Are heat pumps cost effective?

Are air and ground source heat pumps cost effective? If the relative size of the collector, pump or heat emitter system is incompatible the answer may be NO! David Thorpe goes back to basics, explores the options and cautions against snap decisions.

How do heat pumps work?

Ground source heat pumps cost between £9,000 - £16,000 installed

Ground source heat pumps cost between £9,000 – £16,000 installed

Heat pumps use the free heat from the sun that is stored in the ground or the air, and concentrate it in a much smaller area (i.e. a building) using a pump. They can be used for space heating and sometimes hot water.

A heat pump operates in a similar way to a refrigerator. It includes a refrigerant that passes through a compressor and a condenser too.


Heat pump comparison

The efficiency of heat pumps is measured by their co-efficient of performance (COP); the ratio of heat produced per unit of electricity consumed in pumping that heat. The higher the ratio, the more efficient the unit.

A COP value of 3 means that you get 3kWh of heat output for every 1kWh or electricity used to run the pump. Higher COP values represent relatively more efficient heat delivery.

Heat pump manufacturers’ estimates of their COPs should be treated with caution, because real operating conditions will not reflect the test conditions.


How much do heat pumps cost?

The average cost including installation at 2013 prices is, for a:

  • ground source heat pump:  £9,000 – £16,000
  • air source heat pump: £6,000 – £10,000


Is a heat pump the right heating system for your home?

The answer depends on what fuel it is replacing. The Energy Saving Trust advises that the system will pay for itself much more quickly if it is replacing an electricity or coal-fired heating system; the same is true for oil.

Heat pumps are not generally a good idea for homes using mains gas. If LPG is being used, there may be cost savings, but there are unlikely to be carbon savings.

Both types, but especially air source, can perform better with underfloor heating systems or warm air heating than with radiator-based systems. This is due to the lower water temperatures required. Delivering to radiators has, on average, 86% of the efficiency of delivering to underfloor heating.¹

It’s also essential that the building is first well insulated and draught-proofed.

Increasingly, heat pumps are being inappropriately advocated and installed by new entrants into the sector as a solution to almost any heating problem, and there is a danger of this trend increasing with the advent of the Renewable Heat Incentive and the Green Deal.


Can I use a heat pump for hot water too?

There is an efficiency loss in supplying hot water too. It is 13% less efficient to do so, than just supplying space heating alone. This is because the water delivered to taps has to be a higher temperature than water used to feed underfloor heating.¹


Domestic heat pump sizing

The standard used to test and quote for most packaged heat pumps is BS EN 14511. Make sure this is being used by your installer.

This, for example, specifies test conditions of 7°C outdoor (source) air temperature for air-source heat pumps and a return and flow temperature of 40°C and 45°C respectively.

It is quite possible for air source heat pumps to use more energy than the heat source they are replacing if they are specified or installed incorrectly.


Heat pump installation

An air source heat pump is easily installed. The pump is a large unit placed outside the house.

Noise coming from the pump can be a problem. It is important to check before choosing a model whether the noise level will be tolerable to everyone within earshot.

A ground source heat pump is harder to install. This is reflected in the cost. There are two types of collector: a “slinky”, which is a coil buried about 2 metres underground, and a borehole, which will go directly down and deeper.

Ground source heat pumps can be confused with geothermal energy. Strictly speaking, geothermal energy is derived from hot rocks that can be relatively close to the Earth’s surface in some parts of the world. It requires a deeper borehole to access them: one half to one kilometre. Ground source heat pumps’ boreholes, by contrast, may be up to 100m deep.


Air heating systems

Air source heat pumps cost between £6000 - 10,000 installed

Air source heat pumps cost between £6000 – 10,000 installed

Heat pumps can transfer their heat to air or water. If air, a condenser inside heats the air at the point where it is supplied to the building.

Filtered, pre-warmed air is directed into the building from vents by a ground floor wall.

One advantage of air-destination heat pumps over the water-destination variety is that air into which the heat is passed typically has a lower temperature (called the sink temperature) than that of water. This results in a higher COP and increased heat output.


Is a heat pump’s cost justified?

Graham Stringer (Labour MP for Blackley and Broughton) has cautioned against the indiscriminate use of heat pumps: “Heat pumps are a big investment for both householder and taxpayer, and both deserve to be assured that they will be worth the money.”

