangements

  • specialist drilling

  • geological assessment for boreholes

  • reinstatement of the garden or land.

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Energy Saving Trust notes that trench-based systems need sufficient accessible land, while boreholes can extend roughly 75–200 metres deep, depending on heat demand and local geology.

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That additional infrastructure creates a much larger capital cost.

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When could ground source heating make sense?

 

Ground source systems can be particularly worth investigating for:

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  • larger rural properties

  • homes with substantial gardens

  • new-build developments

  • properties with high heating demand

  • several properties sharing a ground array

  • projects where major ground works are already planned.

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The buried ground loops can have a very long working life, and the temperature underground is more stable than outside air.

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But the high initial investment means the economics need careful assessment.

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Air source or ground source – which is better value?

 

For most existing homes, an air source system is likely to have the lower initial cost.

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Ground source offers advantages where the site and budget allow it, but the difference in installation cost can be substantial.

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A homeowner should therefore compare:

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  • installation cost

  • available grant

  • efficiency

  • property heat demand

  • outdoor space

  • disruption

  • expected system life

  • likely running costs.

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The technically most efficient system is not automatically the financially best solution.

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Air-to-air heat pump cost

 

There is also another type of air source heat pump.

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An air-to-air heat pump uses indoor fan units to heat rooms directly rather than heating water for conventional radiators.

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It can also normally provide cooling.

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Energy Saving Trust currently estimates approximately:

  • £1,900 for a single-room installation

  • £3,700 for a system serving a typical three-bedroom semi-detached home.

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Qualifying air-to-air installations can currently receive £2,500 through the Boiler Upgrade Scheme in England and Wales.

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For some smaller homes, flats and properties where heating and cooling are both desired, that can make air-to-air worth considering.

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Air-to-water versus air-to-air

 

These systems should not be confused.

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Air-to-water heat pump

Typically supplies:

  • radiators

  • underfloor heating

  • stored domestic hot water.

  • ​

Air-to-air heat pump

Typically supplies:

  • warm air directly into rooms

  • cooling during summer.

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Air-to-air systems generally do not provide normal domestic hot water, so a separate solution is needed for baths, showers and taps.

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The lower installation price therefore does not necessarily mean the two systems are directly comparable.

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Heat pump replacement cost

Heat pumps do not last forever.

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As with boilers, pumps, compressors, controls and other components eventually wear.

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The eventual heat pump replacement cost will depend on whether only the heat-pump unit is being changed or whether substantial parts of the original installation also need replacement.

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A well-designed system may leave much of the supporting infrastructure already in place, including:

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  • appropriately sized radiators

  • underfloor heating

  • hot-water cylinder

  • pipework

  • electrical connection.

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Future replacement could therefore be less disruptive than the original conversion from a conventional boiler system.

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Heat pump servicing cost

 

Heat pumps still require maintenance.

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Energy Saving Trust currently advises that systems should generally be serviced according to the manufacturer's recommendations, usually once a year, and estimates a typical service at around £150.

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An air source service may include checks of:

  • electrical safety

  • controls

  • refrigerant

  • pressures

  • filters and coils

  • compressor

  • fan

  • pump

  • seals.

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Ground source systems may require additional checks to the ground-loop circuit.

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Maintenance should therefore be included when considering lifetime costs.

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Heat pumps and solar panels

 

Solar panels and heat pumps can work well together because both move the household towards electricity as its primary energy source.

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Solar PV can supply some electricity directly to the heat pump when generation and heating demand coincide.

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However, there is a seasonal mismatch.

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Solar generation is strongest in summer.

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Space-heating demand is strongest in winter.

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Energy Saving Trust points out that solar cannot store summer electricity until winter, so the grid will still be needed to balance generation and heating demand.

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Solar can contribute, but it should not be presented as providing free heat-pump operation throughout the year.

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Heat pumps and battery storage

 

Battery storage can potentially have a particularly useful relationship with a heat pump.

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Energy Saving Trust's 2026 modelling found that combining a battery, a heat pump and an appropriate tariff can create significant savings because the battery can charge when grid electricity is cheaper and supply the home during more expensive periods.

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For example:

Cheap overnight electricity

Charge battery.

Expensive morning period

Battery helps supply the home and heat pump.

Solar generation during the day

Solar can contribute directly or recharge storage.

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The financial result still depends on battery cost and tariff, but the technologies can work together.

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Heat pumps and underfloor heating

 

Underfloor heating can be particularly well suited to heat pumps because it provides a large heating surface area and can operate effectively at relatively low water temperatures.

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However, installing new underfloor heating solely to accommodate a heat pump can add significantly to the project cost.

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The opportunity is much stronger where floors are already being replaced as part of:

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  • an extension

  • renovation

  • new kitchen

  • major refurbishment.

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In those circumstances, planning the heating system at the same time can avoid duplication.

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Installing a heat pump during an extension

 

An extension or major renovation can be an excellent time to consider changing the heating system.

