Energy Facts

Heat Pump Costs & Benefits

The return on your investment for heat pump system depends on some key factors:

The installed cost of your system. For ground source heat pumps, this can vary widely depending on the cost of your external ground works. If you are building a new property, heat pump ground work costs can work out less expensive than retro fitting.
What’s the system efficiency, or coefficient of performance? For ground source, this can be as high as 4.5 over the year. For air source, a COP of 3 is more typical. A more efficient system at reasonable cost is better for your return on investment.
What’s your current heating fuel? Payback is much improved if you are currently using oil, electricity or solid fuel for your central heating and hot water. Returns are lower if you use gas for heating & hot water.
What is your current electricity tariff? Heat pumps use electricity to move heat energy from outside to in. So, the less you pay for your electricity means better returns from your heat pump. If you can use off-peak electricity at a cheaper tariff to power your heat pump, then returns can be higher – although the cost of the tank needed to store off-peak hot water can offset gains.
For heat pumps, make sure that you obtain any available grant. These are up to £2,500, and this can make a big difference to payback.

Typical returns on investment for heat pump systems range from around 6% to 15% per year depending on the factors above.