Heat Pump Running Cost Calculator Trending

Heat pumps extract heat from outdoor air (air source) or the ground (ground source) and deliver it to your home. They are highly efficient, producing 2.5 to 4 units of heat for every unit of electricity consumed. This ratio is the Coefficient of Performance, so a heat pump with a COP of 3 produces 3 kWh of heat for each 1 kWh of electricity used. Air source units manage that using a refrigeration cycle rather than combustion and keep working down to -15°C, while ground source machines reach a COP of 4 to 5 because the ground holds a steadier temperature.

An air source heat pump (ASHP) typically costs £8,000 to £15,000 installed, rising to £12k to £18k on a five-bedroom house, while a ground source heat pump (GSHP) costs £15,000 to £35,000 including ground works, with the installation alone at £20k to £30k. In England and Wales the Boiler Upgrade Scheme pays £7,500 towards either (£2,500 for an air-to-air heat pump), plus £1,500 until March 2027 for off-gas-grid homes heated by oil or LPG, and the Warm Homes Plan funds it to 2030. That brings a typical ASHP down to roughly £500 to £7,500. Against a replacement gas boiler at £3k to £4k, the net difference runs from about £3,500 in the heat pump's favour to £4,500 against it.

Running costs depend on your electricity tariff and the heat pump's seasonal COP. At the October to December 2026 cap of 26.32p per kWh for electricity and a SCOP of 3, the effective heating cost is 8.8p per kWh of heat, compared with 8.9p per kWh from a 90% efficient gas boiler burning gas at 7.97p. A better installation with a SCOP of 3.5 brings the heat pump down to 7.5p. On a standard tariff the two are therefore close to level, with a well-designed heat pump slightly ahead while electricity carries no VAT (1 October 2026 to 31 March 2027).

Enter your floor area (the calculator assumes a heat demand of 120 kWh per m² a year), the COP you expect and your fuel prices, and you get annual running costs against your existing heating along with the payback on the installation after the grant. The tariff moves that answer more than anything else. On a time-of-use tariff such as Octopus Cosy, which is cheap in the morning and evening and expensive at midday, a heat pump runs 20 to 30% cheaper than a gas boiler. Paired with solar panels it costs almost nothing to run in summer, when heating demand is low in any case. Insulation matters more than the heat source itself, because a poorly insulated house is expensive to heat whatever is producing the heat, and a hybrid system working alongside an existing gas boiler makes a reasonable transitional step.

Taking the grant and the running-cost difference together, payback typically lands somewhere between 5 and 15 years, driven mostly by tariff and insulation. Policy is pushing in one direction, with the government's Heat in Buildings strategy aiming to phase out new gas boiler installations from 2035, which is why heat pumps are shifting from unusual to routine.

The physical requirements are worth checking before you go any further. The outdoor unit needs a space of roughly 0.8m by 1.0m by 0.6m, ideally 1m from the boundary, and runs at 40 to 60 dB at 1m, which is quieter than a gas boiler in most homes. Indoors you need a hot water cylinder, since heat pumps work best with a tank rather than a combi. Poorly insulated homes usually need radiators 1.5 to 2 times their current size, adding £1k to £3k. Underfloor heating suits them particularly well, running at a flow temperature of 35 to 45°C against the 65 to 75°C radiators expect. In England, installations under 0.6m³ generally fall within permitted development rights.