Stringer quotes the Energy Saving Trust report above, which showed that “only one of the 22 properties that had ground source heat pumps achieved the implicit minimum EU directive COP, and that only nine of the 47 sites with air source heat pumps achieved that standard”.


Heat pump problems

The report put the blame mainly on poor installation and recommended changes to the training of accredited installers under the Microgeneration Certification Scheme.

The main errors related to poor sizing of all aspects of the system:

  • the collector
  • the pump
  • the emitters (heat distribution system)

Air bubbles were also found in the loops, which should not be present. Like any heating system, it needs bleeding upon installation.

For ground source, the coil needs to have solid contact with the ground.

There still aren’t enough systems in the UK that have been present for long enough, and monitored sufficiently, in order to arrive at independent verification of their efficacy.

The Energy Saving Trust said that it would update its information last December, but this is still awaited.


Domestic heat pump sizing: Assessing heat demand

When assessing the heat demand of a property, this must be done from actual bills, preferably for more than one year, to account for yearly variations in the weather and heating requirements.

If bills are not available, then your contractor should be using EN ISO 13790: ‘Energy performance of buildings – Calculation of energy use for space heating and cooling’, which gives a method for the assessment of the annual energy use for spacing heating and cooling of a residential or non-residential building.

Furthermore, CIBSE Guide A contains comprehensive degree day information for different locations around the UK. Heating degree days can be used in conjunction with EN 12831 and an assessment of the appropriate base temperature to determine a building’s heating energy requirement. More information, together with free data, can be found at

The Standard Assessment Procedure (SAP) for dwellings should not be used as it is not designed to accurately determine the heating and domestic hot water energy requirements of real dwellings.


Heat pump efficiency

The efficiency of a heat pump should be determined by the whole heating system, not just the pump.

Total system efficiency includes the following factors:

  • the source heat
  • the heat supplied to the space heating circuit
  • the heat of hot water used (as opposed to heat supplied to the hot water cylinder)
  • the electricity supplied to the heat pump, supplementary heating units, any domestic hot water cylinder, and to any hot water circulation pumps. This should be the minimum necessary.

The exact efficiency found in practice depends upon the difference in temperature between the target and the source at any one time, and so will vary from day-to-day.

A survey by the Heating Strategy Group of the UK Energy Efficiency Partnership for Homes found that heat pumps come out around as efficient (in terms of cost and carbon) as gas boilers, because of their electricity use (unless, for carbon impacts, the property is on a renewable tariff – and why not be?).

If the target temperature is underfloor heating at 18°C, and the source is 2°C, then less energy is required to concentrate and pump the heat than if the source is colder (as in air source heat pumps in freezing weather) or if the target is hotter (as in a radiator-based heating system where the target temperature may be 60°C).

COP Net kgCO2 reduced/kWh of heat supplied
Table 1: Carbon displacement of heat pumps based on a factor of 0.591 kgCO2/kWh in the UK SAP 2009, taken from Tom Naughton, xCO2
3.2 0.031
3.5 0.060
4.0 0.081


Air or ground source heat pump – which is best?

This is why ground and water source heat pumps are generally more efficient than air source, despite being more expensive to install; in winter, the temperature of the air outside is generally much lower than that of the ground two or three metres below the surface.

Air source heat pumps

Seasonal performance factor for an air source heat pump

Seasonal performance factor for an air source heat pump – click to enlarge

The colder it is, the less efficient they become and the more warmth you need. In mild weather, the COP may be around 4, but at temperatures below around 8°C (17°F) an air-source heat pump can achieve a COP of 2.5 – below the magic 3 level at which carbon savings are realized.

The average COP over seasonal variation is typically 2.5–2.8, but obviously this depends how cold it gets in the winter. Of course, it will never reach 1, but it will be less efficient than gas or biomass.

Then there’s noise: the exterior pump – around 1.2m x 0.7m x 1m tall – generates around 50dB at full fan speed at one metre distance; similar to that of an air conditioning unit.

The heat exchanger unit, which goes inside, is about the same size as a fridge, around 1.8m tall. The noise level is about 42dB at one metre distance, similar to a large refrigerator.

