rural house with air source heat pump

How much does an air source heat pump cost?

Expert advice to make sure you get the best from your green energy investment

By Rebecca Foster | 25 October 2021

An air source heat pump cost depends on several factors. But with VAT cut from 5% to zero on heat pumps and other home energy-saving measures in April 2022, the prospect of switching from a gas or oil-fired boiler now seems more enticing. Powered by electricity, air source heat pumps (ASHPs) extract warmth from the air, and increase the temperature to supply heating and hot water.

Calculating the cost

The cost of an air source heat pump varies. It depends on the size of the unit, its manufacturer, heat output and its level of performance. The coefficient of performance (COP) is a measure of a unit’s efficiency. The COP shows how much usable energy is extracted from the air compared to how much electricity is used to power the pump.

A COP of four means that for every 1kW of electrical energy used, 4kW of heat is generated. The higher the ratio, the more efficient the unit and the more efficient its heat delivery. To compare like with like, look for the seasonally adjusted indicator of performance (SCOP). This shows how effective heat pumps are on an annual basis. It indicates the ratio of the heat output to the supply of total electrical energy over the year.

Some models provide both heating and cooling. These models tend to be more expensive. ‘The average cost of an air source heat pump for a three-bedroom detached house is between £8,000 and £10,000,’ says Max Halliwell, heat pump specialist at Mitsubishi Electric.

Installations used to benefit from financial incentives through the Renewable Heat Incentive, but unfortunately this closed to new applications on 31 March 2022.

An air source heat pump is installed outdoors. Priced from £9,000, Nibe’s F2040 model has a heat output of 8kW

Nibe’s ASHP F2040, priced from £9,000, has a heat output of 8kW

Running cost comparison

Estimates from quote-comparison website Greenmatch show that for an average four-bedroom house with an ASHP, annual heating costs start at £759. ‘Compared to a gas boiler, an air-source heat pump requires a lot less input energy. But gas can be cheaper than electricity,’ says John Taylor, managing director of Enhabit. Improve your home’s thermal envelope by ensuring the building is airtight and well-insulated. This reduces demand on the heat pump and keep the running costs in check.

The Boiler Upgrade Scheme

You might think an air-source heat pump pricey at £8,000-£10,000, but a ground-source heat pump is even more expensive, starting from around £13,000 (plus, you need a lot of land for this option). In a bid to reduce this expense, the government’s Boiler Upgrade Scheme makes £5,000 grants available to reduce the cost of low-carbon heating. Running over a three-year period from April 2022-March 2025, the initiative has £450 million in funding.

Manufacturers and the government are consulting on solutions to drive down the price of heat pumps and make them on a par with fossil fuel boilers by 2030. Providing ministers succeed in reducing the price of electricity over the next decade, by shifting levies away from electricity bills, the running costs should be no higher either.

The government has pledged to achieve 600,000 installations every year by 2028, but there’s a long way to go. Industry figures show that, in 2019, only 35,000 heat pumps were sold in the UK, compared to 1.67 million gas boilers.

Barn conversion with air source heat pump from Grand Designs

Barn conversion by Pad Studio with Mitsubishi Ecodan air source heat pump. Photo: Nigel Rigden

Will you need new radiators?

Despite clear signs of consumer interest in greener energy solutions (searches for ‘heat pump grant uk 2022’ shot up by 355% in October 2021), energy experts have warned that Heat Pump grants of £5,000 to replace gas boilers may not be enough. It’s worth bearing in mind that it’s not just their boiler they will need to replace, but radiators too.

‘We need to inform our customers that if they made the switch to renewables that they would need to have the correct heat loss calculations completed,’ says Chris Harvey, a central heating and radiator expert at Stelrad. ‘This is because their radiators will likely need to increase in size – it is great to change the heat source, but radiators are the mechanism via which heat transfers into the room – a very important point that consumers will need to bear in mind.’

Stelrad already has products on the market for renewable systems, such as large K2s (double panel radiators), K3s (triple panel radiators) and vertical radiators.

black modern radiator in room with white tiled wall table and plant

Heat pumps will require larger radiators. Photo: Yorkshire Radiators

Driving down costs

The hope is that rising demand, and subsequently an increase in supply, will bring down the costs of heat pumps. To help grow the market, a new £60 million Heat Pump Ready innovation programme was announced as part of the £1 billion Net Zero Innovation Portfolio. The scheme provides funding to drive technological innovation, resulting in heat pumps that are cheaper, smaller and easier to install over the next decade.

‘The Heat and Buildings Strategy will help kick-start a cheap clean-heating revolution by bringing prices down for households and allowing companies to invest in scaling up their clean-heating operations,’ said Greg Jackson, CEO and founder of Octopus Energy.

‘Octopus has already committed £10 million investment to its research and development and training centre dedicated to the decarbonisation of heat, and has begun training engineers at the rate of 1,000 per year.

‘But this is just the beginning. By scaling up the technology and supply chain in Britain, innovative companies like ours will soon be able to fit and run heat pumps without any government support, bringing us one step closer to making the UK the Silicon Valley of Energy and creating thousands of clean energy jobs throughout the country.’

Gabled extension with 4kW photovoltaic solar panels powering a 3.5kW air-source heat pump

BakerBrown developed the plans for this gabled extension with 4kW photovoltaic solar panels powering a 3.5kW air source heat pump that feeds the underfloor heating

Demand is on the up

‘The heat pump industry is in the best shape it has ever been, with sales in 2021 already double those seen ever before,’ said Phil Hurley, Chair of the Heat Pump Association.

‘[The government’s] announcement was timed perfectly to take advantage of the Heat Pump Association’s training course. The industry is now ready to retrain the UK’s army of installers with the capacity to train up to 40,000 per year, to ensure consumers can find a suitably trained and skilled heat pump installer when they need one.’


Further heat pump cost implications

Air source heat pump retrofit tips from David Hilton, an authority in sustainable building and energy efficiency at Heat & Energy

  • ASHPs are not a universal replacement for boilers. They replace the primary heat source but there are things that need to be in place to avoid high electricity bills.
  • Radiators must be compatible with the low flow temperatures of an ASHP. They need a greater surface area than standard radiators.
  • Underfloor heating is particularly effective when used alongside a heat pump. Design the system with close pipe centres that are no further than 150mm apart. Good insulation under the pipes avoids conductive heat loss.
  • Change an existing hot water cylinder for one that has a bigger, heat pump-compatible coil and a bigger storage capacity. A greater percentage of water from the taps is from the hot water cylinder mixed with a small amount of cold water.
  • Ensure your installation meets the conditions that qualify for potential incentives or grants.

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