What Is a Heat Pump, and Will It Save Me Money?

With the target to cut greenhouse gas emissions in the UK to Net Zero by 2050, there has been plenty of discussion around sustainable energy sources in the news of late, and heat pumps have been cited as a prime example of both energy and cost efficiency.

The Prime Minister’s recent pledge to avoid “unacceptable costs” for UK households as part of the Net Zero target has meant that government incentives and subsidies have increased in recent months too.

So, what is a heat pump, how much will it cost to install, and will it save you money on your energy bills?

What is a heat pump and how does it work?

A heat pump, at its core, is a device that transfers heat energy from one source to another. Think of it as a refrigerator in reverse. While a fridge pulls heat from its interior and expels it outside, keeping the insides cold, a heat pump extracts heat from the external environment (even when it’s cold outside) and uses it to heat a home. There are primarily two types of heat pumps used in the UK: air-source and ground-source, or geothermal.

The process is based on the principle that even cold air contains heat. With the use of refrigerants, a compressor, and a condenser, the heat pump can concentrate this external heat and release it inside a property. This method of heating is highly efficient and sustainable, especially compared to traditional methods that burn fossil fuels such as gas boilers.

How could a heat pump save me money on my energy bills?

Heat pumps are renowned for their efficiency and have been widely adopted by Scandinavian countries such as Norway and Sweden since the 1970s for both cost saving and climate saving purposes.

A properly installed heat pump can provide up to three times more heat energy than the electrical energy it consumes. In other words, for every unit of electricity used to run the heat pump, you could get up to three units of heat. This efficiency ratio means the potential to substantially cut your heating costs compared to traditional heating systems like gas or electric furnaces. Indeed, recent research by the World Wide Fund for Nature (WWF) and Scottish Power has suggested savings of nearly 40% on your heating bill.

Moreover, as the UK transitions to more sustainable energy sources and fossil fuel prices continue to fluctuate, relying on a heat pump could offer even more financial savings in the long term.

What does a heat pump cost to install and are there any government subsidies?

The initial cost of installing a heat pump can vary greatly depending on the type (air-source or ground-source) and the specific requirements of the property. Generally, ground-source heat pumps tend to be more expensive due to the excavation required for underground pipes. However, they can also be more efficient in the long run.

The UK government, recognising the environmental benefits of heat pumps, has introduced various subsidy schemes to encourage homeowners to make the switch. These subsidies can considerably reduce the upfront cost of installation.

We recommend checking current government schemes and local incentives regularly as these can evolve over time, but as of 23 October 2023, the Prime Minister has announced an increased incentive of £7,500 for homeowners swapping fossil fuel boilers to heat pumps in England and Wales. There is also a £7,500 grant available for Scottish homeowners which increases to £9,000 in rural areas and an additional interest-free loan option of £7,500. There is currently no boiler replacement scheme available in Northern Ireland, but there has been this option in the past and it may be reintroduced in future.

Are heat pumps suitable for all properties?

Unlike a number of energy efficient upgrades, heat pumps are generally suitable for most homes. Whilst ground-source heat pumps require plenty of outdoor space, air-source heat pumps can be mounted on walls, balconies, a flat roof or on the ground, making them suitable for homes with less or no outdoor space like terraced properties or flats.

Whilst the air-to-water heat pump is currently the most popular type of heat pump in the UK, cheaper air-to-air pumps with hot water supplied separately by immersion or water heaters, or hybrid heat pump and fossil fuel boilers which kick in for the colder, winter months, are popular in other countries and may be suitable here.

For properties with lots of communal space, there is also the option to share a heat pump between properties. However, for leasehold properties, such as flats, you will need to ensure that installing a heat pump doesn’t contravene your lease and that landlords and neighbours are in agreement.

There may also be planning permission considerations, regardless of your property type, so always check with your local planning team.

Can a heat pump add value to my property?

There’s growing evidence to suggest that a heat pump can indeed add value to your property to the tune of £5,000-£8,000+, or around 3% of the total value. This increases even more alongside other energy-efficient, greener choices such as solar panels.

Properties with sustainable and energy-efficient technologies are certainly becoming increasingly desirable to prospective homebuyers. A few factors contribute to this.

Reduced energy bills: Prospective buyers understand that a home with a heat pump will likely have lower energy bills compared to a house with a conventional heating system.

Environmental concerns: With a growing emphasis on sustainability, many buyers are keen to invest in properties with a lower carbon footprint. Heat pumps fit this bill perfectly.

Future-proofing: As the UK government is pushing for a transition to renewable energies and potentially phasing out fossil fuel-based heating systems in the future, having a heat pump can make a property more attractive as it’s already aligned with future standards.

So, heat pumps are not just a sustainable energy choice, but they can also be a financially savvy one. Whether you’re considering the long-term savings on energy bills, potential government subsidies, or the added value to your property, there’s a strong case for making the switch. As always though, do your homework and make sure that a heat pump is the right option for your property and only use a fully qualified professional when it comes to installation.

Luke Hernandez

With a Bachelor’s in Architecture from UCLA, Luke Hernandez has been transforming spaces and providing home improvement advice for over 17 years. He also ran his remodeling firm and contributed to various home improvement magazines. He became a part of various websites in 2016, offering practical, hands-on advice for DIY enthusiasts and homeowners. He is passionate about sustainable building practices and is a weekend rock climber. His previous experience includes managing large-scale construction projects. He also enjoys woodworking and volunteering in community rebuilding projects.

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