Air source heat pump costs and savings

It can cost more than £10,000 to buy and install an air source heat pump, but there are substantial government grants to help reduce that. Find out more about heat pump costs and how installing one might help you save on your energy bills. 

You can buy a heat pump through an energy company or from an independent installer. The cost will vary according to the size of the heat pump and any extra work needed in your home. This should be assessed by an expert before you begin, so you know exactly what's needed and how much it will cost.

While the up-front costs are high, government support is currently available that takes a significant chunk off the total bill. Heat pumps can also be much more efficient than gas boilers when installed and used properly, in well-insulated homes with the right sized radiators. 

Try our interactive calculator below to understand more about the savings you could make with a heat pump. 

Most households will find that an air-source heat pump is the most appropriate choice, though if you have a particularly large energy demand and a lot of outdoor space you may want to know more about ground-source heat pumps as well. 

Our introduction to heat pumps explains the difference between the two, and the different air source heat pump options. 

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How much does an air source heat pump cost to install?

Just like gas boilers, air source heat pumps (ASHPs) are available in various sizes, and their installation can be simple or more complex, so the cost will vary according to your needs. 

The amount of heating and hot water your household uses will determine the size of the heat pump you need, which will in turn affect the price.

Extra work, such as upgrading your radiators, adding more insulation or installing a hot-water storage tank, will also increase your quote.

The most recent government statistics report that the average cost for an ASHP installed in October-December 2024 under the Boiler Upgrade Scheme (BUS) was £12,500 for an average 8.0kW unit.

That means that after receiving the grant amount of £7,500, a typical household will have paid around £5,000 for their air source heat pump installation.

But for some households that are 'heat-pump ready' and need no additional upgrades, this figure could be much lower, so it's worth getting a quote for your own home. 

In some cases, the bill will be under £10,000, so with the BUS grant applied you'd pay no more than you would for a replacement gas boiler.

Read more about the Boiler Upgrade Scheme and how you can get a grant of up to £7,500 to install an air source heat pump in homes in England and Wales. Home Energy Scotland offers grants of up to £7,500 in Scotland.

How much does an air source heat pump cost to run?

How much energy your heat pump will use depends on several factors, including:

• the size of your home
• how well insulated your home is
• how warm you like your home to be. 

Heat pumps use electricity, which, if bought at the standard, price-capped rate, currently costs around four times more per unit than gas. That means heat pumps can be more expensive to run than gas boilers, even though they are much more efficient. 

However, some energy companies now offer tariffs that significantly cut the cost of electricity used for heat pumps, either by discounting the unit rate at certain times (time-of-use tariffs or off-peak tariffs) or by charging a lower rate solely for the power used by the heat pump (heat pump tariffs).

Dr Jan Rosenow, Energy Programme Leader at the Environmental Change Institute at the University of Oxford and Jackson Senior Research Fellow at Oriel College, Oxford, told us that: 'A household could save more than 50% on running costs with a heat pump compared to a gas boiler. But this requires the heat pump installation to be of high quality, the efficiency of the heat pump to be high and the customer to be on a heat pump tariff.' 

A typical air source heat pump should generate three or more units of heat for each unit of electricity it uses. The efficiency of a heat pump is indicated by its Seasonal Coefficient of Performance, or SCOP. In the UK, this is generally around 3.0 (or 300% efficient), but can be higher or lower depending on your set up.

The payback time (how long it takes to recoup the upfront installation cost in energy savings) depends on:

• the type of heating system you're replacing
• whether you get a grant to help pay for installation
• how efficiently your system works (including how well the heat is dispersed and how well your home retains it)
• the price you pay for electricity the heat pump uses
• how you use the heat generated by the pump.

See more detail about how air source heat pumps work and how their efficiency (SCOP) is calulated in our guide to air source heat pumps explained.

Heat pump savings calculator

If you currently have a gas boiler, this interactive calculator shows how much you could save on your ongoing heating bills by installing a heat pump. 

The graph will show you what your annual energy bill savings would be with a heat pump, depending on your energy tariff and your heat pump's efficiency (SCOP). 

There are additional instructions for how to use the calculator below.

How to use our heat pump savings calculator

Step 1: Enter your annual gas consumption (don't include any commas or other punctuation) OR the number of people in your household.

If you know your annual household gas consumption, in kilowatt hours (kWh), enter this figure to calculate your potential energy bill savings. If you don’t have the information to hand, you can use the typical medium consumption (11500kWh) or you can enter the number of people in your household. 

Next, click the arrow to find out how much you could save every year on your energy bills.

Step 2: Click the arrow ‘See breakdown’.

The graph will show how much you might save according to the efficiency of the heat pump (SCOP) when paying the standard price-capped rate for electricity.

Move your mouse cursor over any point of the graph to see the expected savings for each tariff according to the efficiency of the heat pump. The higher the heat pump SCOP, the greater the savings.

Step 3: Refine your results using the panel to the left of the graph.

