Air Source Heat Pumps (ASHPs) are becoming increasingly popular across the UK due to their energy efficiency, low carbon footprint, and long-term savings potential. However, they aren’t a universal solution. While they offer substantial environmental benefits, installing an ASHP may not always save you money, depending on various factors such as your current heating system, insulation levels, and local electricity prices. Below, we explore key considerations for installing an ASHP, the costs involved, available government grants, and situations where an ASHP may not be the best choice for your home.
Checklist: Is Your Home Suitable for an ASHP?
Before committing to an ASHP installation, it's important to assess whether your home meets the requirements for a successful and cost-effective installation. ASHPs operate most efficiently in well insulated homes and may require specific adjustments to work properly.
1. Home Insulation
ASHPs are most efficient in homes that are well insulated. A well-insulated property will keep heat better, reducing the amount of energy needed to keep your home warm. If your home is poorly insulated (e.g., draughty windows, insufficient loft insulation, or uninsulated cavity walls), an ASHP may struggle to keep the home warm, leading to higher running costs. It’s often recommended to improve your insulation before installing an ASHP to ensure maximum efficiency and cost savings.
2. Existing Heating System
The savings you can expect from installing an ASHP depend on the type of heating system you currently have:
Gas Boilers: If you have a gas boiler, the savings from switching to an ASHP might be less significant. This is especially true if you are on a standard gas tariff, where gas is still cheaper than electricity.
Oil or LPG Boilers: If you're using oil or LPG (liquefied petroleum gas), switching to an ASHP could offer significant savings. These fuels are generally more expensive than electricity, making the running costs of an ASHP more favourable in the long run.
Electric Heating: If you use electric heating (e.g., electric radiators or storage heaters), the savings with an ASHP are likely to be considerable, as ASHPs are much more efficient at heating your home than electric only systems.
3. Radiators and Underfloor Heating
ASHPs operate at lower temperatures than traditional gas boilers. While a gas boiler typically heats water to 60-70°C, an ASHP only heats water to around 35-50°C. To ensure your home gets sufficient heat, you may need larger radiators or an underfloor heating system. Underfloor heating is ideal because it can run effectively at these lower temperatures, providing even and comfortable warmth throughout the room.
4. Outdoor Space
ASHPs require an external unit to extract heat from the outside air. Therefore, you’ll need sufficient outdoor space for this unit, and it should be placed in a location with good airflow. It's important to check local planning regulations to ensure the external unit complies with building and planning codes. If your outdoor space is limited, or if there are obstructions that could reduce airflow, the efficiency of the system may be compromised.
5. Electricity Costs
While ASHPs are highly energy efficient, they run on electricity. The cost effectiveness of switching to an ASHP depends on your electricity rates. In general, electricity in the UK is over three times more expensive than gas on a standard tariff. However, if you can take advantage of dual-rate tariffs (where electricity is cheaper at night or during off-peak hours), you could significantly reduce your running costs. It’s worth checking if your energy provider offers time of use tariffs that might help make an ASHP more financially viable for your home.
6. Government Incentives
There are several government grants and financial incentives available to help with the upfront costs of installing an ASHP. These grants vary depending on your location and eligibility, so it’s worth exploring them to see if you qualify for any support.
Expected Costs of Installing an ASHP
While the initial installation cost of an ASHP system can be significant, the long-term savings on energy bills can offset this over time. Below is an outline of the typical costs involved:
Installation Costs
A typical ASHP installation in the UK can cost between £8,000 and £15,000, depending on factors such as the size of your home, the heating requirements, and whether any additional modifications (e.g., larger radiators, underfloor heating) are needed. The system's efficiency and the quality of the equipment you choose will also affect the final cost.
Running Costs
The annual running costs for an ASHP will vary depending on factors such as the level of insulation in your home, the efficiency of the system, and your electricity rates. On average, you can expect to pay £500 to £1,200 per year in running costs. If you live in an area with expensive electricity, these costs can be higher, but dual rate tariffs could help keep these costs down.
Maintenance Costs
ASHPs generally require minimal maintenance, but regular servicing is necessary to ensure they continue to run efficiently. The typical annual maintenance cost is around £150-£300.
