Green Home Technology UK — Solar, Heat Pumps and Battery StorageAir Source Heat Pumps UK — Costs, Grants, and Running Costs in 2026
How much does an air source heat pump cost? What grants are available, how much will you save on energy bills, and is a heat pump right for your home?
If you are planning insulation, heating upgrades, and grant-backed home improvements together, use the Energy Efficiency Hub as your main route map.
Air source heat pumps are one of the leading alternatives to gas boilers. With government grants covering a significant portion of the cost and gas boilers due to be phased out in new-build homes, understanding heat pumps is increasingly important. This guide covers the real costs, available grants, running costs, and whether a heat pump suits your home.
Read more: See our Energy Grants guide for a complete overview of this topic.
How Air Source Heat Pumps Work
An air source heat pump extracts heat from the outside air — even in cold weather — and uses it to heat your home and hot water. It works like a refrigerator in reverse.
| Component | Purpose |
|---|
| Outdoor unit | Extracts heat from the air using a fan and refrigerant |
| Compressor | Compresses the refrigerant to increase its temperature |
| Heat exchanger | Transfers heat to your central heating system |
| Indoor unit / cylinder | Heats your water and distributes warmth |
| Term | What it means |
|---|
| COP (Coefficient of Performance) | The ratio of heat output to electricity input |
| Typical COP | 2.5–3.5 (meaning 1kW of electricity produces 2.5–3.5kW of heat) |
| Seasonal COP (SCOP) | Average COP across the whole year, accounting for winter drops |
A COP of 3.0 means for every £1 of electricity you put in, you get £3 worth of heating. This is why heat pumps are more efficient than gas boilers (which operate at 85–95% efficiency at best).
How Much Does an Air Source Heat Pump Cost?
Installation Costs (Before Grant)
| Home size | Heat pump size | Typical installed cost |
|---|
| Small (1–2 bed flat/house) | 5–7 kW | £7,000 – £10,000 |
| Medium (3 bed semi) | 8–12 kW | £9,000 – £13,000 |
| Large (4+ bed detached) | 12–16 kW | £12,000 – £18,000 |
What Is Included
| Item | Typical cost |
|---|
| Heat pump unit | £3,000 – £7,000 |
| Installation labour | £2,000 – £4,000 |
| Hot water cylinder | £500 – £1,500 |
| Pipework and connections | £500 – £2,000 |
| Controls and thermostat | £200 – £500 |
| Commissioning | Included in installation |
Additional Costs You May Need
| Extra | Typical cost | When needed |
|---|
| Larger radiators | £2,000 – £4,000 | If existing radiators are too small for heat pump temperatures |
| Underfloor heating | £3,000 – £8,000 | Ideal partner for heat pumps but not always required |
| Loft and wall insulation | £1,000 – £5,000 | Essential for heat pump efficiency |
| Electrical upgrade | £500 – £1,500 | If your consumer unit or supply needs upgrading |
| Radiator upgrades | £150 – £300 per room | Replacing small radiators with larger ones |
Cost After the Boiler Upgrade Scheme Grant
| Scenario | Installed cost | Grant | Net cost |
|---|
| Small home | £8,000 | £7,500 | £500 |
| Average home | £11,000 | £7,500 | £3,500 |
| Large home | £15,000 | £7,500 | £7,500 |
| Average + new radiators | £14,000 | £7,500 | £6,500 |
Grants and Financial Support
Boiler Upgrade Scheme (BUS) — England and Wales
| Detail | Information |
|---|
| Grant amount | £7,500 for air source heat pumps |
| Where | England and Wales |
| Eligibility | Homeowner (not new build), valid EPC, MCS-certified installer |
| How it works | Grant is paid to the installer, who deducts it from your bill |
| Deadline | Currently available — check for scheme extensions |
| Multiple grants | One per property |
You must use an MCS-certified installer to qualify. The installer handles the grant application — you sign a voucher and the grant is deducted from the cost. You do not receive cash.
Scotland — Home Energy Scotland
| Detail | Information |
|---|
| Grant | Up to £7,500 (or £9,000 in rural/island areas) |
| Loan | Interest-free loan of up to £7,500 |
| Combined | Up to £15,000+ of support |
| Contact | Home Energy Scotland on 0808 808 2282 |
Other Support
| Scheme | Details |
|---|
| ECO4 | Free or subsidised heat pump for eligible low-income households |
| 0% VAT | No VAT on heat pump installations (energy-saving materials) |
| Local authority grants | Some councils offer additional support — check your council |
Running Costs Compared
Annual Heating Costs
| Heating system | Efficiency | Fuel cost per kWh | Annual cost (average 3-bed home) |
|---|
| Gas boiler (modern) | 90% | ~7p (gas) | £850 – £1,100 |
| Oil boiler | 85% | ~8p (oil) | £1,000 – £1,400 |
| Electric storage heaters | 100% | ~24p (electricity) | £2,000 – £2,800 |
| Air source heat pump | COP 3.0 | ~8p effective (24p ÷ 3) | £700 – £1,000 |
| Heat pump + TOU tariff | COP 3.0 | ~5p effective | £450 – £700 |
Key insight: Although electricity costs roughly 3–4 times more per unit than gas, a heat pump’s efficiency (COP of 3.0+) means the effective cost per unit of heat delivered is comparable. With a time-of-use (TOU) tariff that offers cheap overnight electricity, heat pumps can be significantly cheaper.
