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Heat pumps explained
What is a heat pump and how does it work?
Heat pumps can change the way you heat your home, while reducing your environmental impact. If your gas boiler is reaching the end of its life and you're considering getting a heat pump, this guide will talk you through what you need to know – how they work, the costs involved, how they stack up compared to gas boilers, plus government incentives.
There are different types of heat pump
There are several different types of heat pump, each working in a slightly different way, and varying in cost. Below we've explained the most common types used in the UK. Make sure you do your research and get a qualified professional to give you advice before making a decision on which is best for you.
Air source heat pumps (ASHP)
There are two types of air source heat pump:
- Air-to-water heat pumps. An air-to-water heat pump draws heat from the air outside your home, using a fan and compressor. It then raises the temperature of this heat using a refrigerant, which is then passed through a heat exchanger, transferring the warmth to your home's radiators or hot water tank (this is why its called an air to water heat pump). These are the most commonly used in the UK and benefit from the £7,500 Government grant.
- Air-to-air heat pumps. These are cheaper and are used to heat smaller homes, such as flats. Air-to-air heat pumps are effectively air conditioning units. They operate in the same way as air-to-water heat pumps, as they draw heat from the air outside, but instead of heating the water that flows to your radiators, it warms your home by blowing hot air inside your house.
As most homes are heated via radiators, that means if you have a traditional central heating system, you'll need to pay to have that removed. It also means you’ll need a separate system to heat water (such as an immersion heater or heat store powered by solar panels), making it less appealing for many households.
Air-to-air heat pumps can also be used as an air conditioning unit to cool your home in the summer, as it can switch between producing hot air and cool air. Unfortunately, though, this type of heat pump is not eligible for the Government grant.
Ground source heat pumps (GSHP)
A ground source heat pump is made up of a network of underground water pipes – also known as a ground loop – plus a heat pump at ground level. A mixture of water and anti-freeze is pumped around the pipes, to absorb the naturally occurring heat found underground.
The water mixture passes through a heat exchanger, which draws out the heat and transfers it to the heat pump. The heat is then transferred to your home heating system to be used in your radiators, hot water tank or underfloor heating.
This type of heat pump requires a lot of outdoor space and is much more expensive to install compared to an air source heat pump as deep trenches will need to be dug, or boreholes drilled. Even after the £7,500 government grant, you can expect to pay at least £10,000.
Water source heat pumps
Water source heat pumps are a type of ground source heat pump. They draw heat from a nearby water source, such as a pond, lake, or river. You'll need an appropriate route to lay underground pipes between your home and the water source, which makes this type of heat pump less common in the UK.
Hybrid heat pumps
A hybrid heat pump is a heating system that combines an air or ground source heat pump with a gas or oil boiler. It monitors the temperature outside your home and automatically chooses the most energy efficient option to keep your water hot and your home consistently warm.
Hybrid heat pumps do not benefit from the £7,500 government grant.
Which type of heat pump is right for me? tool
This tool has been developed by Nesta and The MCS Foundation to help people work out which type of heat pump might be suitable for their home.
Try the quiz to discover what heat pump options are likely to be best for your home.
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How does a heat pump work?
A heat pump uses the same technology as air conditioning and fridges but reversing the process for heating rather than cooling.
Here’s how a heat pump works:
Step 1: Heat from the air outside or from underground is drawn into your heat pump system.
Step 2: This heat is warm enough to cause the liquid in the heat pump to evaporate and turn into a gas.
Step 3: The gas is then compressed, which increases the pressure, and causes its temperature to rise.
Step 4: The heat is then transferred into your central heating system or hot water tank.
Step 5: As the heat is transferred into the home, the gas falls in temperature, causing it to return to a liquid.
Step 6: The cycle repeats until your home reaches the required temperature setting on your thermostat.
Quick questions:
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How much does a heat pump cost?
The cost of the heat pump will vary depending on the size of your home, your heating and hot water needs, and how much work is needed to adapt your existing heating system for a heat pump.
The Energy Saving Trust says an air source heat pump typically costs around £14,000, while a ground source heat pump can be double this, typically costing between £28,000 and £34,000. For comparison, a straightforward gas boiler replacement would cost around £4,000.
There is some government help to mitigate these high costs, as homeowners in England and Wales can get £7,500 towards an air source or ground source heat pump through the Boiler Upgrade Scheme.
Some energy suppliers are offering to reduce installation costs
Some suppliers, such as Octopus and Ovo, have offers which they claim can help further reduce the costs of installation (and some offer specialist tariffs aimed at cutting running costs).
- Octopus Energy's 'Cosy 6' is a 6kW heat pump (aimed at a typical three-bed home). If you get the £7,500 grant, and no additional work is required to your home, it won't cost you a penny. If additional work is needed, it says costs start from around £3,000.
