{"id":9285,"date":"2023-09-05T10:57:08","date_gmt":"2023-09-05T10:57:08","guid":{"rendered":"https:\/\/www.mouthymoney.co.uk\/?p=9285"},"modified":"2025-03-03T09:08:45","modified_gmt":"2025-03-03T09:08:45","slug":"will-a-heat-pump-save-you-money","status":"publish","type":"post","link":"https:\/\/www.mouthymoney.co.uk\/mortgages\/will-a-heat-pump-save-you-money\/","title":{"rendered":"Will a heat pump save you money?"},"content":{"rendered":"\n

Investigating heat pumps: Nick Daws delves into the costs, efficiency and other crucial factors for adoption.<\/h3>\n\n\n\n
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As you probably know, the Government is pushing the heat pump hard as a method for reducing pollution and carbon emissions and achieving its Net Zero target. But what are heat pumps, and what do they cost to install and run?\u00a0<\/p>\n\n\n\n

In this article I will aim to answer these questions, and assess whether these products make sense from a financial perspective.<\/p>\n\n\n\n

What is a heat pump?<\/h3>\n\n\n\n

Heat pumps are devices that extract heat from the outside and use it to power heating and hot water. There are two main types, air source and ground source. The main difference between them is that air source heat pumps get heat from the air, while ground source heat pumps get it from the ground. <\/p>\n\n\n\n

Air source heat pumps are easier to install than ground source because they don\u2019t require any groundwork. They can be installed on a wall or on the ground outside your home. They are also cheaper than ground source heat pumps. They are less efficient, however, because they rely on the temperature of the air outside. When it\u2019s cold outside – which of course is when you need the heat most – their efficiency is reduced.<\/p>\n\n\n\n

Ground source heat pumps are more expensive than air source because they require more groundwork. They are more efficient, however, as they rely on the temperature of the ground, which is more consistent than the temperature of the air outside. <\/p>\n\n\n\n

Ground source heat pumps can be installed in two ways, horizontally or vertically. Horizontal installations require more outside space so won\u2019t be suitable for everyone. But they are cheaper than vertical installations, which involve drilling 90-160 metres down into your garden using specialized (expensive) equipment.<\/p>\n\n\n\n

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More from Nick Daws on Mouthy Money<\/a><\/p>\n<\/blockquote>\n\n\n\n

What does a heat pump cost to install?<\/h3>\n\n\n\n

According to heat pump specialists Ecoexperts<\/a>, an air source heat pump can cost between \u00a37,000 and \u00a314,000 to purchase and install, while a horizontal ground source heat pump can cost between \u00a315,000 and \u00a335,000. <\/p>\n\n\n\n

If you need a vertical installation ground source heat pump – maybe because there isn\u2019t room in your garden for a horizontal one – the average cost (again according to Ecoexperts<\/a>) is an eye-watering \u00a349,000.<\/p>\n\n\n\n

Until 2025, homeowners who opt to install a heat pump can apply for a grant of up to \u00a35,000 as part of the Government’s Boiler Upgrade Scheme (increasing to \u00a37,500 from 23rd October 2023). This obviously reduces the cost significantly.<\/p>\n\n\n\n

It\u2019s not all good news, though. Even after the grant is deducted, a heat pump is still likely to be more expensive to buy and install than a new gas boiler. The price of the latter is typically from \u00a31,000 to \u00a33,000 (though currently the government plans to ban the sale of new gas boilers from 2035).<\/p>\n\n\n\n

There will likely be additional costs too, which may be substantial. For starters, because standard heat pumps can only heat water to a maximum of 65C compared with the 75C of a traditional gas central heating system [source<\/a>] many houses will need extra insulation to stay warm enough. <\/p>\n\n\n\n

This will of course save you money in the longer term, but can still cost thousands of pounds. For older properties especially, insulating for energy efficiency can also sometimes cause damp and condensation problems. [source<\/a>]\n\n\n\n

In addition, you are likely to need bigger radiators in some or all rooms. This can cost up to \u00a33,000 plus the price of installation. Alternatively you may be advised to install underfloor heating (which again is costly, not to mention the disruption it will cause). In addition, if you don\u2019t currently have a hot water cylinder, you will probably need to get one. The same applies if your current hot water cylinder isn\u2019t heat pump compatible.<\/p>\n\n\n\n

All of this means that buying and installing a heat pump is likely to be expensive. So how long will it take for the savings to kick in? Let\u2019s look at this in more detail\u2026<\/p>\n\n\n\n

What do they cost to run?<\/h3>\n\n\n\n

Although heat pumps use heat naturally present in the air or in the ground, they still  require electricity to operate. They certainly aren\u2019t free to use, therefore.<\/p>\n\n\n\n

How much heat pumps cost to run is a somewhat controversial question. Some suppliers, regrettably, have been known to exaggerate the potential savings on offer. <\/p>\n\n\n\n

The figures quoted vary considerably, but Ecoexperts<\/a> (mentioned earlier) say that for a three-bedroom household the running costs for a heat pump (ground source or air source) will typically come to around \u00a31,200 per year. By contrast, they say the running costs for a traditional gas boiler will be around \u00a3900, or \u00a3300 cheaper.<\/p>\n\n\n\n

So in the short term, savings are unlikely. In the longer term, though, the cost of electricity is likely to fall relative to gas – if not naturally, then through taxes and subsidies. Even so, it will likely be decades rather than years before you see any overall saving. <\/p>\n\n\n\n

On their website Ecoexperts say that \u201can air source heat pump will now typically save you \u00a31,442 more than a gas boiler over 20 years.\u201c Despite the precise-sounding figure that is clearly a vague estimate, as nobody can know how costs will change over twenty years.<\/p>\n\n\n\n

Other considerations<\/h3>\n\n\n\n

Although in this article I am primarily focusing on financial aspects, there are other considerations that may affect your decision whether to get one. Here are some of them\u2026<\/p>\n\n\n\n