Additional Costs
If your home requires upgrades (e.g., larger radiators or enhanced insulation), this will add to the initial installation cost. However, these improvements may be necessary to get the most out of your ASHP and should be factored into the overall budget.
Available Grants and Financial Support
To encourage the uptake of low carbon heating solutions, the UK government offers several grants and financial support schemes. Here are some of the main options available:
Boiler Upgrade Scheme (BUS)
The Boiler Upgrade Scheme (BUS) offers homeowners in England and Wales up to £7,500 towards the installation of an ASHP. The scheme is designed to help homeowners transition from fossil fuel heating systems to low carbon alternatives. Learn more and apply here.
Energy Company Obligation (ECO4)
The ECO4 scheme provides funding to low-income households in England, Scotland, and Wales. Eligible households can receive between £7,000 and £20,000 to install energy efficient heating systems, including ASHPs. Find out more here.
Home Energy Scotland Scheme
Homeowners in Scotland can receive grants of up to £7,500 for energy efficiency improvements, with added funding available for rural areas. This can help offset the costs of ASHP installation. Details here.
4. Warm Homes Programme Wales
Low-income households in Wales can access support through the Warm Homes Programme, which may cover the full cost of ASHP installation. More information here.
5. 0% VAT on Energy Saving Materials
Households across the UK can receive help from a 0% VAT reduction on the installation of energy saving materials, including ASHPs, until March 2027. This can save you up to £2,450 on installation costs. See details here.
When Not to Install an ASHP
An ASHP is not suitable for every home. Here are some situations where installing an ASHP may not be the best choice:
Poorly Insulated Homes
If your home is poorly insulated, an ASHP may struggle to maintain a comfortable temperature, leading to higher running costs. Before installing an ASHP, you should consider improving your insulation.
Limited Outdoor Space
If your property lacks sufficient outdoor space or suitable placement for the external unit, it may not be possible to install an ASHP.
Low Gas Prices
If you have access to low-cost gas, the savings from switching to an ASHP may be minimal. In such cases, it may not be financially worthwhile to switch to electricity-based heating.
High Electricity Prices
In areas where electricity prices are high, running an ASHP may not save money compared to using gas heating.
Short Term Homeownership
If you plan to sell your home in the near future, you may not recover the installation costs through energy savings, making it less beneficial to invest in an ASHP.
Will an ASHP Save You Money?
The potential savings from installing an ASHP depend on your current heating system, the insulation of your home, and local energy prices. ASHPs are most cost effective when replacing expensive heating systems like oil or electric heating. They may not always save money when replacing a gas boiler, particularly if gas is cheap and electricity is expensive in your area.
Heating System Comparison:
Heating System | Potential Savings/Losses with ASHP |
Gas Boiler | May increase costs if electricity is expensive |
Oil/LPG Boiler | Likely to save money due to higher fuel costs |
Electric Heating | Significant savings possible |
Storage Heaters | Likely to save money |
Our Recommendation
If you choose to install an ASHP, make sure to use an MCS accredited installer. This ensures your system meets high standards of quality and compliance, and helps you qualify for government incentives. MCS accreditation also ensures the reliability and efficiency of the installation.
Final Thoughts
Air source heat pumps can be a great investment for homeowners looking to reduce their energy bills and carbon emissions. However, they are not the right choice for everyone. Before deciding, assess your home’s insulation, existing heating system, and energy costs to decide if an ASHP is a financially viable option for you.
Coupled with solar photovoltaic (PV) panels, an ASHP can become even more powerful. By generating a part of the electricity needed to power the heat pump directly from the sun, you effectively reduce the amount of grid electricity needed. Solar PV panels can produce clean energy during daylight hours, especially when the sun is shining, and this electricity can be used to power the heat pump, lowering your reliance on external energy sources.
See our blog on solar panels. Click here. Introduction to Solar PV
If you're considering an ASHP and need expert advice, contact us at NRG Assessments we can complete an EPC and assess the level of insulation within the house.
Note: Grant availability and amounts are subject to change. Please check official government websites for the most current information.