Heat Pump Costs 2026: Complete UK Price Guide
Everything you need to know about heat pump prices, installation costs, running costs, and how to reduce your costs with government grants.
Quick Summary: Heat Pump Costs 2026
- ✓ Air source heat pump: £7,000-£15,000 (installed)
- ✓ Ground source heat pump: £15,000-£35,000 (installed)
- ✓ BUS grant available: £7,500 off installation
- ✓ Running costs: £500-£1,200/year (average home)
- ✓ Payback period: 6-12 years (with grant)
Thinking about getting a heat pump? The biggest question on everyone's mind is: how much will it cost? In this comprehensive guide, we break down every cost associated with buying, installing, and running a heat pump in the UK.
The good news? With the £7,500 Boiler Upgrade Scheme grant, heat pumps are now more affordable than ever. Let's dive into the numbers.
Heat Pump Purchase & Installation Costs
The total cost of a heat pump includes the unit itself, installation labour, and any additional work like radiator upgrades or pipework modifications.
| Heat Pump Type | Total Installed Cost | After £7,500 Grant |
|---|---|---|
| Air Source (small home, 2-3 bed) | £7,000 - £10,000 | £0 - £2,500 |
| Air Source (medium home, 3-4 bed) | £10,000 - £13,000 | £2,500 - £5,500 |
| Air Source (large home, 4-5 bed) | £12,000 - £15,000 | £4,500 - £7,500 |
| Ground Source (horizontal) | £15,000 - £25,000 | £7,500 - £17,500 |
| Ground Source (borehole) | £20,000 - £35,000 | £12,500 - £27,500 |
What's Included in Installation Costs?
A typical heat pump installation quote should include:
- The heat pump unit - outdoor unit and indoor components
- Hot water cylinder - most homes need a new one (£500-£1,500)
- Pipework and fittings - connecting the system
- Controls and thermostat - smart controls are standard
- Electrical work - new circuit and connections
- Labour - typically 2-4 days for air source
- MCS certification - required for grant eligibility
Additional Costs to Consider
Some installations require extra work:
- Radiator upgrades: £150-£400 per radiator if larger ones are needed
- Underfloor heating: £50-£80 per m² (optional but ideal for heat pumps)
- Insulation improvements: Variable - may be required for efficiency
- Planning permission: Usually not needed, but £200+ if required
Heat Pump Running Costs
Heat pumps are powered by electricity, so your running costs depend on electricity prices and the efficiency of your system.
| Property Size | Heat Pump Running Cost | Gas Boiler Comparison |
|---|---|---|
| 2-bed flat | £400 - £600/year | £500 - £700/year |
| 3-bed semi | £600 - £900/year | £800 - £1,100/year |
| 4-bed detached | £800 - £1,200/year | £1,000 - £1,400/year |
| 5-bed large home | £1,000 - £1,500/year | £1,300 - £1,800/year |
Key factors affecting running costs:
- COP (Coefficient of Performance): Modern heat pumps achieve COP of 3-4, meaning for every 1kWh of electricity, you get 3-4kWh of heat
- Insulation levels: Better insulated homes cost less to heat
- Electricity tariff: Heat pump tariffs like Octopus Cosy can reduce costs by 20-30%
- Flow temperature: Lower flow temperatures (35-45°C) are more efficient
The £7,500 BUS Grant Explained
The Boiler Upgrade Scheme (BUS) provides £7,500 towards heat pump installation. To qualify:
- You must own the property (or be a landlord)
- The property must have an EPC (Energy Performance Certificate)
- You must be replacing a fossil fuel heating system (gas, oil, LPG, coal)
- The installer must be MCS certified
- The grant is applied automatically - you don't need to apply separately
The grant is available until 2028, but we recommend acting soon as funding is limited and popular installers get booked up months in advance.
Is a Heat Pump Worth the Investment?
Let's look at a real example for a typical 3-bedroom semi-detached home:
| Cost Element | Heat Pump | New Gas Boiler |
|---|---|---|
| Upfront cost | £11,000 | £3,000 |
| Less BUS grant | -£7,500 | £0 |
| Net upfront cost | £3,500 | £3,000 |
| Annual running cost | £750 | £950 |
| 15-year running costs | £11,250 | £14,250 |
| Total 15-year cost | £14,750 | £17,250 |
In this example, the heat pump saves £2,500 over 15 years compared to a new gas boiler. Plus you get:
- Protection from future gas price increases
- Future-proofing (gas boilers banned in new homes from 2025, existing homes likely by 2035)
- Lower carbon emissions
- Potential increase in property value
How to Reduce Heat Pump Costs
- Claim the BUS grant - £7,500 off automatically
- Get multiple quotes - prices vary significantly between installers
- Choose the right size - oversized systems cost more to buy and run
- Switch to a heat pump tariff - save 20-30% on electricity
- Improve insulation first - a well-insulated home needs a smaller, cheaper heat pump
- Consider air source over ground source - unless you have the land and budget
Frequently Asked Questions
How much does a heat pump cost in the UK?
Air source heat pumps cost £7,000-£15,000 installed. Ground source heat pumps cost £15,000-£35,000 installed. After the £7,500 BUS grant, you could pay as little as £0-£7,500 for an air source system.
What are heat pump running costs per year?
Heat pump running costs are typically £500-£1,200 per year for an average UK home, depending on property size, insulation, and electricity tariff. This compares to £800-£1,400 for gas boilers at current prices.
Is a heat pump cheaper than a gas boiler?
Heat pumps have higher upfront costs but lower running costs. With the £7,500 grant, total cost of ownership over 15 years is typically £3,000-£8,000 less than a gas boiler, plus you future-proof against gas price rises and the 2035 gas boiler ban.
Get Your Personalised Quote
Every home is different, so the best way to know your exact costs is to get quotes from MCS certified installers. Our free service connects you with up to 3 local installers who can survey your property and provide accurate quotes.
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