Heat Pump Cost Calculator UK

How Much Does a Heat Pump Cost in the UK?

A fully installed air source heat pump costs £8,000 to £14,000 before grants. After the government's £7,500 Boiler Upgrade Scheme (BUS) grant, most homeowners in England and Wales pay between £500 and £6,500, comparable to a new gas boiler at £2,000 to £4,500.

Here is a breakdown by property size:

Air Source vs Ground Source Heat Pumps

These are the two main types of heat pump available to UK homeowners and they differ significantly in installation cost and site requirements.

Air source heat pumps (ASHP) extract heat from outdoor air and are the most common residential choice in the UK. They require an outdoor unit, roughly the size of an air conditioning unit, in a garden, driveway or side access. Installation typically takes two to four days and is suitable for most properties. ASHP is the type eligible for the standard £7,500 BUS grant.

Ground source heat pumps (GSHP) extract heat from the ground via buried pipe loops. They achieve higher efficiency (SCOP of 3.5 to 5.0 versus 2.5 to 3.5 for ASHP) but cost considerably more: £20,000 to £35,000 installed before grants, depending on whether horizontal trenches or vertical boreholes are used. Vertical boreholes cost more but require less land. GSHP installations also qualify for the £7,500 BUS grant.

For most UK homes, an air source heat pump is the practical and cost-effective starting point. Ground source is worth considering for properties with ample outdoor space, poor gas grid connectivity or where long-term running cost optimisation is the priority.

The £7,500 Boiler Upgrade Scheme

The Boiler Upgrade Scheme is the most impactful financial incentive available for UK heat pump buyers in 2026. It is administered by Ofgem with a £2.7 billion budget running to 2030.

How the grant works: Your MCS-certified installer applies on your behalf. The £7,500 is deducted directly from your installation invoice, you never handle the money and there is no means-testing or income threshold. The grant is available to any homeowner in England or Wales replacing a fossil-fuel heating system.

Eligibility requirements: Your property must be an existing home in England or Wales, have a valid EPC issued within the last ten years and any outstanding loft or cavity wall insulation recommendations on the EPC must have been completed. Your installer must hold current MCS (Microgeneration Certification Scheme) accreditation.

Updated grant amounts from July 2026:

• Air source heat pump (replacing gas): £7,500
• Air source heat pump (replacing oil or LPG): £9,000
• Ground source heat pump: £7,500
• Air-to-air heat pump: £2,500 (new from April 2026, one grant per property)

Scotland: Home Energy Scotland runs a parallel scheme, £7,500 cashback grant (up to £9,000 with the rural uplift for remote and island areas), plus an optional interest-free loan of up to £7,500.

Low income households: The ECO4 scheme (extended to December 2026 across England, Scotland, and Wales) may provide a fully funded heat pump to households receiving qualifying benefits.

Heat Pump Running Costs vs Gas Boiler

This is where the comparison gets nuanced and where many homeowners are surprised.

On the standard Ofgem rates from 1 July 2026 (electricity at 26.11p/kWh, gas at 7.33p/kWh), a heat pump running at a Seasonal Coefficient of Performance (SCOP) of approximately 3.6 produces running costs broadly similar to a gas boiler. The electricity-to-gas price ratio currently sits at around 3.6:1, which roughly matches what you need your heat pump to achieve to break even on running costs.

What tips it in the heat pump's favour: Switching to a dedicated heat pump electricity tariff, such as Octopus Cosy, E.ON Next Pumped or EDF Heat Pump Tracker, brings your effective off-peak electricity rate to between 10p and 17p per kWh during specific windows. This shifts the running cost comparison firmly in favour of the heat pump.

What tips it against: If your home is poorly insulated (EPC D or below), a heat pump may achieve a SCOP below 3.0, at which point it runs more expensive than gas. Insulation is the single biggest determinant of heat pump economics.

Here is a realistic annual running cost comparison for a typical three-bedroom house:

Additional Costs to Factor In

The headline installation figure does not always include everything. These are the additional costs that commonly apply:

Radiator upgrades: Heat pumps run at lower flow temperatures (45–55°C versus 65–75°C for boilers). Smaller radiators may not deliver enough heat at these lower temperatures and may need upsizing. Budget £120 to £220 per radiator fitted. A typical three-bedroom semi needs four to six radiator upgrades, roughly £600 to £1,300.

Hot water cylinder: Most heat pump systems require a separate hot water cylinder if your current boiler is a combi. A new cylinder costs approximately £800 to £1,500 installed.

Electrical upgrade: If your property has an older consumer unit or insufficient electrical capacity, an upgrade may be required. This typically costs £500 to £1,500.

Annual service: Heat pumps require an annual service, similar to a gas boiler service, costing approximately £100 to £200 per year. Unlike a gas boiler, there is no Gas Safe registration requirement, but you should use an F-gas certified engineer for refrigerant checks.

Is Your Home Ready for a Heat Pump?

Heat pumps work best in well-insulated homes. If your property currently has an EPC rating of C or above, you are well-placed. If it is D or below, addressing insulation first, or alongside the heat pump installation, significantly improves both efficiency and running cost savings.

As a minimum before installing a heat pump: ensure your loft has at least 270mm of insulation, cavity walls are filled if the property has them and your hot water cylinder is appropriately sized and insulated.

If your EPC recommends loft or cavity wall insulation, you will need to complete that work before qualifying for the BUS grant. Some installers will arrange or coordinate this work alongside the heat pump installation.

Planning Permission and MCS Certification

Air source heat pumps are permitted development in England in most cases, meaning no planning permission is required, provided the unit is under 1m³ in volume, positioned more than 1 metre from a property boundary, not on a wall or roof facing a public highway and meets noise conditions of 42dB(A) at one metre from a neighbour's window. Listed buildings and conservation areas may have additional restrictions.

You must use an MCS-certified installer to qualify for the BUS grant. Check your installer's certification at the MCS installer directory before signing any contract. An uncertified installation, however competitively priced, does not qualify for the grant and cannot benefit from any future government incentives tied to MCS accreditation.

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References & Authorities

• GOV.UK Boiler Upgrade Scheme (BUS) Official Guidance
• Ofgem Boiler Upgrade Scheme Statistics & Regulations
• Energy Saving Trust Air Source Heat Pump Advice
• Microgeneration Certification Scheme (MCS) Installer Directory