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.

Who's this guide for? Anyone who is considering having a heat pump installed.

Other related guides... Heat pump grants | EV tariffs | Solar panels | Cheap green energy | See all our Energy guides

Thanks to Jo Alsop of Warmur for fact-checking and feedback on our new guide.

What is a heat pump?

air source heat pump unit

A heat pump is a form of 'low-carbon' central heating. They run on electricity, which can be generated from renewable sources. They work by essentially capturing heat from outside your home, heating it up and transferring it inside your home. 

A heat pump works in a similar way to a boiler in a central heating system, but instead of burning fuel to generate heat, it uses naturally occurring heat from the ground or air outside. 

Heat pumps have been touted as an environmentally friendly alternative to gas or oil boilers, as they don’t burn fuel, and so release a lot less carbon dioxide. The two most common types of heat pump are air source and ground source

You can use the Government's heat pump checker to see if a heat pump could be suitable for your home.

Traditional gas boiler are being phased out – heat pumps will be one of the main alternatives

The Government is phasing out the installation of new oil and gas boilers, as part of its plan to reduce the UK's carbon emissions, and meet its net-zero target.

Although there has been talk of banning the sale of new oil and gas boilers by 2035, this is not set in stone. For now, the Government is trying to incentivise households to switch to greener alternatives to oil and gas boilers, by offering grants to install heat pumps} under the Boiler Upgrade scheme.

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.

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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:

diagram showing how a heat pump process 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:

  • What is the lifespan of a heat pump?

    As heat pumps are fairly new technology, it's difficult to say how long they'll last, but typically, you'd expect the lifespan of a heat pump to be similar to that of a modern gas boiler. Make sure you choose a good-quality heat pump from a reputable manufacturer, and have it installed by a trained professional to ensure optimal performance and longevity.

  • Do heat pump work in extreme temperatures?

    Heat pumps can still work in extreme hot or cold temperatures, but they'll become less efficient as the temperature drops. Most air source heat pumps are designed to operate efficiently in temperatures as cold as -15°C, and in some cases, even lower.

  • How much electricity does a heat pump use?

    Heat pumps are significantly more efficient than other heating systems because they use energy from the environment rather than from burning fossil fuels.

    In general, a heat pump will produce around three to four times more energy than it takes in – meaning it can create three kilowatts of heat from every one kilowatt of electricity. So you might see a heat pump being referred to as 300% efficient, whereas an A-rated gas boiler has an efficiency of around 85%.

    Given the average home in England and Wales typically uses around 10,000 kilowatt hours of gas to heat their homes each year, a heat pump would use less than 3,500kWh of electricity to produce this.

    Obviously, this will vary depending on the size of your home, how well insulated it is and how much hot water you use. It's also worth nothing that electricity unit rates are generally more expensive than gas, so while heat pumps are more efficient, that doesn't necessarily mean they are cheaper to run. 

  • Where can the outside unit go?

    For an air-source heat pump, the unit is quite large and needs to be fitted to a wall or placed on the ground next to your home. It'll need some space around it for good airflow.

    For a ground-source heat pump, much of the system needs to be installed underground, so you need some outside space on your property.

  • Will I need planning permission to get a heat pump?

    You won't usually need planning permission as a heat pump is classed as a permitted development.

    However, you will need planning permission for larger units over 0.6 meters cubed, and if being installed within one meter of your property's boundary. Extra restrictions are in place for listed buildings. You may also need to get planning permission if you want to install more than one heat pump, or live in a conservation area or in a listed building. The Government is currently reviewing these requirements with a view to making it much easier to fit heat pumps without planning permission.

  • Is it possible to install a heat pump if you live in a flat?

    If you live in a flat (or terraced house) with a garden or balcony, it's possible to have an air source heat pump installed – as long as the outside space is at least one square metre (that's roughly the size of the heat pump unit).

    If you don't have a balcony or garden, it's still possible to have a heat pump, but the outdoor unit needs to be attached to the outside wall of the flat, similar to an air conditioning unit and it would need to be easily accessible for any maintenance work to be carried out.

    The only option if you live in a block of flats is to have a shared ground source heat pump installed, which is then connected to individual indoor units within each flat. In this situation, it's up to the freeholder of the building to decide if they want it.

    If you don't own your home, you'll need to get permission from the property's freeholder, which may not be easy.

    Over the coming years, the Government is planning to expand the UK's heat network system so that 20% of homes, including blocks of flats, can be moved to a clean heat network, whereby a large heat pump or other clean energy source supplies the block or even a whole town.

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How much does a heat pump cost?

air source heat pump unit

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.