Savings Compared to Other Systems
| Replacing | Typical annual saving |
|---|
| Old gas boiler (70% efficient) | £200 – £500 |
| Modern gas boiler (90% efficient) | £0 – £200 |
| Oil boiler | £200 – £600 |
| LPG boiler | £400 – £800 |
| Electric storage heaters | £800 – £1,500 |
| Direct electric heating | £1,000 – £2,000 |
Heat pumps save the most money when replacing electric heating, oil, or LPG. Savings versus a modern gas boiler are smaller and depend heavily on tariff rates.
Maximising Savings
| Strategy | Impact |
|---|
| Switch to a time-of-use electricity tariff | Run the heat pump overnight at 5–10p/kWh instead of 24p |
| Add solar panels | Generate free electricity to run the heat pump |
| Improve insulation | The less heat you lose, the less the heat pump needs to produce |
| Use weather compensation controls | The system adjusts output based on outside temperature |
| Keep the heat pump running at steady, low temperatures | More efficient than cycling on and off at high temperatures |
Is Your Home Suitable?
Ideal Conditions
| Factor | Ideal | Possible with upgrades |
|---|
| Insulation | Well-insulated (loft, walls, floors) | Can improve insulation first |
| Radiators | Large enough for low-temperature operation (45–50°C) | Can upgrade radiators |
| Outdoor space | Room for the outdoor unit (about the size of a washing machine) | Most gardens accommodate this |
| Hot water | Space for a hot water cylinder | If you currently have a combi boiler, you will need to add a cylinder |
| Electrical supply | Single-phase OK for most domestic units | Three-phase rarely needed |
Homes Where Heat Pumps Work Best
| Property type | Suitability |
|---|
| Well-insulated modern home | Excellent — may need no upgrades |
| Detached house with garden | Excellent — plenty of space |
| Semi-detached house | Good — check noise distance from neighbours |
| Older house with cavity walls | Good, if walls and loft are insulated |
| Solid-wall older home | Can work but may need external wall insulation |
| Flat or terraced house | Possible but space for outdoor unit and noise may be issues |
Homes Where Heat Pumps Are More Challenging
| Situation | Challenge |
|---|
| Very poorly insulated | Heat demand too high — insulate first |
| No space for outdoor unit | The unit needs airflow and a solid base |
| Noise-sensitive location | The outdoor unit produces some noise (similar to a fridge) |
| Listed building | Planning permission may be needed |
| Very large, draughty house | May need a large, expensive system |
Planning Permission
| Situation | Permission needed? |
|---|
| Detached house | No (permitted development) |
| Semi-detached house | No (if noise rules met) |
| Terraced house | No (if noise and distance rules met) |
| Flat | Usually yes |
| Listed building | Yes |
| Conservation area | Possibly — check with council |
| Noise limits | Must not exceed 42dB at nearest neighbour’s window |
Heat Pumps vs Gas Boilers
| Factor | Air Source Heat Pump | Gas Boiler |
|---|
| Upfront cost | £8,000 – £15,000 (before grant) | £2,000 – £4,000 |
| Running cost | £700 – £1,000/year | £850 – £1,100/year |
| Efficiency | 250–350% (COP 2.5–3.5) | 85–95% |
| Lifespan | 20–25 years | 10–15 years |
| Maintenance | Annual service £100–£200 | Annual service £60–£120 |
| Carbon emissions | Low (zero if using renewable electricity) | Significant |
| Government support | £7,500 BUS grant | None |
| Future-proofing | Gas boiler ban in new builds approaching | Will need replacing |
| Heating delivery | Best with large radiators or underfloor heating | Works with any radiators |
| Hot water | Needs a cylinder | Combi boilers heat on demand |
How to Get an Air Source Heat Pump
Step by Step
| Step | Action |
|---|
| 1 | Check your home’s insulation — improve if needed |
| 2 | Get a current EPC (required for the BUS grant) |
| 3 | Get quotes from at least 3 MCS-certified installers |
| 4 | Installer designs the system and sizes it for your home |
| 5 | Installer applies for the BUS grant on your behalf |
| 6 | Grant is approved (usually within days) |
| 7 | Installation takes 2–5 days |
| 8 | System is commissioned and you are shown how to use it |
Choosing an Installer
| What to check | Why |
|---|
| MCS certification | Required for the BUS grant and a mark of quality |
| At least 3 quotes | Prices vary significantly between installers |
| References | Ask to speak to previous customers |
| System design | A proper heat loss calculation should be done for your home |
| Warranty | Look for 5–10 year warranties on the unit |
| Aftercare | Annual servicing should be offered |
Red Flags
- No MCS certification
- No heat loss survey before quoting
- Oversized or undersized system for your home
- Pressure to commit without comparing quotes
- No mention of potential radiator or insulation upgrades
Maintenance
| Task | Frequency | Cost |
|---|
| Annual service | Every year | £100 – £200 |
| Filter cleaning | Every 6 months | DIY |
| Check refrigerant levels | During annual service | Included |
| Clear debris from outdoor unit | Regularly | DIY |
| Check defrost cycle works | Winter | DIY |
Heat pumps have fewer mechanical parts than gas boilers and generally require less maintenance. The outdoor unit should be kept clear of leaves, snow, and debris.
Summary
| Key point | Details |
|---|
| Typical cost installed | £8,000 – £15,000 |
| BUS grant | £7,500 (England and Wales) |
| Net cost after grant | £500 – £7,500 |
| Running cost | £700 – £1,000/year (similar to gas) |
| Efficiency | 250–350% |
| Lifespan | 20–25 years |
| Best savings vs | Oil, LPG, or electric heating |
| Planning permission | Usually not needed |
| VAT | 0% |
Air source heat pumps are a long-term investment that can cut heating bills (especially if replacing oil or electric), reduce your carbon footprint, and future-proof your home against the move away from fossil fuel heating. The £7,500 BUS grant makes the upfront cost much more manageable.
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