Costs and grants

Understand heat pump installation costs, available grants, and potential running costs.

A man and a woman in hardhats looking discussing heat pump installation with a heat pump in the background.

Installation cost

The cost of installing a heat pump varies based on the property and any upgrades that might be required.

Many homes will need no changes, some homes may need only minor changes (such as swapping some radiators), while others might require extensive modifications to existing pipework and insulation. Price estimates can therefore differ significantly. But it is also important to remember that the cost includes not only that of the heat pump unit itself but also of changing the whole heating system, along with the labour and materials required for installation.

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Costs also depend on the type of heat pump that is installed. For example, ground source heat pumps involve more extensive installation work compared to other types. Installation costs for a ground source heat pump start at approximately £17,000, not including grants. In contrast, an air-to-air heat pump typically costs between £2,500 and £5,000.

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Air source heat pump installation costs (excluding grants)

Scroll from left to right to reveal more table information.

Number of Habitable Rooms*
Property Type	2	3	4	5	6	7	8+
Flats	£9,600	£10,200	£10,950	-	-	-	-
Bungalows	£9,900	£10,650	£11,950	£12,780	£13,710	£14,480	-
Semi-Detached, Terraced And Maisonettes	-	£10,850	£11,380	£11,600	£12,850	£14,070	-
Detached	-	-	£12,640	£13,210	£13,800	£14,370	£15,150

Median inflation-adjusted cost (2023 £) of MCS-certified air source heat pump installations by property archetype and number of habitable rooms (Jan 2019-Jul 2023), Great Britain.
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*A habitable room is any space used for living or sleeping, excluding kitchens, utility rooms, or bathrooms unless they include a distinct living or dining area. For example, an open-plan kitchen with a separate dining or living area qualifies as a habitable room.

Grants and loans

You are likely to be eligible for grants and loans to help you afford to switch to a heat pump. Below are the key grants, loans and incentives that can help with the cost of installation.

A man and woman smiling in front of the house

Grants

Boiler Upgrade Scheme grant

Almost all homeowners and landlords in England and Wales are eligible for a £7,500 grant from the UK government, as long as you have not already received a grant to help with the cost of installing a heat pump or biomass boiler. Find out more on the government’s website.

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Home Energy Scotland Grant

If you live in Scotland, you may be eligible for a £7,500 grant through Home Energy Scotland, funded by the Scottish government. If you live in a rural area you may be eligible for a £9,000 grant.

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Mortgage rewards

Some banks in the UK offer rewards to mortgage customers for installing a heat pump. This can be up to £2,000 cash (in addition to the £7,500 grant). Check with your bank and fully explore their eligibility criteria.

Loans

Home Energy Scotland Loan

If you live in Scotland, you may be eligible for an additional interest-free loan of up to £7,500, on top of a grant award. This is through Home Energy Scotland, funded by the Scottish government. Loans are also available for additional measures to improve your home’s energy efficiency and renewable energy capability.

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Commercial loans

Many banks and building societies are now offering loans and mortgages with discounted rates to support homeowners with the cost of making low-carbon and energy-efficient upgrades to their property.

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Running cost

Switching to a heat pump could lead to significant savings on your heating bills, depending on the system you currently have.

Heat pump savings and future costs

You are likely to make savings on your heating bill if you currently have an oil, LPG (liquid petroleum gas) or electric boiler, electric radiators or storage heaters. This is because heat pumps use three to four times less energy than other heating systems.

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If you’re switching to a heat pump from a gas boiler, your bills will likely stay similar under current tariff caps. Despite heat pumps using significantly less energy to run than a gas boiler, government policy currently makes the price of gas cheaper than electricity.

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However, the price difference between electricity and gas could reduce over time. This could happen if the government makes changes to energy price policies in order to encourage the use of lower-carbon energy technologies. This would mean that in the future running a heat pump could become cheaper than running a gas boiler.

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Using heat pump-friendly tariffs, or installing solar panels and/or battery storage can help reduce running costs further. According to Which?, you could save more than £500 a year on your energy bills by switching to a heat pump from a gas boiler and using a special heat pump tariff. To learn more about the potential anual savings of installing an air source heat pump, read the in-depth guide to heat pumps from Energy Saving Trust.

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Which type of heat pump is right for me?

Take our quiz to discover what heat pump options are likely to be best for homes like yours.

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Case studies

Helen, Shropshire: lives in a 100-year-old detached stone farmhouse

"I had previously built a small house as eco-friendly as possible but didn’t install a heat pump as I was unsure about them."

Adrian, Carmarthenshire: lives in a built-in-1800 stone detached house with attic insulation and double glazing

"We weren’t eco warriors. Our oil boiler had come to the end of its life and to replace it we would have had to move the tank to the middle of our driveway."

Kirk, Aviemore: lives in an 1890s three-bedroom end of terrace with a modern extension

"I’ve had the heat pump for around five years. I got it to replace storage heaters – they were too expensive and not very good at heating the house. Funding was available from the Scottish Government so a heat pump made a lot of sense."