Air source heat pump running cost: Potential savings?
November 23, 2023
Recent calculations indicate that households can achieve significant cost savings by capitalising on government grants for air source heat pump installations. With the potential to lower upfront costs and ongoing energy bills, this winning combination offers an enticing alternative to traditional gas or oil boilers.
While the upfront cost of a heat pump installation might seem steep, government schemes are in place to reduce this financial barrier. A £7,500 discount is now available, making heat pumps more accessible and for some they can get free installation. However, concerns about running costs persist, primarily due to electricity being more expensive than gas.
It’s true that electricity costs more per unit than gas, with the current price cap at 29p/kWh for electricity and 7p/kWh for gas. To match the running costs of gas central heating, a heat pump would need to be three times as efficient. This raises questions about their feasibility and performance in colder weather.
Apply for the ECO4 grant: People eligible get free a heat pump, solar panels and insulation installation.
Heat pump running cost
Now, let’s explore the potential costs associated with having heat pumps for home heating. A heat pump is three times as efficient as other heating methods because it produces three units of heat for every unit of electricity it uses.
Considering an electricity price of £0.27 per kWh, the annual cost for heating and hot water using a heat pump would be £879.66. Notably, this calculation excludes a standing charge for electricity, assuming it’s already covered.
Heat Pump Annual Heating Cost Compared to LPG, Oil Boiler and Gas Boiler.
Why heat pumps can be cheaper to run:
1. Efficiency: Heat pumps are super-efficient. They move heat into your home using way less electricity than burning gas in a boiler.
2. Fuel Costs: Gas prices in the UK are rising. Electricity for heat pumps is more stable and can even be cheaper with green energy plans.
3. Good for the Environment: Heat pumps produce fewer emissions than gas boilers, which can save you money and might get you some eco-friendly benefits.
4. Less Maintenance: Heat pumps usually need less fixing than gas boilers, which means less money spent on repairs in the long run.
Home Size: The larger your home, the more energy the heat pump may require.
Insulation Quality: Well-insulated homes retain heat more effectively, influencing the pump’s energy consumption.
Preferred Temperature: The desired indoor temperature also plays a role in determining energy usage
Energy Efficient Boiler: Modern boilers are more efficient than older boilers.
How does an air source heat pump work?
Air source heat pumps use the same type of technology that keeps fridges cold, but in reverse.
Heat energy is taken from the outside air temperature and turns into gas as it warms up. Air source heat pumps still work perfectly even below -1°C outside temperature.
Name of grant
What it is
The ECO4 scheme targets the lowest-efficiency homes across the UK. Eligible homes can receive property insulation, solar panels and a heat pump for FREE.
People on a specific list of benefits
The Boiler Upgrade Scheme (BUS)
The BUS scheme if for homes using fossil fuels, there is a discount voucher available to make the switch to a renewable energy solution. This includes biomass, air-source heat pumps (ASHP) and ground-source heat pumps (GSHP).
Homeowners and certain types of landlords
Home Upgrade Grant (HUG)
The HUG scheme commonly funds loft insulation, sometimes cavity wall insulation, and occasionally under-floor insulation. Depending on your property, a heat pump may be recommended under the scheme too.
The 1st of February saw the VAT of domestic energy storage systems cut, following an announcement in December last year
February 7, 2024
Energy Advice Helpline is a non-profit Community Interest Company that provides support and advice on rising energy costs. Our goal is to assist people by offering guidance, signposting to other relevant services, and providing information on available options for reducing energy bills and accessing Government support.