Heat Pumps

Will I save money by installing a heat pump?

save money heat pump

As you might expect, the big question around getting a heat pump is whether it will save you money. The answer to this is it depends on which type of heating system you’re replacing. If you’re replacing an electric heater, the answer is a resounding yes. If you’re switching from an oil or LPG boiler, the answer is still yes, but you won’t save as much as switching from an electric system.

If you’re currently on mains gas, you’re probably going to break-even by the time your heat pump finally bites the dust. You’d be cutting your carbon emissions, but from a financial perspective, it would make more sense to either look at gas hybrid heat pumps or to focus on other means of reducing your energy consumption, such as insulation.

Upfront Cost

It’s easy to see that the initial cost of heat pumps can be quite off-putting, but some of you will know that by installing a heat pump using an MCS-certified installer, they open themselves up to receiving tax-free payment through the Renewable Heat Incentive (RHI).

The RHI is a government funded scheme that’s designed to encourage homeowners to choose renewable heating systems over conventional methods. The nature of the RHI allows homeowners to recoup enough funds so that in the long run, their heat pump will have cost them no more than a replacement boiler.

Furthermore, heat pumps are capable of lasting 20-25 years. Considering that standard boilers have a life expectancy of around 10 years, you may well need to replace 2 boilers in the space of one heat pump’s lifetime, and naturally, having your boiler replaced comes with added fees.

Running Costs

The running costs of heat pumps are subject to fluctuating electricity prices. As it stands, it’s roughly 3½ times more expensive than gas[1], so if you’re currently using mains gas, it wouldn’t be financially worthwhile to install a heat pump system.

However, there’s a large quantity of homes in the UK that aren’t connected to the mains gas network. The alternatives (such as LPG, coal, solid fuel and electricity) for these households aren’t nearly as cost-effective to run as heat pumps; electric heaters require around 3-4 times as much electricity to run, which would make fitting a heat pump a good investment.

How much could I save?

The tables below give you a rough idea of how much you could save by replacing an old system with a ground source and an air source heat pump.

Switching to a ground-source heat pump

Existing Old System Fuel bill savings per year Renewable Heat Incentive payments per year
Carbon dioxide savings (kg CO2/year)
Gas boiler £555 to £600 £2,355 to £2,555 3,330 to 3,600 kg CO2
Electric storage heater £835 to £930 £2,355 to £2,555 5,800 to 6,400 kg CO2
Oil boiler £390 to £425 £2,355 to £2,555 5,300 to 5,700 kg CO2
LPG boiler £1,105 to £1,200 £2,355 – £2,555 4,200 to 4,600 kg CO2
Coal £520 to £575 £2,355 – £2,555 7,000 to 7,700 kg CO2

Switching to an air-source heat pump

Existing old system Fuel bill savings per year Renewable Heat Incentive payments per year
Carbon dioxide savings (kg CO2/year)
Gas boiler £455 to £485 £855 to £925 3,000 to 3,300 kg CO2
Electric storage heater £735 to £820 £855 to £925 5,500 to 6,100 kg CO2
Oil boiler £290 to £315 £855 to £925 4,900 to 5,400 kg CO2
LPG boiler £1,000 to £1,090 £855 to £925 3,900 to 4,200 kg CO2
Coal £415 to £465 £855 to £925 6,700 to 7,300 kg CO2

*Sourced from Energy Saving Trust, figures based on fuel prices as of April 2017. Figures based on replacing existing old G-rated heating systems in a typical well-insulated four-bedroom detached home in Great Britain with an average ground source and air source heat pump installation.

The tables use national averages and makes several assumptions about the typical house in the UK, but given the large variety of housing and conditions within the UK, it’s better to have a MCS-certified installer carry out a survey.

Following the installer’s site visit, you will receive a proposal. This includes informed estimates of savings, initial cost and RHI payments, and outlines exactly how you would benefit from a heat pump taking many factors into account. These factors include but are not limited to:

  • The heating system you’re replacing
  • The type and unit of heat pump you’re installing
  • Insulation and heat loss
  • Fuel costs
  • Water heating and/or space heating
  • How you use the heat pump (desired flow temperature and how long you would need to run the heat pump
  • Efficiency (SCoP)
  • Installation cost
  • RHI calculation
  • Geography (for air source heat pumps)
  • Porousness of ground (for ground source heat pumps)
  • Life expectancy

If you’d like to set up a site visit from an MCS-certified installer, we’re happy to help.

[1] Figures sourced from Energy Saving Trust, correct as of May 2017.

Leave a Comment