You can fine-tune your results by changing the following inputs:

• Use the slider bar to select your annual gas consumption (between 5,000 and 20,000kWh). You can find this on your bill or online energy supplier account.
• Select your current gas boiler efficiency (85% or 92%). A new A-rated gas boiler should be 92% efficient, but a boiler that’s more than ten years old may be closer to 85%. For boilers made since 2015, you can find the ErP (Energy-related Products) rating on the boiler itself or the original paperwork. Older boilers may display a SEDBUK (Seasonal Efficiency of a Domestic Boiler in the UK) rating, or you can check the model number of your boiler in the PCDC database.
• Select different tariffs to see how much you could save by switching to a specialist heat pump tariff or time-of-use tariff. You can select more than one to compare them.
• Choose to display your potential savings as a monetary value (£) or as a percentage (%).

How to understand your results

We've worked out an example, below, for a typical medium-use household with a gas boiler.

According to Ofgem, average energy use for a 2-3 person household living in a 2-3 bedroom house is 11,500kWh of gas a year, so we entered 11500 on the first screen.

We changed the boiler efficiency to 85%, assuming we wish to replace an old boiler that is nearing the end of its useful life. 

We selected a number of different energy tariffs to compare – the default (in red) is the current energy price cap for electricity of 27.03p per kWh.

We chose to see the results as a percentage saving (as compared to the cost of running a gas boiler) rather than a price. You can toggle this on the left of the graph. 

This is the graph that was generated for us:

The graph shows that if you were paying for standard electricity rates, a household with this energy usage would need a heat pump with a SCOP of at least 2.9 before it started to make annual savings compared to running a gas boiler. But with a specialist tariff providing cheaper energy, you'd make savings even with a lower SCOP of 2.0. The more efficient the heat pump (higher the SCOP) the more you will save. 

About the calculator

To make the calculations in the tool above, we've made some assumptions.

In households that use gas, around 2% of total gas consumption is used for cooking. This has been accounted for in the calculation of cost savings.

We've assumed that households that switch to a heat pump will discontinue their gas supply, so both the gas consumption and standing charge are counted as savings. You may need to switch from gas to electric for cooking; if you choose to retain your gas supply for cooking only, the gas standing charge will be disproportionately high.

If your gas boiler is less than 85% efficient, you will begin to see greater cost savings if you switch to a heat pump. 

Changes in energy prices will affect future comparisons. If gas prices rise at a faster rate than electricity, then the running costs of a heat pump will be more attractive than a gas boiler in years to come. The calculator will be updated quarterly to reflect the latest price cap.

This tool was developed in collaboration with Ambient, an independent not-for-profit organisation that supports the acceleration of electrified heating and cooling solutions, and Dr Jan Rosenow, Energy Programme Leader at the Environmental Change Institute at the University of Oxford and Jackson Senior Research Fellow at Oriel College, Oxford.

Heat pump costs using specialist energy tariffs

The savings calculator above shows the tariffs currently on the market designed for heat pump owners. As more options become available, the calculator will be updated with additional tariffs.

Other time-of-use (ToU) tariffs may also be suitable, depending on your pattern of use, but be careful of tariffs with very high peak rates, as you may not save money if you’re unable to shift your energy use away from those times (typically 4-7pm).

The cheapest tariff for you will depend on when you use the most energy, and how flexible you can be with your electricity use. To make the greatest savings, you'll probably need to schedule your heating, hot water and appliances using electronic timers or smart programmers, or be at home most of the day to manually switch things on and off at the right times.

You'll need to have a smart meter that records half-hourly consumption to sign up for one of these, or any other time-of-use tariff.

Are there any other costs?

If you plan to replace your gas boiler with an air source heat pump, you should also consider swapping your gas cooker for an electric one. Retaining a gas supply just for cooking will mean the standing charge is disproportionately high. 

If you terminate your gas supply, you may have to pay for removal of the meter. The cost varies according to supplier. If you don't remove the meter, you'll continue to pay a standing charge.

Will your electricity bill be higher with a heat pump?

If you switch from gas, oil or LPG heating to a heat pump, your electricity bills will be higher than before. That's because all your heating and hot water costs will be added to your electricity consumption - including kitchen appliances, TVs and entertainment systems, lighting and other plugged-in devices. 

The flipside is that you will no longer receive a gas bill (assuming you also remove any other gas appliances such as your cooker, and remove your gas meter). The increase in your electricity bill should be cancelled out by what you save on gas - and overall, as shown in the graphs above, you may save a significant amount of money.

If your electricity bills seem unexpectedly high, it may be a sign that your heat pump is not set up correctly or not operating as efficiently as it should, and you should ask your installer for advice. 

Whether or not you've got a heat pump, it's worth making sure you're on the best energy deal for you. Use Which?'s switching service to compare gas and electricity prices.

Buying a heat pump through an energy company

Some energy companies offer heat pump surveys and installations with MCS-certified installers who can apply for government grants on your behalf.

