Heat pump costs explained: installation, grants & running costs

Considering switching to a heat pump? It’s natural to want to understand more about heat pump costs before diving in headfirst. There's a lot to consider, from the initial heat pump installation to the running and maintenance costs. While the upfront cost of an air-source heat pump is typically higher than that of a standard gas boiler, the long-term financial picture tells a very different story.

Thanks to exceptional energy efficiency, generous government funding and reduced VAT rates, switching to low-carbon heating is more accessible and cost-effective than ever.

In this guide, we break down installation costs, day-to-day running costs, available grants, and how heat pumps compare to traditional boilers, so you can make the right investment for your property.

Read our guide on how air source heat pumps work

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Heat pump costs by type: Air Source vs Ground Source

The cost to install, run and maintain your heat pump varies depending on its type. For example, a ground source heat pump costs around £28,000. Air source heat pump installations cost usually around £14,000, according to Energy Saving Trust.

To weigh these systems against traditional options, see our heat pump vs gas boiler comparison guide.

Heat pump installation cost by type

Ground-source heat pumps often have extremely high installation costs due to the required excavation. According to Green Match, installing a vertical ground source heat pump can cost £23,000-49,000, while a horizontal ground source heat pump will cost £16,200-31,000 to install.

Since no digging is required, air source heat pumps are much less expensive to install than ground-source heat pumps.

Split air source heat pumps are slightly more expensive to install than monobloc air source heat pumps as engineers must be F-Gas certified to install split heat pumps, whereas with a monobloc heat pump, the F-Gas is kept in a sealed unit, so engineers do not require an F-Gas certification to install it safely. See our guide to different types of heat pumps to learn more about the distinctions between heat pump types.

Our guide to selecting and installing the right heat pump can help you find the most cost-effective heat pump type for your home.

Heat pump running cost by COP and SCOP

Heat pump COP stands for Coefficient of Performance and describes how efficiently a heat pump operates by measuring how much heat energy it produces per unit of electricity it uses.

SCOP stands for Seasonal Coefficient of Performance and considers the impact seasonal changes have on efficiency for an average Coefficient of Performance across the entire heating season. We explain this further in our guide to heat pumps in winter and cold weather.

Because our heat pumps consistently achieve a COP over 300%, you get three times as much heat energy output as electricity input, giving you a high value for the electricity you pay for. The higher your heat pump’s COP, the less electricity you need to use.

Learn more about suitability criteria and low-carbon funding in our guide on ‘Should I install a heat pump in my home?’.

Heat pump maintenance costs

Your heat pump will require annual servicing. Our guide on what to expect from a heat pump service explains this process.

There are simple things you can do to maintain your heat pump so it does not need additional servicing. One is regularly clearing the fan of debris and leaves so the pump can work at optimum efficiency and avoid freezing in cold weather.

All Ideal heat pumps include a magnetic filter to protect your system from debris. However, other heat pump suppliers may require you to buy this separately and attach it during installation.

You should also ensure that you have the best warranty to alleviate maintenance costs. With Ideal, your Heat Pump comes with a five-year parts and labour warranty. With a parts-only warranty, you would have to find and pay for an engineer separately.

To learn how to keep your running costs low during colder months, read our expert tips on how to heat your home efficiently in winter.

Heat pump cost vs gas boiler cost

If you’re choosing between a heat pump or gas boiler, cost comparison is likely to factor in your decision.

The installation cost of a heat pump is significantly higher than that of a gas boiler, between £7,000 - £14,000 compared to a gas boiler’s mere £500 - £3,500.

However, heat pumps are significantly more efficient. Gas boilers are less than 100% efficient, compared to heat pumps, which are 300% efficient or more.

To understand more about the difference between gas boilers and heat pumps, our heat pumps vs gas boilers guide can help you decide which is the best choice for your home.

Home improvement costs for installing a heat pump

When installing a heat pump, the cost of the heat pump itself and its installation may not be the only costs involved. Further heat optimisation might be needed for your heat pump to work to the best of its ability. This can include:

Radiator upsizing
Home insulation
Adding a hot water cylinder to the home if a Combi boiler was there previously

However, it is also possible that your home will be sufficiently insulated, have large enough radiators, or already have a hot water cylinder, so these additional costs may be avoided.

If additional insulation or heat optimisation is needed for your home, implementing these will decrease the running costs of your heat pump over time as less energy, and therefore electricity, will be needed to keep your home warm.

How to fund low-carbon heating

You can also reduce heat pump costs with grants and loans, making it an even more cost-effective heating solution.

Boiler Upgrade Scheme

Until 30th December 2029, homeowners in England and Wales can access a heat pump grant of up to £7,500 through the Boiler Upgrade Scheme, significantly reducing heat pump installation costs. This has replaced the Renewable Energy Incentive and is open to both homes and small non-domestic buildings. Just be sure to check your Boiler Upgrade Scheme eligibility online first.

Low carbon funding via banks

There are a number of green mortgages and loans available from UK banks to help with heat pump costs and other low-carbon home heating improvements.

With Nationwide, homeowners can access a Green Additional Borrowing Mortgage. This allows you to borrow between £5,000 and £15,000 to make energy-efficient improvements to your home, with 0% interest for the first two or five years.

Barclays offers a Greener Home Reward to mortgage customers: £2,000 to help with the cost of a heat pump, solar panels, or insulation.

Virgin Money offers a Green Reward to their mortgage customers in the form of £250 cashback when you spend £2,500 on up to six energy-saving improvements, including installing a heat pump.

Heat pump tariffs

Energy suppliers also offer tariffs to help cover the costs of running your heat pump.

OVO Energy offers Heat Pump Plus, which lets you pay only 15p per kWh for the energy used to power your heat pump.
Octopus offers the Cosy Octopus tariff, which gives two ‘cosy periods’ per day, between four and seven AM and one to four PM, during which energy rates are much lower.
EDF Energy similarly offers two low-cost periods per day, which it claims can save customers up to £164 compared to its standard tariff.

Finding the right heat pump system for your home

Choosing a low-carbon heating system is a significant decision, but it brings long-term efficiency, lower carbon emissions, and peace of mind. Ideal Heating supports your green transition with over a century of British engineering expertise.

Explore our specialised low-carbon technology options to find the right fit for your property: Ideal Logic Air Heat Pump

Next Steps for Your Low-Carbon Home Upgrade

Navigating your home energy transition is much easier when you plan ahead, whether you are relying on government grants or private investment. To ensure peak system performance from day one, your best first step is to assess if an air source heat pump is right for your home before arranging your installation survey.

From there, take time to explore the different types of heat pumps available to understand how each model operates, and finally, prepare for your installation journey by reviewing our step-by-step checklist for selecting, installing, and setting up your heat pump.