- Ovo Energy has partnered with Heat Geek to install heat pumps from £500 (including the £7,500 grant).
So the £7,500 grant could cover the full cost of installation for some, but it's likely most households will need to spend at least some of their own cash.
Innovation charity Nesta has developed this nifty tool to help you get a ballpark figure for the cost of installing an air source heat pump for your home. But do note, this is still only a demo calculator and as such, it has some limitations – it can’t give a cost estimate for flats, for homes in Northern Ireland, or for very large or very small homes.
Heat pump grants and financial support
As part of the drive to reduce carbon emissions, the Government is offering grants of £7,500 to homeowners in England and Wales, to help towards the cost of installing a heat pump in your home.
To be eligible for the Boiler Upgrade Scheme, you must be replacing an existing fossil fuel system, such as a gas or oil boiler, or electric heating, and your home must have a valid Energy Performance Certificate (EPC). You can get a grant for an air or ground source heat pump, not a hybrid heat pump.
For full information including who's eligible and how to apply, read our Heat pump grants guide.
How does the cost of running a heat pump compare to a gas boiler?
Your running costs will depend on what type of heating system you're replacing and what you pay for your electricity (see our Should you fix? guide for a list of available tariffs and use our Cheap Energy Club for a bespoke comparison).
About three-quarters of homes are currently heated using gas, yet it's tricky to directly compare the two. Heat pumps are typically three times more efficient than a gas boiler, but they run on electricity, which is more expensive than gas.
If you have an old inefficient boiler or electric storage heaters, the annual savings could be significant.
According to the Energy Saving Trust, an air source heat pump in a three-bedroom semi-detached house could save households £240 a year compared to an old inefficient gas boiler – but this saving could be as much as £1,900 if you currently have old electric storage heaters.
Existing type of boiler |
Annual saving with an air source heat pump | Annual saving with a ground source heat pump |
Old (G-rated) gas boiler | £240 | £440 |
New (A-rated) gas boiler | -£20 | £50 |
Old electric storage heaters | £1,000 | £1,700 |
New electric storage heaters | £600 | £1,100 |
Old (G-rated) oil boiler | £410 | £800 |
New (A-rated) oil boiler | £65 | £220 |
Old (G-rated) LPG boiler | £750 | £1,200 |
New (A-rated) LPG boiler | £340 | £600 |
Coal | £700 | £1,300 |
Some energy suppliers are now offering specific heat pump tariffs
Some electricity providers are starting to launch innovative electricity tariffs, specifically designed for homes with a heat pump. Some work in a similar way to Economy 7 (or other time-of-use tariffs), where the rate you pay for your electricity is different depending on the time of day. Do be aware that the peak prices can be 60% more than the standard Price Cap rates. Others charge you a cheaper rate purely to power your heat pump.
You'll need a working smart meter to get these tariffs. As these are variable, there are no exit fees so you can switch to another tariff or energy provider whenever you want.
Comparing these tariffs can be tricky. You can do an energy comparison via our Cheap Energy Club to see the cheapest fixed deals, but will then need to compare those rates against the rates with the tariffs below.
- British Gas is offering its customers 12 months of discounted electricity to power a heat pump. You must purchase your heat pump before 30 September 2024 in order to get the 14p/kWh rate, and you must pay by Direct Debit. For more details see British Gas's heat pump offer.
- EDF Energy has launched its Heat Pump Tracker Tariff, which gives you two off-peak periods, between 4am and 7am, and 1pm and 4pm, where you can benefit from cheaper electricity rates for all your household electricity.
- Good Energy has launched its Heat Pump tariff, which gives you seven hours of off-peak electricity at 10p/kWh, across two periods of the day (5am to 9am and 1pm to 4pm). Outside of these times, you'll be charged 29.77p/kWh. The tariff is fixed until November 2025.
- Octopus Energy has launched its 'Cosy Octopus' tariff for homes with a heat pump. There are three different rates each day. There's a cheap off-peak rate (50% below Octopus' standard variable rate for your region) from 4am to 8am, 1pm to 4pm, and 10pm to 12am, and a more expensive peak rate from 12am to 4am and 8am to 1pm (45% above its standard variable rate). Any energy used at all other times is charged at its standard variable rate. You can check rates for your region on the Octopus website.
You don't necessarily need to sign up to Octopus's heat pump tariff to take advantage of cheaper electricity. The supplier has several innovative smart tariffs available, such as:
Intelligent Octopus Go (or Octopus Go, depending on the type of EV and charger you have) – designed for those with an electric vehicle and charger, as you can make use of the cheap off-peak rate to power your heat pump.