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The project may already involve:

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  • new radiators

  • underfloor heating

  • new insulation

  • upgraded electrical services

  • changes to hot-water storage

  • new plant space.

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Instead of installing a new gas boiler and then replacing it several years later, homeowners can investigate whether the overall project should be designed around a heat pump from the outset.

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The heat-loss calculations for the new work can then be coordinated with the existing property.

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Should I replace a working boiler now?

 

Not necessarily.

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A greener home strategy does not mean replacing functioning equipment without considering cost and timing.

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If a relatively modern boiler is performing well, the most sensible immediate investment might instead be:

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  • insulation

  • solar panels

  • heating controls

  • draught reduction

  • heat-pump preparation.

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Then, when the boiler eventually needs replacement, the home may already be better prepared for a heat pump.

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This can avoid scrapping useful equipment prematurely while still creating a clear transition plan.

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What if the boiler needs replacing now?

 

That is when the heat-pump calculation becomes particularly interesting.

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The homeowner no longer needs to compare:

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£0 versus the entire heat-pump cost.

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They need to compare:

the cost of the replacement heating system they would have bought anyway

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against:

the additional cost of moving to a heat pump after grants.

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Energy Saving Trust's recent modelling used an average replacement gas-boiler cost of around £3,700 and an average heat-pump cost of around £11,700. After allowing for the £7,500 grant, it calculated the additional capital difference at only around £500 in the scenario it modelled.

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That is a much more useful comparison than looking only at the headline heat-pump price.

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Is a heat pump cheaper than a gas boiler?

 

The answer has two parts.

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Installation cost

Before grants, a heat pump generally costs considerably more than replacing a conventional boiler.

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After the Boiler Upgrade Scheme is taken into account, the difference can become much smaller for eligible homes.

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Running cost

On an ordinary electricity tariff, a heat pump may not automatically be cheaper than an efficient gas boiler.

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On an appropriate heat-pump or dynamic tariff, current Energy Saving Trust modelling shows the balance can shift in favour of the heat pump.

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So the correct comparison needs to include purchase price, grant, system efficiency and tariff.

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Heat pumps replacing oil or LPG

 

The economics can be particularly attractive for some properties currently dependent on expensive off-grid fuels.

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The Government has temporarily increased Boiler Upgrade Scheme support to £9,000 for qualifying off-gas-grid properties replacing oil or LPG with an eligible air-to-water or ground source heat pump, available from July 2026 until March 2027.

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For rural homes already considering replacing an oil boiler, that level of support makes a heat-pump assessment particularly worthwhile.

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Heat pumps replacing electric heating

 

Replacing direct electric heating can produce a very different running-cost calculation.

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An ordinary electric heater essentially uses one unit of electricity to provide around one unit of heat.

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A heat pump can provide several units of useful heat from the same electrical input.

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Energy Saving Trust therefore notes that switching from direct electric heating to a heat pump can substantially reduce electricity used for heating.

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Homes with storage heaters or direct electric systems can therefore present particularly strong opportunities.

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How long does a heat pump take to pay back?

 

There is no universal heat-pump payback period.

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It depends on:

  • actual installation price

  • grant received

  • alternative heating-system cost

  • existing fuel

  • heat-pump efficiency

  • electricity tariff

  • annual heating demand

  • gas standing charge

  • maintenance.

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However, Energy Saving Trust's 2026 modelling produced an interesting result.

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Where an owner was already due to replace a gas boiler, received the £7,500 grant and used an appropriate heat-pump tariff, its analysis suggested the additional investment relative to a replacement boiler could potentially pay back in around two to four years under the combinations assessed.

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That is not a universal heat-pump payback guarantee.

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It demonstrates how dramatically grants and tariffs affect the calculation.

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Why heat pump performance matters so much

 

A heat pump with excellent laboratory specifications can still perform poorly if the real installation is badly designed.

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Problems can include:

  • wrong heat-pump size

  • undersized radiators

  • excessive flow temperatures

  • poor controls

  • inadequate commissioning

  • poor pipework design.

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Energy Saving Trust's latest analysis found that even a favourable electricity tariff could not fully compensate for a poorly performing heat pump.

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This is why selecting the cheapest installer purely on price can be a false economy.

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What should a heat pump quote contain?

 

A useful heat pump quote should allow you to understand exactly what you are buying.

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Look for:

  • room-by-room heat-loss calculation

  • make and model of heat pump

  • design heat load

  • expected flow temperature

  • hot-water cylinder

  • radiator schedule

  • required radiator replacements

  • controls

  • electrical works

  • pipework

  • commissioning

  • warranties

  • MCS certification

  • expected performance

  • Boiler Upgrade Scheme contribution

  • total price before and after grant.

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If something is excluded, it should be clear.

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Get more than one heat pump quote

 

Energy Saving Trust recommends obtaining quotes from at least three MCS-certified heat-pump installers.

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This is useful not only for negotiating price.

