Replacing a gas, oil or LPG boiler with a heat pump is one of the biggest upgrades you can make to a UK home, so it pays to understand the numbers first. An air source heat pump installation typically costs £8,000 to £14,000 before any grant, but the government’s Boiler Upgrade Scheme takes £7,500 off the price in England and Wales, bringing many installations down to a cost similar to a new boiler and radiator upgrade.
The other big question is heat pump running costs. A well-designed system delivers around three units of heat for every unit of electricity it uses, so in a reasonably insulated home it can cost about the same as a modern gas boiler to run on a standard tariff – and noticeably less on a heat pump electricity tariff, or when it replaces oil, LPG or electric storage heaters.
Below you will find heat pump prices by type, how the heat pump grant works and who qualifies, a simple way to estimate your annual running costs, what the installation involves day by day, and the questions to ask before you accept a quote.
Heat pump prices by type
There are three main types of domestic heat pump. Each suits a different kind of property and budget:
- Most common choice for UK homes
- Heats radiators and hot water
- Grant: £7,500
- Needs a large garden or borehole
- Highest efficiency, lowest running cost
- Grant: £7,500
- Blows warm (or cool) air into rooms
- Ideal for flats and smaller homes
- Grant: £2,500
Prices include the outdoor unit, controls and labour. The biggest variable is how much work your existing heating system needs. Government statistics on the Boiler Upgrade Scheme have put the average air source installation at around £12,500 before the grant.
Extra work that can add to the cost
- Larger radiators: heat pumps run at lower flow temperatures, so some rooms may need bigger radiators – often £300–£600 per radiator fitted.
- Hot water cylinder: combi boiler homes need a cylinder; this is usually included in a heat pump quote but needs space, typically in an airing cupboard.
- Pipework upgrades: narrow microbore pipes may need replacing.
- Insulation: loft or cavity wall insulation may be recommended before installation to keep running costs down.
The Boiler Upgrade Scheme: the main heat pump grant
The Boiler Upgrade Scheme (BUS) is run by Ofgem and is available to homeowners, small businesses and private landlords in England and Wales. The grant is not paid to you: your installer applies for a voucher and deducts it from your bill.
| System | BUS grant |
|---|---|
| Air source heat pump | £7,500 |
| Ground or water source heat pump | £7,500 |
| Air-to-air heat pump | £2,500 |
| Biomass boiler | £5,000 |
Homes that currently heat with oil or LPG may qualify for a higher temporary grant on air or ground source systems, so ask your installer whether this applies to you.
To be eligible you generally need to:
- own the property (or be the landlord or small business owner);
- be replacing a fossil fuel system such as gas, oil or LPG, or direct electric heating;
- use an MCS-certified installer;
- have a valid Energy Performance Certificate (EPC).
Hybrid systems that keep a gas boiler alongside a heat pump do not qualify. In Scotland, Home Energy Scotland offers its own grant and interest-free loan, and in England low-income households may get a fully funded heat pump through the Warm Homes: Local Grant.
How much does a heat pump cost to run?
Running costs depend on three things: how much heat your home needs, how efficient the heat pump is, and what you pay for electricity. Efficiency is measured as SCOP (seasonal coefficient of performance). A SCOP of 3 means three units of heat for every unit of electricity.
Annual heat demand (kWh) ÷ SCOP × electricity unit rate = yearly running cost
Example: a home that needs 10,000 kWh of heat a year, with a heat pump achieving a SCOP of 3, will use roughly 3,300 kWh of electricity. Multiply that by your unit rate to see the yearly cost.
- Versus gas: with a SCOP around 3 on a standard tariff, running costs are broadly level with a modern gas boiler. A higher SCOP or a heat pump tariff tips the balance in your favour, and you can drop the gas standing charge.
- Versus oil, LPG or storage heaters: a heat pump is usually clearly cheaper to run.
- With solar panels: daytime solar generation can cover part of the heat pump’s demand. See our solar panels price and savings guide.
The single biggest factor is the quality of the design. A correctly sized heat pump running at low flow temperatures will be far cheaper to run than an oversized unit pushed hard.
Planning permission and noise
In England, most air source heat pumps on houses are permitted development, so a planning application is not normally needed if the unit meets size, siting and noise conditions. Listed buildings, flats and some protected areas may need permission, and rules differ in Scotland, Wales and Northern Ireland. Your installer should carry out a noise assessment as part of the MCS design.
What happens during installation
1. Home survey and heat loss calculation
The installer measures every room to work out how much heat your home loses, then sizes the heat pump, radiators and cylinder.
2. Quote and grant application
You agree a quote that shows the grant deducted; the installer applies to Ofgem for the voucher.
3. Installation (usually 2–5 days)
The outdoor unit is mounted on a base or wall bracket, the cylinder fitted and radiators or pipework upgraded. Expect your heating and hot water to be off for part of this time.
4. Commissioning and handover
The system is tested and set up, and you receive your MCS certificate, warranties and a walkthrough of the controls.
Questions to ask before you sign
- Is the quote based on a room-by-room heat loss calculation?
- What flow temperature and SCOP is the system designed for?
- Which radiators need replacing, and is that included?
- Is the installer MCS-certified and a member of a consumer code such as RECC or HIES?
- What do the warranty and annual servicing cover, and how much do they cost?
Frequently asked questions
Do heat pumps work in cold weather?
Yes. Modern air source heat pumps keep working well below freezing and are widely used in much colder countries. Efficiency drops a little on the coldest days, which a correct design accounts for.
Will my house feel as warm as with a boiler?
Yes, if the system is properly sized. Heat pumps work best running steadily at a lower temperature, so rooms stay evenly warm rather than heating up quickly in bursts.
How long does a heat pump last?
Most air source units last around 15–20 years, and ground source systems often longer, with the ground loop itself lasting decades.
Do I need to apply for the grant myself?
No. Your MCS-certified installer applies for the Boiler Upgrade Scheme voucher on your behalf and deducts it from the final price. Ofgem may contact you to confirm you agreed to the application.
Are heat pumps noisy?
A modern outdoor unit makes a low hum, similar to a fridge or quiet air conditioner, and must meet noise limits to be installed under permitted development.
Grant figures based on GOV.UK, Ofgem and Energy Saving Trust information.
Independent guide – not linked to any installer or energy supplier.
