As you may know, heat pumps aren’t cheap. The Energy Saving Trust estimates that a typical air source heat pump installation will cost you around £6000 – £8000, and a ground source heat pump installation can cost  £10,000 – £18,000 depending on the amount of heat required. The question is, are they worth it? Considering you can receive up to £9,100 from the Domestic Renewable Heat Incentive (RHI) for an air source heat pump, and over £27,000 for a ground source system – not to mention savings on fuel bills – we certainly think so.*

So what’s the reason for this hefty price tag? In this article, we take a closer look at the various costs associated with air and ground source heat pumps, and how they compare with other forms of central heating.

*Payments over 7 years sourced from BEIS Domestic RHI Calculator in England/Wales. Air source heat pump 7-year payments figure based on a 10.85p/kWh tariff rate. Ground source heat pump 7-year payments figure based on 21.16p/kWh.

Heat pump prices

Heat pump prices vary considerably. The only way to find out how much it’ll cost for your home is to get an initial survey completed. This is the first potential cost in the process of buying a heat pump.

An installer will come to your home to assess whether your home is suitable for a heat pump or not (ground source or air source). The installer will then leave to put a quote together.

It’s at the installer’s discretion to charge for this initial survey. However you may find, as is often the case, that this service is free of charge.

Ground and air source heat pump running cost

Here’s an idea of what a ground source or air source heat pump’s running costs could look like per kilowatt hour of thermal energy. These figures may not mean very much on their own, so we’ve compared heat pumps compare vs. boilers and other forms of central heating, along with their respective boiler efficiencies.

Heat Generator
Heat generator efficiency
Type of fuel
Cost of fuel (p/kWh)
Running cost (p/kWhth)
Air source heat pumpSCoP 3.9Electricity16.364.19
Ground source heat pumpSCoP 4.1Electricity16.363.99
Electric storage heater98%Electricity16.3616.69
Gas boiler98%Gas4.174.26
LPG boiler95%LPG7.197.57
Oil boiler95%Oil4.815.06

p/kWhth = pence per kilowatt hour of thermal energy
SCoP = Seasonal Coefficient of Performance

 Cost of fuels sourced from Energy Saving Trust, correct as of September 2020

As you can see, even with a fairly average SCoP (a unit used for measuring heat pump efficiency), low ground and air source heat pump running costs can drastically cut heating bills for those currently using electric storage heaters (approx. 69% cheaper than what you’re currently paying).

What’s more, a well-designed system with a flow temperature of 40°C or even 35°C in a properly insulated home is capable of achieving an SCoP of 4 and over. Couple that with an Economy 10 or 7 electricity tariff and a savvy approach to using your heat pump (timing it to turn on during off-peak electricity times), and you should see your heating bills drop to lower than LPG or even mains gas bills.

Taking it one step further, generating your own electricity would significantly reduce the running costs of a heat pump. From a consumption perspective, installing solar panels could effectively see your heat pump working at a CoP of 7 or above.

That may sound like a lot of ifs and buts, “but” one of the main issues is that the cost of electricity is high. This issue was raised by Dieter Helm in his government-commissioned “Cost of Energy Review”. At present, the UK is in a period of decarbonising its electricity supply chain. Whilst electricity-generating coal-fired power stations are closing ahead of the government’s plans to shut them all by 2025, it stands to reason that the price of electricity is rising. However, with the cost of renewable technology significantly reducing, and with more solar farms, battery storage and wind farms emerging throughout the UK, the cost of electricity is likely to reduce in the future.

You can find out more about the factors affecting the running cost of a heat pump and what you can do to minimise this cost by reading our in-depth article on saving money by installing a heat pump.

Air and ground source heat pump installation cost

Unsurprisingly, digging up a large portion of your garden does come at a cost. This is the main reason why ground-source heat pump installation costs are considerably more than air source heat pump installation costs. The cost further increases if you install a vertical ground loop system (boreholes).

However, with a ground-source heat pump comes the increased domestic RHI rates, and with it, the quicker payback period. You also get the assurance of maintaining a year-round Coefficient of Performance, unlike with air-source heat pumps that fluctuate through the seasons.