If you have solar panels and battery storage, Octopus Flux or Intelligent Octopus Flux could be worth considering. If you have both a heat pump and solar panels, but no battery storage, you can pair Cosy Octopus with Outgoing Octopus.
- Ovo Energy has introduced its 'Heat Pump Plus' tariff which is an add-on to any of its other available tariffs. The add-on allows its customers who've had a heat pump installed through Ovo's partner Heat Geek, or customers who already have a connected Vaillant aroTHERM or aroTHERM Plus air source heat pump, to power their heat pump at a rate of 15p/kWh – roughly half the price of the Price Cap electricity rate.
The price of your electricity to power the rest of your home will depend on which Ovo tariff you're on. You can register your interest in a heat pump via the Ovo website. You can also combine this tariff with Ovo's electric vehicle tariff add-on or solar energy tariff.
Some households might not save big – but heat pumps are much more environmentally friendly
We've mainly looked at the cost of a heat pump and whether it could save you money on your energy costs when replacing a gas boiler. Yet while it's possible to make savings on the running costs (taking the costs of installing them out of the equation), for those with more efficient boilers, it won't likely save you much right now – and it could even mean higher costs.
But beyond the cost, they are a more eco-friendly form of heating – they don't burn fossil fuels to run, and instead use electricity which can be generated from renewable sources. If that's a key consideration for you, then the lack of savings might not concern you when looking to replace your current boiler.
What are the benefits of a heat pump?
Heat pumps offer several benefits – the key one being their 'greener' environmental impact – making them an attractive choice for heating your home. However, there are some downsides you need to be aware of too. Here are some of the key pros and cons of a heat pump:
Pros of heat pumps
- Can significantly reduce your home's carbon footprint.
- Don't need much maintenance once they're installed.
- No need for a fuel delivery like oil, LPG, gas bottles, or wood for biomass.
- Can be paired with solar panels.
- Suitable for any age property.
- If you're replacing an old, inefficient boiler, they can offer decent savings on your energy bill.
- Off-grid homes will no longer need storage space for fuel on your property, and it reduces the risk of fuel leaks and theft.
Cons of heat pumps
- Generally more expensive to install than boilers (often even with the government grant).
- Some properties may need to upgrade some of their radiators.
- Can take up a lot of space.
- Can blow colder air into the area immediately around them.
- Not as widespread currently, so fewer plumbers are able to service them.
- Currently little savings (if any) to run compared to newer boilers.
- You'll need a hot water cylinder for storing your home's hot water (or an alternative hot water supply).
How to get a heat pump for your home
Step 1: Do you research
You can use the Government's heat pump checker to see if a heat pump could be suitable for your home. If it is, do your research and get advice from independent sources, as to what type of heat pump would work best for you, whether you need planning permission (most won't), and understand the possible installation and running costs.
Step 2: See if you can get help with the installation costs
Homeowners in England and Wales can get £7,500 towards an air source or ground source heat pump through the Boiler Upgrade Scheme.
If you live in Scotland, you may be eligible for an interest-free loan or a grant to make your home more energy efficient}.
There aren't currently any grants available for heat pumps if you live in Northern Ireland, but you may be able to get funding for other energy efficiency measures for your home.
Step 3: Find a trusted installer
It's best to choose a certified installer and system that are both accredited through the Microgeneration Certification Scheme (MCS) – your installer must be MCS certified to be eligible for the £7,500 government grant. Make sure to get quotes from at least three installers to ensure you get the best deal.
What to do if you have problems with your heat pump installation
Step 1: Speak to your installer
If you experience problems with your new heat pump system, such as performance issues, faults, or safety concerns, the first thing to do is speak to your installer.
Send a formal complaint to the installer who carried out the work. They have 14 days from receiving your letter to resolve the issue(s).
Step 2: Get help from the Microgeneration Certification Scheme
If your installer can't or won't help, you can get help from the Microgeneration Certification Scheme (MCS). The MCS has a list of what issues are covered by the scheme. You'll then need to complete and submit its “Something's Gone Wrong” form.
If you haven’t heard back from MCS within five working days, get in touch with them. You can call the MCS helpdesk on 0333 103 8130 or email hello@mcscertified.com.
Your rights are also protected by a number of codes, set up to safeguard consumers in renewable energy sectors. There are organisations like the Renewable Energy Consumer code (RECC) and the Home Insultation and Energy Systems Contractor Scheme (HIES) which can also help.
If your installer is MCS certified (which is has to be to get the Government grant), it's a condition that they must be a member of one of these organisations. The MCS can tell you when to get in touch with them.
Heat pump tips
If you're set on getting a heat pump, then these tips will help you keep it running efficiently and help keep your costs down.
Have your say in our forum!
This is the first incarnation of this guide so if you've any feedback or tips you think we should add, please let us know in the Heat pumps forum thread.
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