Heat pump costs UK 2026
What you'll pay for an air source or ground source heat pump — installed prices, the £7,500 grant, real running costs, and how the numbers stack up against gas, oil, and LPG.
The short version: an air source heat pump costs £8,000–£13,000 installed. The BUS grant knocks £7,500 off, leaving you paying £3,500–£5,700 out of pocket. Running costs are similar to gas (£900–£1,300/yr vs £800–£1,000/yr) but well below oil and LPG. With the grant, payback against gas takes 10–15 years; against oil, as little as 5 years.
Air source heat pump prices
Air source heat pumps (ASHPs) are the most common type in the UK. These are fully installed prices including the unit, pipework, controls, cylinder, and labour from an MCS-certified installer.
| Property type | Heat pump size | Installed cost | After BUS grant |
|---|---|---|---|
| 1–2 bed flat / small home | 5–7 kW | £8,000–£10,000 | £500–£2,500 |
| 3-bed semi / terrace ★ | 8–10 kW | £9,000–£12,000 | £1,500–£4,500 |
| 4-bed detached | 10–14 kW | £11,000–£13,000 | £3,500–£5,500 |
| Large / poorly insulated | 14–16 kW | £12,000–£15,000 | £4,500–£7,500 |
★ Most common UK installation. Prices include the heat pump unit, hot water cylinder (if not already present), pipework modifications, controls, commissioning, and MCS certification. 0% VAT applies as an energy-saving measure.
Ground source heat pump prices
Ground source heat pumps (GSHPs) are more efficient but significantly more expensive due to the borehole or trench work required.
- Horizontal trench system: £20,000–£28,000 installed. Needs a large garden — roughly 2–3 times the floor area of the house.
- Vertical borehole system: £25,000–£35,000 installed. Suitable for smaller plots but drilling adds £5,000–£10,000.
- After BUS grant: £12,500–£27,500 out of pocket.
GSHPs achieve higher efficiency (COP of 4–5 vs 3–4 for ASHPs), so running costs are lower. But the upfront premium means they only make financial sense for larger properties off the gas grid, or where ground conditions are favourable.
What's included in the price
A proper heat pump installation involves more than just the outdoor unit. Your MCS-certified installer's quote should cover:
- Heat pump unit — the outdoor compressor/evaporator. Leading brands include Vaillant, Daikin, Samsung, Mitsubishi, and Grant.
- Hot water cylinder — heat pumps need a larger cylinder than a combi boiler. Typically 200–300 litres. If you're replacing a combi, budget £800–£1,500 for the cylinder.
- Pipework modifications — heat pumps run at lower flow temperatures (35–45°C vs 60–80°C for a gas boiler), so some radiators may need upsizing or you may need to add radiators. Budget £1,000–£3,000 for significant radiator work.
- Controls and commissioning — weather compensation controls, room thermostats, and system balancing to optimise efficiency.
- Electrical work — dedicated circuit and possible consumer unit upgrade.
- MCS certification and DNO notification — required for the BUS grant and any future support schemes.
The Boiler Upgrade Scheme (BUS) grant
The BUS grant is the main financial incentive for heat pumps in England and Wales:
- Amount: £7,500 for air source or ground source heat pumps.
- How it works: your MCS-certified installer applies on your behalf. The grant is deducted directly from your invoice — you never see the full price.
- Eligibility: you must own the property (or be a private landlord), have an existing heating system being replaced, and have a valid EPC (any rating). New builds don't qualify.
- Timeline: the scheme is funded until at least March 2028. Vouchers are valid for 3 months once issued.
- Scotland: Home Energy Scotland offers interest-free loans of up to £7,500 plus cashback grants of up to £7,500 through a separate scheme.
Check your eligibility with our grants checker.
Running costs: heat pump vs gas vs oil
The ongoing cost comparison depends on fuel prices and how efficiently your heat pump runs. Here are realistic annual heating costs for a typical 3-bed semi:
| Heating system | Fuel cost/kWh | Efficiency | Annual cost |
|---|---|---|---|
| Gas boiler (A-rated) | ~6.8p | 90–93% | £800–£1,000 |
| Air source heat pump | ~24.5p (elec) | COP 3–4 (300–400%) | £900–£1,300 |
| Ground source heat pump | ~24.5p (elec) | COP 4–5 (400–500%) | £700–£1,000 |
| Oil boiler | ~7–8p | 85–92% | £1,500–£2,000 |
| LPG boiler | ~8–11p | 85–92% | £1,500–£2,200 |
Based on Ofgem cap rates (Q4 2026), typical 3-bed semi heating demand of ~12,000 kWh/yr. COP (Coefficient of Performance) measures how much heat the pump produces per unit of electricity — a COP of 3 means 3 kWh of heat from 1 kWh of electricity.
The takeaway: heat pumps currently cost slightly more to run than a modern gas boiler, but significantly less than oil or LPG. If you're off the gas grid, the case is already strong. For gas-heated homes, the economics improve as the electricity-to-gas price ratio narrows — the government has committed to rebalancing energy levies from electricity bills to gas bills over the coming years.
Payback periods
Payback depends heavily on what you're replacing and whether you get the BUS grant:
| Replacing | Without grant | With BUS grant |
|---|---|---|
| Modern gas boiler | 20+ years | 10–15 years |
| Old gas boiler (G-rated) | 12–18 years | 7–10 years |
| Oil boiler | 10–15 years | 5–8 years |
| LPG boiler | 8–12 years | 4–7 years |
A new gas boiler costs £2,000–£4,000 installed and lasts 12–15 years. A heat pump costs more upfront (even with the grant) but lasts 20–25 years and will avoid any future gas boiler ban. If your boiler is nearing end-of-life, the comparison should be "heat pump cost minus the boiler you'd have to buy anyway."
What affects the price
- Property insulation — a poorly insulated home needs a larger, more expensive heat pump. Improving insulation first (loft, cavity walls) can reduce the required heat pump size and cost.
- Existing radiators — if radiators are undersized for low-temperature heating, replacements add £1,000–£3,000. Homes built after 2000 often have larger radiators that work fine.
- Hot water cylinder — if replacing a combi boiler, you'll need a new cylinder installed. Budget £800–£1,500 including plumbing.
- Pipework — older microbore pipe may need replacing with larger-diameter pipe in some sections.
- Location of outdoor unit — must be positioned with adequate airflow and within MCS noise guidelines (typically 1m from a neighbour's window). Difficult positions add cost.
- Electrical supply — some larger heat pumps need a three-phase supply upgrade (£1,000–£3,000).
How to get the best deal
- Insulate first — every £1 spent on loft or cavity wall insulation reduces the heat pump size (and cost) you need. See our EPC guide for what upgrades make the biggest difference.
- Get three MCS-certified quotes — prices vary by 30–40% between installers. Verify certification at mcscertified.com.
- Check all grants — the BUS grant stacks with some local authority schemes. Our eligibility checker shows what's available for your postcode.
- Consider your tariff — a heat pump tariff (like Octopus Cosy Octopus) gives cheaper electricity overnight, reducing running costs. See our Octopus tariff comparison.
- Add solar — pairing a heat pump with solar panels reduces electricity costs further. A combined system can cut heating bills by 40–60%. See our combined system guide.
Model your home's numbers — our heat pump calculator uses your postcode, property type, insulation level, and current heating system to estimate installed cost, running costs, and payback. It's specific to your home, not a UK average. Run the calculator →
Updated October 2026. Prices based on MCS installer data, Nesta heat pump tracker, and Ofgem Q4 2026 cap rates. Running costs assume typical 3-bed semi heating demand. This article is general information, not financial or installation advice.