Models of heat pumps have different Total Installed Capacities (a number of kilowatts will be given e.g. “8kW air source heat pump”), so the price is usually compared per kilowatt. As a general guide, the heat pump prices that you should expect to pay are:

Type of heat pump
Cost per kilowatt (parts and installation)
Air source heat pump£900
Ground-source heat pump£1,300

Costs are indicative and are stated for information use only. Figures may vary, does not include additional heat distribution modifications.

Keep in mind that the cost per kW reduces as the Total Installed Capacity increases. For instance, you could be quoted for £1200 per kilowatt to install a small 5kW air source heat pump, but just £600 per kilowatt for a 16kW system. The cost may be greater still if you’re installing a vertical ground loop system.

Extra costs

The installation of a heat pump is often tied in with several other home improvements to keep the overall costs down and to achieve a high efficiency. These improvements can be renovating the garden if it’s a ground source heat pump, or improving the efficiency of the house by installing home insulation.

Perhaps the best improvement to accompany a heat pump installation is underfloor heating. Besides improving the comfort of your home, its large surface area makes it an ideal method of distributing heat evenly. This in turn reduces the flow temperature required, so it’s great for maintaining a high efficiency. The only downside is the upfront cost, which is usually above £2000 depending on the size of your house.

Want to find out how much your heat pump will cost?

As renewable technology specialists, we will accurately size heat pumps for individual houses. This is based on comprehensive heat loss and hot water calculations taken at your property, from which we can specify the heat pump model that will meet 100% of your heat demands most efficiently and cost-effectively.

If you’d like to find out how much a heat pump system for your house will cost, fill out our contact form. One of our Technical Account Managers will soon be in touch for a quick chat before putting together a proposal, complete with performance estimates and indicative costs.


  • However, heat pump prices are not cheap. Making a decision such as this requires a lot of planning and research. In addition, there are a number of factors that will affect the overall price of these devices.

  • Looking at heat pumps in isolation and expecting to use mains electricity isn’t the optimal solution. If you combine heat pumps with solar panels and solar batteries, that is when they make sense. My gas boiler will fail in the next few years, I’ll be looking to add battery storage, more solar panels and THEN heat pumps to my home. Battery prices and sizes are dropping, lifespans are increasing, solar panel prices continue to fall too. Give it five years from now, no one who has thought about it will buy a gas boiler.

    • Paul, That is the way of the future, using air-source etc, living off the grid as much as possible. Electrical storage will be the key.

  • Having installed an air source heat pump last year and removed our ageing gas boiler I can genuinely say the house has never been so comfortable and with the mains pressure hot water system and larger tank we have never run out of hot water. We have also dispensed with the shower pump. The system have performed really well even on the coldest winter days. Installation and commissioning took two days and the disruption was minimal with only a number of radiators being changed and the DHW cylinder being relocated.

  • You gave the same SCoP (3.36) for both air-source and ground-source heat pump systems, but doesn’t the efficiency (SCoP) of the air-source system go down to 1 or less (i.e. a waste of energy) in cold weather when you most need the heat?

    • Hi there Anthony, thanks for your message. As you say, the efficiency of an air-source system does drop during winter but SCoP is the short term for Seasonal Coefficient of Performance, meaning the average efficiency is calculated across the year. So despite the fact that efficiency drops in winter, the costs are evened out over the year.

      I hope this makes sense, please let me know if you have any more questions!

      Kindest regards,

      Evergreen Energy

  • Is this a viable option for an external single story home-office, using an insulated freight container? Its approx 12m x 5m x 2.5m, so assuming its only a 5kw pump.

    • Hi Darren, a heat pump can be a good option even for an insulated freight container. For a 5kW ASHP you would be looking at around £6-£8K all in. That said, the price is dependant on the amount of labour required and your geographical. Additionally, if you are going to be using that space for non-domestic purposes the Renewable Heat Incentive (RHI) payments you might be entitled to will differ from those if the space was used for domestic purposes.

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