Budgeting: Heat pump cost: what you pay to install and run one
Heat pump cost covers installation, which can be high, and running costs, which depend on your home's insulation and energy prices. In a worked example, installing one costs about 10,000 before any grant, with yearly running costs similar to a gas boiler.
By Wealtie Team · 3 min read
Key takeaways
- Heat pump cost includes installation and running costs.
- In a worked example, installing one costs about 10,000 before any grant.
- Good insulation makes running costs lower and the system more effective.
- Check for grants, which can cut the installation cost a lot.
What is the heat pump cost?
A heat pump heats your home by moving heat from the air or ground outside into your home, using electricity. It's a lower-carbon alternative to a gas or oil boiler. The upfront cost is usually higher than a boiler, because of the unit, installation and often upgrades to radiators and hot water. Running costs depend on how well your home is insulated, the size of the system and your electricity price. In a worked example, installing an air source heat pump costs about 10,000 before any grant.
Grants and support for heat pumps vary a lot by country and change over time. In some places, they can cover a large part of the installation cost. Check what's available before getting quotes, since some grants have conditions about who can install the system.
A heat pump works differently from a boiler, and that affects how you use it. It tends to run for longer at a lower temperature, keeping the home steadily warm rather than blasting heat for short bursts. Many owners find the home feels more even and comfortable, but it can take a few weeks to get used to the new rhythm and the controls.
You'll also need space outside for the unit, usually against a wall or in the garden, and sometimes space inside for a hot water cylinder if you don't already have one. An installer's survey checks all this before you commit.
What does installing a heat pump cost?
Here's a worked example for a typical home, in round numbers that work in any currency:
| Item | Cost |
|---|---|
| Heat pump unit | 5,000 |
| Installation | 3,000 |
| Radiator upgrades | 1,500 |
| Hot water cylinder and controls | 500 |
| Total | 10,000 |
If a grant of 5,000 is available, the cost to you drops to about 5,000, which can be similar to replacing a boiler. Ground source heat pumps cost more to install than air source ones, because of the digging involved.
What affects heat pump running costs?
Insulation
Heat pumps work best in well-insulated homes, where they can run at lower temperatures. In a draughty home, they work harder and cost more to run. Improving insulation first often makes the whole system cheaper to install and run.
System size and design
A heat pump sized correctly for your home runs efficiently. A good installer works out heat loss room by room before recommending a system. A system that's too big costs more to buy and can run less efficiently, while one that's too small struggles on the coldest days.
Electricity prices and tariffs
Heat pumps run on electricity, so your tariff matters. Some energy suppliers offer tariffs designed for heat pumps, with cheaper rates at certain times.
How you use it
Heat pumps work best running steadily at a lower temperature, rather than being switched on and off like a boiler. Learning to use the controls well can make a real difference to bills.
Is a heat pump worth it?
It depends on your home, the grants available and your current heating. In a well-insulated home with a good grant, a heat pump can cost about the same as a boiler to install and run, with lower carbon emissions. In a poorly insulated home without support, it can be expensive and less effective. Many people install one when their boiler needs replacing anyway, which avoids paying for both. Running costs in the worked example are similar to a gas boiler, but your own figures may differ, so ask installers for an estimate based on your home.
Get several quotes
Ask at least three installers for written quotes, including a heat loss survey, the system size, radiator changes and the warranty. Check that they're properly qualified and that grants require a particular kind of installer.
Plan the cost
Whether you install a heat pump or replace a boiler, heating systems need replacing eventually. Saving a little each month in a sinking fund means the cost doesn't come as a shock. The home maintenance budget covers planning for big home costs, and repair or replace helps you decide when to change your heating. Are solar panels worth it? covers a related upgrade, and how to save money on heating covers cutting bills whatever system you have.
How do you plan heating costs in Wealtie?
Add energy bills as recurring transactions, so they log themselves on their date. Keep home improvements in their own expense categories, and set a budget for the project.
Questions people ask
In a worked example, installing an air source heat pump costs about 10,000 before any grant, including the unit, installation, radiators and controls.
Not necessarily. In a well-insulated home, running costs can be similar to a gas boiler, though insulation and electricity prices make a big difference.
It can be in a well-insulated home with a grant, especially when the boiler needs replacing anyway.
It helps a lot. Good insulation lets the heat pump run at lower temperatures and cost less.
This article is general information, not financial, tax or legal advice. Your situation is your own; check the numbers that apply to you before you act on them.
