Installation costs
- New gas boiler: Typically costs £2,000–£4,500 to be installed, depending on the boiler, property and complexity of the task at hand. There is generally no government grant for a like-for-like gas boiler replacement.
- Air source heat pump with the £7,500 BUS grant: After the Boiler Upgrade Scheme (BUS) grant, the net installation cost can typically be around £3,000–£8,000, depending on the size and requirements of the property. The BUS currently provides £7,500 towards an eligible air-to-water or ground-source heat pump. Eligible off-gas-grid homes replacing oil or LPG heating can receive up to £9,000.
- Air source heat pump without a grant: A typical installation can cost around £10,000–£16,000 before grant funding, depending on system size, radiators, hot water requirements and installation complexity. Without financial support, the higher upfront cost can make the financial case harder to justify.
Running cost comparison (3-bed semi, 15,000 kWh annual heat demand)
- Gas boiler at 90% efficiency: Approximately £1,222/year, based on a gas price of 7.33p/kWh.
- Heat pump at CoP 2.8 on a standard electricity tariff: Approximately £1,399/year, based on an electricity price of 26.11p/kWh — slightly higher than the gas boiler example.
- Heat pump at CoP 3.2 on a specialist electricity tariff: Approximately £891/year, using an illustrative effective electricity rate of 19p/kWh — potentially cheaper than the gas boiler example.
The financial case for a heat pump vs gas boiler can be compelling, but it depends on the whole system rather than the heat pump alone. A well-insulated home can reduce heat loss, while correct system sizing, efficient operation at a suitable flow temperature and a competitive electricity tariff can all improve heat pump running costs. Heat pump efficiency varies with factors including flow temperature and outdoor temperature, so real-world savings will differ between homes.
In practice, three things matter together: a suitable home, a properly designed and installed heat pump, and an electricity tariff that works with the system.