  • You may need to replace some radiators and get a hot water tank

    While a heat pump will work with standard radiators that you'd typically have with a gas boiler, they might not always be suitable. Heat pumps generally operate at a lower temperature, so they generally work better with larger radiators, as a greater surface area enables more heat to be transmitted. It's worth asking your installer if you need larger radiators before you go ahead, and then working out if the extra cost is right for you.

    You may want to factor in changing some of your radiators anyway, and adding more insulation to your home to ensure your heat pump can work to its full potential – but this can add thousands to the overall cost, but should bring down your annual running costs. Sometimes changing just a few radiators can have a big impact on your heat pump's performance, so could be worth the extra investment.

    Many modern heat pumps can work at high temperatures, so its not always necessary to replace your radiators. Check with your installer what's best for your home and your budget.

    Plus, if you replace your combi-boiler with a heat pump, you'll need some way of heating and storing your home's hot water supply.

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?

comparing costs in jars

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 £260 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.

Heat pump savings compared to other heating systems

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 £260 £480
New (A-rated) gas boiler -£30 £50
Old electric storage heaters £940 £1,900
New electric storage heaters £680 £1,200
Old (G-rated) oil boiler £335 £690
New (A-rated) oil boiler -£15 £120
Old (G-rated) LPG boiler £580 £990
New (A-rated) LPG boiler £195 £410
Coal £660 £1,300

Figures are based on fuel prices as of April 2024, for England, Scotland and Wales.
Source: Energy Saving Trust. 

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. 

  • 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.

  • Maintenance costs are fairly low

    Heat pumps operate at much lower temperatures than traditional gas boilers, plus they have fewer moving parts, so they tend to be cheaper to maintain. They also have a longer life expectancy of around 20 years compared to gas boilers, which usually need replacing after around 10 to 15 years.

    According to the Eco Experts, getting your air source heat pump serviced will cost you between £150 to £200 (depending on the company you go with and the size of your heat pump).

    Most heat pumps will come with a warranty as standard, but it'll usually require you to have your system serviced every year for it to be valid.

    The most important part of looking after your heat pump is to keep it clean and make sure the airflow isn’t being obstructed. See more ways to keep your heat pump running efficiently.

  • There could be much bigger savings if you have electric storage heaters

    The Energy Saving Trust estimates that households with electric storage heaters could make significant savings by switching to a heat pump, compared to those with gas boilers - as much as £960 a year for a typical three-bedroom house.

  • Will I still need gas?

    If you only used gas to power your boiler, and replace it with a heat pump system, it's likely you'll just need an 'electricity only' tariff, not a dual-fuel tariff. 

    See our Is it time to fix my energy? guide to see what tariffs are current available, or use our Cheap Energy Club for a bespoke comparison.

    If you're completely disconnecting your gas supply, you need to contact your energy supplier, who will arrange for your gas meter to be removed. If you also need your property's gas pipe removed, you'll need to contact your gas distribution network operator - but it may charge you a fee for this.

    Remember, if you don't have any gas connection at all, you'll save on gas standing charges, which is currently £108 a year on average.

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.

  • If you regularly turn the temperature up and down to regulate the temperature in your home, your heat pump will use more power. So it's better to set the thermostat to a comfortable temperature and try not to change it, as your system will require less power to maintain a constant temperature.

    Try turning the set temperature down in one-degree increments throughout winter until you're happy with your home's warmth.

  • Under building regulations in the UK, hot water cylinders should keep your water at 60°C to protect against harmful legionella bacteria growing.

    If your bills are high, it may be because your hot water temperature has been set too high, which means your heat pump will be using more electricity than it needs to get your water to the right temperature.

  • Dirty or blocked filters restrict airflow through a heat pump system, and so making it work inefficiently. Make sure there's no grass, stray leaves, dirt, or other debris around your heat pump.
     
    You may also need to de-ice your unit during winter months. Some models actually have a defrost setting that gradually melts the ice to help with this issue.
     
    You should also get your system serviced regularly (The Eco Experts suggest every two to three years, but it can be annually, especially if your warranty requires it).
  • The pressure in your air source heat pump might get low at times, which means you may need to top up the refrigerant levels.

  • If you have home emergency breakdown insurance, make sure you check the small print, as your heat pump may not be covered. 

    Some insurers will cover your heat pump in the event it breaks down, but only under certain conditions. While other providers explicitly exclude air and ground source heat pumps from their home emergency cover policy. For some providers, you may need to choose heat pump breakdown repairs as an add on to your home emergency cover - although not all insurance providers offer this option - it depends on your policy, so do check. For more on insurance see our Home Insurance guide.

    If you have home emergency cover, you should check for exclusions and terms and conditions that apply to cover heating appliances, otherwise you may face significant repair costs if your heat pump ever breaks down.

     

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