The cost of an air source heat pump is often the deciding factor for homeowners in the UK considering greener heating options. With typical installation costs around £11,000 according to research from the Energy Saving Trust, it is understandable why people pause – but when you factor in generous grants (subject to eligibility), efficiency gains, long-term savings, and a lower carbon footprint, the picture changes dramatically. In this blog, we’ll break down current costs, available financial support, potential energy savings, and why these systems are worth your attention.
What Is the Typical Cost of Air Source Heat Pumps in the UK?
According to the Energy Saving Trust, you can expect to pay around £11,000 for a fully installed air source heat pump. More recent data from Which? shows that under the government’s Boiler Upgrade Scheme (in England & Wales), average installed costs reached £12,500, but after applying the grant (subject to eligibility), homeowners typically paid around £5,000 according to Which?.
Grants & Incentives That Reduce the Cost
When considering the cost of an air source heat pump in the UK, it is important to factor in the range of grants and support schemes available, subject to eligibility. These programmes can make a huge difference to both your initial investment and your long-term running costs.
Boiler Upgrade Scheme (BUS)
The government’s Boiler Upgrade Scheme (BUS) remains the most significant support option for homeowners in England and Wales. It provides up to £7,500 (subject to availability) toward the cost of installing an air source heat pump, reducing the typical upfront spend from around £11,000–£12,500 to £4,000–£5,000. Recent changes, including the scrapping of the “one-metre rule” for boundary placement, have made it easier to install heat pumps in homes with limited outdoor space particularly urban and terraced properties.
ECO4 (Energy Company Obligation – Phase 4)
The current ECO4 scheme obligates large energy suppliers to fund energy-efficiency improvements for low-income and vulnerable households. Measures include heating system upgrades, insulation, and renewable technologies like air source heat pumps. It specifically targets homes with lower energy performance ratings (EPC D–G), ensuring that those most in need can access affordable, low-carbon heating.
Local Authority Flexibility (LA Flex)
As part of ECO4, LA Flex allows local councils to expand eligibility. Councils publish Statements of Intent that outline who qualifies, which can include households with modest incomes, health concerns, or residents at risk of fuel poverty. This localised flexibility opens up access to heat pump funding for people who do not meet the standard ECO4 criteria.
Great British Insulation Scheme (GBIS)
The GBIS complements ECO4 by offering insulation upgrades to a wider range of households, including those in council tax bands A–E with EPC ratings of D or below. Unlike ECO4, which is more comprehensive, GBIS usually funds a single insulation measure such as loft, cavity wall, or underfloor insulation. By cutting heat loss, GBIS makes homes far more suitable for heat pump technology, while saving households an estimated £300–£400 per year on energy bills (according to research from Which?).
Smart Export Guarantee (SEG)
Although not a grant, the Smart Export Guarantee (SEG) is worth noting. If you combine your heat pump with renewable electricity generation, such as solar panels, the SEG ensures you are paid for any surplus electricity exported back to the grid. This can help offset the running costs of your heat pump, further boosting your long-term savings.
If you need any assistance with understanding or applying for any of the above funding options, please get in touch.
Potential Savings on Running Costs & Emissions
Switching to an air source heat pump isn’t just about the upfront investment, it is also about the long-term financial and environmental gains. Here is an overview of the potential financial figures for households across the UK.
1. Reduced Running Costs
- A study by an independent climate change think tank ‘E3G’ reveals that due to the current structure of UK energy tariffs, heat pumps may cost £920 per year, compared to £820 per year for gas boilers. However, with smart policy reforms – like rebalanced electricity pricing and off-peak tariffs, the E3G study suggests that households could potentially save around £445 annually when switching to heat pumps.
- Which?, relying on government data under the Boiler Upgrade Scheme, illustrates that heat pumps with a Seasonal Coefficient of Performance (SCoP) of 4.5 can cost as little as £379 per year for heating – compared to £823 a year for a gas boiler.
- The Energy Saving Trust estimates forecast savings of about £260 per year when replacing an ageing G-rated gas boiler – and even more if replacing LPG or electric storage heating systems.
2. Significant Carbon Dioxide Emissions Reductions
- The Energy Saving Trust reports that replacing an old, inefficient G-rated gas boiler with an air source heat pump can reduce annual carbon dioxide emissions by approximately 2,900 kg-equivalent to a round-trip flight from Belfast to Nairobi and back.
- For more typical homes, savings range from 1,900 kg (when switching from a modern gas boiler) up to 2,900 kg for older models, according to the Energy Saving Trust.
Key Benefits Beyond Cost
Beyond price, air source heat pumps offer multiple advantages. According to the Energy Efficient Home Campaign they are more than three times efficient compared to boiler systems , typically last up to 20 years, according to Octopus Energy, and are suitable for nearly all home types. They also support net-zero carbon goals and are increasingly backed by government policy.
The Reality of Air Source Heat Pumps
Although the air source heat pump cost in the UK might initially seem high, the reality-with grants, long-term savings, emissions reduction, and efficiency is much more appealing. These systems are ready to deliver value over time. If you are ready to explore tailored quotes, available funding, or property eligibility, or requesting a free site survey is a smart next step.
Please contact us to find out more about how air source heat pumps could save you money and to check your eligibility.
Email – info@smartliving.energy
Telephone – 0800 008 6209