Ground source heat pumps

Heat pump loop in its trench

Heat pump loop in its trench – once filled, solid contact with the earth is essential

For ground source heat pumps, apart from the digging, there will need to be delivery pipes passing under an exterior wall (typically a French window or other door). They are more expensive but the payback is reduced, financially and carbon-wise, if a hole is being dug anyway, for example for an extension’s foundations.

They have a longer life expectancy (typically 20–25 years for the heat pump equipment itself and up to 50 years for the ground coil), and are a great idea if the opportunity’s there.

The ideal solution is a ground source heat pump, where the ground is well above freezing (10°C), outputting to radiant heating (underfloor or skirting), especially if it is replacing electric heating.


Getting advice

The Heat Pump Association (HPA) provides guidance on installation and choosing a consultant.

Amongst their recommendations are to check:

  • that any installer is registered with MCS (Microgeneration Certification Scheme) by asking for their number and check online
  • which certification body has certified them
  • with that body that there are no outstanding issues with the installer
  • if they are also members of the REAL assurance scheme, and of any recognised Trade Association (HPA, HHIC, B&ES etc)
  • if ground source heat pumps are being considered, they are members of the Ground Source Heat Pump Association (GSHPA).


Grants for heat pumps

A grant will always make the installation of a piece of equipment more cost-effective. However, grants are not available for everyone.

The Renewable Heat Premium Payment (RHPP) covers most common heat pumps (air to water, ground source or water source but not air-to-air and exhaust-air heat pumps), but it runs out at the end of March 2013 and is only available for people not on the gas mains.

The Renewable Heat Incentive (RHI) is currently only available for business users. These users will get 4.7p per kilowatt hour for small heat pumps under 100 kW. The domestic version will be available sometime in the summer 2013. It is likely that the tariffs will be:

  • air source heat pumps (6.9-11.5p/kWh)
  • ground source heat pumps (12.5-17.3p/kWh)

Payments will be made to householders over seven years for each kWh of heat produced for the expected lifetime of the renewable technology and based on deemed heat usage.

The Green Deal is now live, and does cover heat pumps. Whether they are appropriate will be determined by an assessor. As with all of the Green Deal, any savings will be reflected in the electricity bill, but if a pump is now being used for heating where before, no pump was used, the electricity bill is likely to go up even though the fuel bill will come down. This is a perverse result of the Government having chosen to link the loan repayments to the electricity bill, not over fuel bills.

The same applies to deals coming from utility companies under government-mandated schemes to tackle fuel poverty, such as the Energy Company Obligation.


Heat pump maintenance

Most systems come with a 10 year warranty. They should operate for at least 20 years. A service agreement should see an annual or biannual check, as with most boilers. With air source heat pumps, the inlet must be kept free of blockage such as leaves. The central heating pressure gauge in the house should be checked from time to time, as with conventional boilers.


Planning permission

Air source heat pump installations in Wales and Northern Ireland require planning permission. In England they are generally considered to be Permitted Developments and do not need planning permission (details here). In Scotland they don’t need planning permission provided certain conditions are met, including the pump being sited at least 100m from the nearest neighbouring residential garden. Always check with the local planning office.



Heat pumps can be cost effective with certain configurations. Air to air heat pumps and ground source heat pumps connected to underfloor heating are most likely to be successful. However, trials suggest too many recently installed heat pumps are underperforming due to poor sizing and installation errors.

Choose your installer with care. When you are presented with a possible solution, take time to visit people with homes like yours who already have this solution installed to find out if this holds true. SuperHome Open Days offer opportunities to visit people with heat pumps in a variety of configurations and property types.


Find out more – visit a refurbished home

You can find out more about Air source, ground source, water source and exhaust air heat pumps at green open house events in September. Speak to real homeowners as they share their personal experience of refurbishing their homes as part of SuperHome Open Days. SuperHomes are older homes refurbished by their owners for greater comfort, lower bills and far fewer carbon emissions – at least 60% less! Entry is free. Book now.

Also see:
Energy Saving Trust heat pump trial Phase 2 Report
A satisfied air to air heat pump owner
Mill renovation with water source heat pump
Are biomass boiler costs justified?

Electric heat pump performance estimator website

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1. Detailed analysis from the first phase of the Energy Saving Trust’s heat pump field trial, March 2012.

© David Thorpe Jan 2013. David is the author of Sustainable Home Refurbishment: The Earthscan Expert Guide to Retrofitting Homes for Efficiency.