As you might expect, the big question around getting a heat pump is whether it will save you money. The honest answer is it depends on which type of heating system you’re replacing.

If you’re replacing an electric storage 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. The Energy Saving Trust estimates that a typical air source heat pump installation will cost upwards of £6000, and a ground source system £10,000+. But some of you will know that by installing a heat pump, they can receive a large portion of this money back in tax-free payments 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 (subject to performance).

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 cost of a heat pump is determined by four main factors:

  • The cost of electricity
  • The amount of heat required
  • The heat pump’s efficiency (CoP)
  • The temperature outside

The cost of electricity

A heat pump’s running cost is 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 are a lot of homes in the UK that aren’t connected to the mains gas network. The alternatives (such as LPG boilers, coal, solid fuel and electric storage heaters) for these households aren’t nearly as cost-effective to run as heat pumps. For instance, electric heaters require around 3-4 times as much electricity to work, making a heat pump installation worthwhile.

One thing that could make a huge difference in terms of savings is shopping around energy savings websites for the cheapest fixed tariff. According to Ofgem, customers who stick with their average variable tariff could be paying £250 more than those who shop around to find the cheaper fixed tariff deals. It really highlights the fact that showing a little loyalty towards your energy provider gets you nowhere.

It’s worth taking a look at Economy 10 or 7 tariffs too – by timing your heat pump to switch on during the off-peak times (depending on which region of the country you live in, but usually around 12 midnight – 7am for Economy 7), you could shave 50% off your electricity bills according to OVO Energy.

You can also reduce the amount of electricity you pay for by generating your own. In fact, by installing solar panels, the amount of electricity required by your heat pump will mean that, from a consumption perspective, it can operate at a CoP of 7 or more (there’s more on CoP later).

The heat demand

This really comes down to your home’s efficiency. Generally speaking, houses in the UK aren’t very efficient – they require a lot of heating, which results in expensive energy bills. By increasing the efficiency of your home (improving insulation and draught proofing), heat won’t be able to escape so easily. You’ll be kept warmer for longer without any extra heat, so the heating demand will decrease.

The heat pump’s efficiency

Having a well-designed system is crucial to attaining a high efficiency (the technical term for heat pump efficiency is Coefficient of Performance or CoP). We’d always recommend using an MCS-certified installer for this reason, as they must adhere to a strict set of rules that reduce the likelihood of an inefficient system.

Another thing that weighs into the efficiency of a heat pump is the size of your emitter system (radiators and underfloor heating). Radiators designed for high-temperature boilers don’t need to be very large because the temperature of the water that flows through them (the flow temperature) is around 70ºC. The flow temperature for an efficient heat pump will be around 35ºC, which means you need a larger surface area of radiators (or ideally underfloor heating) to supply the same amount of heat.

This is the nature of heat pump technology – heat pumps raise the temperature of naturally-occurring heat from outside to the desired level in your home. The smaller this difference of inside and outside temperature, the less the heat pump has to work, thus the greater the efficiency.

The temperature outside

Again, this is down to the heat pump’s method of heat exchange. As a heat pump raises the temperature of low-grade heat to a higher level, it stands to reason that the warmer the heat source is, the easier it is for the heat pump to reach its required temperature. If it’s particularly cold outside, the difference between the temperature inside and out is greater. The heat pump must raise the temperature a steeper gradient, and doing so requires more work. Luckily, the temperature underground remains a mild 10ºC all year round, so ground source heat pumps aren’t affected by seasonal change.

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 SystemFuel bill savings per yearRenewable Heat Incentive payments per year
Carbon dioxide savings (kg CO2/year)
Gas boiler£555 to £600£2,355 to £2,5553,330 to 3,600 kg CO2
Electric storage heater£835 to £930£2,355 to £2,5555,800 to 6,400 kg CO2
Oil boiler£390 to £425£2,355 to £2,5555,300 to 5,700 kg CO2
LPG boiler£1,105 to £1,200£2,355 – £2,5554,200 to 4,600 kg CO2
Coal£520 to £575£2,355 – £2,5557,000 to 7,700 kg CO2

Switching to an air-source heat pump

Existing old systemFuel bill savings per yearRenewable Heat Incentive payments per year
Carbon dioxide savings (kg CO2/year)
Gas boiler£455 to £485£855 to £9253,000 to 3,300 kg CO2
Electric storage heater£735 to £820£855 to £9255,500 to 6,100 kg CO2
Oil boiler£290 to £315£855 to £9254,900 to 5,400 kg CO2
LPG boiler£1,000 to £1,090£855 to £9253,900 to 4,200 kg CO2
Coal£415 to £465£855 to £9256,700 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 make several assumptions about the example house. Given the large variety of housing and conditions within the UK, it’s much better to have a MCS-certified installer carry out a survey – what’s more, the survey is often free of charge.

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.

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