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Different installers may propose:

  • different heat-pump sizes

  • different radiator upgrades

  • different cylinder arrangements

  • different flow temperatures

  • different equipment locations.

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If one proposal is radically different from the other two, ask why.

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The design reasoning can be just as revealing as the headline price.

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The cheapest heat pump quote may not be the cheapest heat pump

 

Imagine two quotations.

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Quote A – £9,000

Smaller radiators retained, limited design information and the system operates at a relatively high flow temperature.

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Quote B – £11,000

Several radiators upgraded and the system is designed to operate efficiently at a lower flow temperature.

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Quote A appears £2,000 cheaper.

But if Quote B produces substantially lower electricity consumption every year, the long-term economics could reverse.

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This is why homeowners should compare system design and expected operating performance, not just installation price.

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What about very cheap heat pump offers?

 

The Boiler Upgrade Scheme means some companies can advertise surprisingly low homeowner contributions.

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That does not automatically make the offer poor value.

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But check what is actually included.

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Ask:

  • Is this the full installation?

  • Are radiator upgrades included?

  • Is the cylinder included?

  • Are electrical works included?

  • What heat-loss calculation has been completed?

  • What flow temperature is proposed?

  • Who manufactures the equipment?

  • What warranty applies?

  • Is the installer MCS certified?

  • What will the system cost to operate?

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A subsidised price is only good value if the system itself is properly designed.

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Heat pump prices should be considered alongside the home

 

A £12,000 heat pump may be poor value in one property and an excellent investment in another.

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The answer depends on the house.

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A whole-home assessment can reveal whether the priority should first be:

  • insulation

  • glazing

  • heating distribution

  • electrical upgrades

  • solar

  • heat pump

  • another improvement entirely.

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The most expensive mistake is sometimes installing a technically good product into a home that was not ready for it.

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Think about the next ten years

 

A heating system is a long-term decision.

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The house may change during that period.

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You could later add:

  • solar PV

  • battery storage

  • an electric vehicle

  • an extension

  • air conditioning

  • improved insulation.

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These all affect the property's energy profile.

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A heat pump should therefore be designed around not only today's home but also realistic future changes.

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Heat pump costs versus whole-home costs

 

Suppose a homeowner has £15,000 available.

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One option is spending almost all of it on a heat pump.

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But perhaps the same property would perform better with:

  • £3,000 of insulation

  • a grant-supported heat pump

  • upgraded controls

  • selected radiator improvements.

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Alternatively, the building may already be well insulated and the best investment is simply the heat pump itself.

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There is no standard package because there is no standard house.

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Start with an APN Green Home Survey

 

An APN Green Home Survey can help establish whether a heat pump makes sense within the wider improvement plan for your property.

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Rather than starting with a particular heat-pump model, we can look at:

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  • the existing property

  • heating system

  • insulation

  • windows and doors

  • current energy use

  • likely heat-pump location

  • hot-water requirements

  • radiator or underfloor heating implications

  • solar potential

  • battery storage

  • future EV charging

  • grants and funding

  • planning considerations.

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The objective is to understand what should be improved and in what order before substantial money is committed.

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So, how much does a heat pump cost?

 

For a typical domestic project in 2026, a useful starting point is around £12,000 for an air source heat pump before grants.

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A trench-based ground source installation can start around £15,000, with borehole systems potentially becoming far more expensive.

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Eligible households in England and Wales can currently receive £7,500 towards qualifying air-to-water or ground source installations, with £9,000 temporarily available for certain off-gas-grid oil and LPG properties, and £2,500 available for qualifying air-to-air systems.

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But those headline figures are only the beginning.

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The real value of a heat pump depends on:

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what you pay, how well the house retains heat, how well the heating system is designed, how efficiently the heat pump operates and what you pay for the electricity that runs it.

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A good heat pump is not simply an appliance.

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It is a heating system designed around the home.

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Considering a heat pump? Start with an APN Green Home Survey and understand the property, likely costs, available grants and wider improvements before choosing the system.

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NEXT STEPS

Every home is different, so the right next step depends on your property, your budget and what you want to achieve. APN Green Homes can help you turn the information you have just read into a practical plan for your own home. Whether you are considering one improvement or looking at a complete whole-home energy upgrade, we can help you understand what is suitable, what should be prioritised and where your money is likely to make the greatest difference.

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Choose one of the options below to get the ball rolling:

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BOOK A GREEN HOME SURVEY
Get a detailed assessment of your home with practical, property-specific recommendations and a clear plan for the improvements worth considering.

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BOOK A PHONE CONSULTATION
Talk through your property, ideas and priorities with us and get some initial direction on the best way forward.

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EMAIL US
Send us details of your property, photographs or any questions and we can advise you on the most appropriate next step.

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GIVE US A CALL
Prefer to speak to someone? Give us a call and tell us what you are hoping to achieve.

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Your greener, more efficient home starts with understanding the right improvements for your property — and putting them in the right order.

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