Energy companies offering heat pumps and installations include:

• British Gas offers a survey, installation and aftercare. Its 'Warm Home Promise' means it will give you your money back if your heat pump doesn't reach an agreed temperature for your home. In practice, this just means fitting a system that's the right size, but it doesn't guarantee a specific level of efficiency. They also offer a discounted rate on electricity your heat pump uses, for a fixed period.
• EDF Energy partners with a company called CB Heating, which installs Daikin heat pumps with a five-year warranty. They also offer a Heat Pump Tracker tariff with discounted rates. 
• E.ON Energy is a Which? Trusted Trader offering Daikin, Mitsubishi and Samsung heat pump installations with seven-year manufacturers' warranties. 
• Good Energy is a Which? Trusted Trader offering Midea heat pumps with a 10-year warranty and remote monitoring, which it claims are '20% more efficient than industry standards on average'.
• Octopus Energy supplies survey, quote, installation and aftercare, including to non-customers. It offers an 8-year warranty on its own-brand heat pumps (5 years warranty on other brands), and also has a range of tariffs suited to heat pump owners.
• Ovo has partnered with installer network Heat Geek to offer heat pump installation. It also offers a 'Heat Pump Plus add-on' giving you cheaper electricity rates for the energy your heat pump uses.
• Scottish Power offers Daikin, Vaillant and Mitsubishi heat pumps with two years of annual servicing from Domestic & General. It also offers an off-peak heat pump tariff. 

Buying a heat pump from an independent installer

When it comes to finding an independent installer or company to install your heat pump, you need to make sure they are MCS (Microgeneration Certification Scheme) certified. This is necessary for them to apply for a government grant on your behalf (you can't do it yourself).

Installers certified by MCS agree to follow a code of conduct known as RECC (Renewable Energy Consumer Code). This means they should not use high-pressure selling techniques, nor should any subcontractors they employ.

Among other things, it means installers cannot quote you an inflated price and then offer you a discount if you buy immediately, or give you a discount if you agree to perform marketing activities for the business.

It also means they can't make unreasonable price projections, 'oversell' the heat pump by giving you misleading impressions about its performance, or refuse to give you price information during a visit to your property.

MCS hosts a database of MCS-certified contractors you can check. 

A Which? Trusted Trader is vetted by us and has verified reviews you can rely on. All Trusted Trader heat pump installers are MCS certified.

The installer base will need to grow in order to meet the demand the government is aiming for. 

In March 2024, the Heat Pump Association announced that the number of qualified heat pump installers had risen by 166% from just under 3,000 in 2022 to close to 8,000 in 2023.  We expect to see more installers in the future, especially as consumer demand for heat pumps continues to grow. 

If a heat pump isn't right for you just yet, read our reviews of the best gas and oil boiler brands.

Heat pump loans and green mortgages

Energy-efficient homes are increasingly seen as a good investment by lenders and we've seen a growth in so-called 'green mortgages' and low-interest loans by lenders for existing mortgage customers who want a low-carbon heating system. 

Green mortgages offer a specific interest rate on your mortgage, or cashback, when your home is energy efficient (generally measured by its EPC). It's available to homebuyers and people looking to remortgage.

Some offers also give existing mortgage customers loans with reduced interest rates or cashback to fund energy-efficiency improvements. This can help to pay for improvements necessary to get a good heat pump installation or even to buy the heat pump itself. 

Examples of offers by high-street banks include:

• Nationwide has a 'green additional borrowing mortgage' which offers between £5,000 and £15,000 on a two or five-year fix to fund improvements, including air source and ground source heat pumps, solar panels and insulation 
• Barclays offers a 'greener home reward' to its mortgage customers. £2,000 is available for low carbon heating installations, and lesser amounts for other works, such as £1,000 for solid wall insulation. 
• Halifax customers can get £1,000 cashback towards a heat pump or £500 for other 'green home improvements', such as insulation and solar panels.
• Virgin Money offers £250 cashback when you spend £2,500 on energy-efficient upgrades, including air source and ground source heat pumps. 

These loans can be added to the money provided by a government grant, such as the Boiler Upgrade Scheme (England and Wales) or the Home Energy Scotland Scheme.

Other trials of green finance projects are being funded by the Department for Energy Security and Net Zero, with a view to expand consumer access to finance for low carbon heating, and to improve the options for consumers.

Find out more about green mortgages.

Financing a heat pump

While you can get 0% APR loans for boiler installations from energy companies and installers that let you pay off your heating system over several years, this isn't as commonplace for heat pump installations.

However, E.ON Energy allows you to spread the cost of an air source heat pump with up to two years 0% APR interest free credit, or three, five, seven or ten years at 3.9% APR. Daikin offers a 0% interest loan for 12 months on all air source heat pumps installed under the Boiler Upgrade or Home Energy Scotland Schemes, if you pay a 20% deposit or more. 

In April 2025, the government announced a proposal to expand its Boiler Upgrade Scheme with more flexibility, potentially offering models that would spread out the up-front costs for homeowners. But this is still in the consultation stage so is not currently available.