How much does a heat pump cost?

HVACBlog24/04/2023

So, you’re contemplating investing in a heat pump? Heat pump technology has come a long way and these sustainable have become efficient solutions for effectively heating homes in most climate zones. But many consumers are hesitant to purchase a heat pump due to the high initial investment. To address concerns consumers may have, let’s look at air-source heat pump costs, air-source heat pump grants and rebates available, and how heat pump energy efficiency can save you money. We’ll be using the UK market as a basis to examine the overall costs involved in investing in a heat pump and why now is as good a time as any to buy.

General Cost of Investment

Let’s look at the general price range of purchasing and installing a heat pump based on the UK market. The cost of air-source heat pump equipment starts at approximately £5,000. Prices may vary depending on the efficiency, brand, and capacity. In addition, the installation cost of an air-source heat pump is at least £6,000, which will include removing or replacing an existing boiler system if needed. ¹⁾ However, grants and rebates from local governments along with high efficiency helps to offset the upfront costs.

1) https://heat-pumps.org.uk/how-much-does-an-air-source-heat-pump-cost-uk/

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Grants and Benefits

Like the UK, governments in Europe and North America are offering heat pump grants and rebates to reduce the burden of an initial investment in a heat pump system. While these benefits curb the impact of investment, they won’t last forever. The Boiler Upgrade Scheme in the UK, under the Heat and Building Strategy, offers up to £5,000 for the installation of a heat pump until 2025.²⁾

Furthermore, some governments have gone so far as to ban the installation of gas boilers altogether. This means that heat pumps are not just a sound choice, but they may be a necessity going forward. The time to invest in a heat pump really is now!

2) https://heat-pumps.org.uk/

Home Heating Cost Savings

Even when receiving a grant or rebate from the government, the initial investment required for a heat pump can still be high. However, the high-efficiency operation of heat pumps can reduce energy costs year-over-year. Assuming both heat pump and conventional boiler operate under the same conditions, the total cost of energy consumed for space heating and hot water are significantly different.

Let’s compare the difference in terms of two different factors, space heating, and hot water. Following is the condition for calculating annual operation costs . Of course, the figures below are merely an example of potential yearly energy costs and these calculations will vary depending on factors such as regional energy prices and the installation environment.

- Based on a two-floor house of 200m2, requiring 25,000kWh/year for space heating and 5,093 kWh/year for hot water (4 people in the house, 3.488 kWh per day, per person)³⁾
- We will compare the 4.3 COP air-source heat pump and the 95%-efficiency gas boiler3)
- Gas price = £0.10, Electricity Price = £0.14373)

3) https://www.greenmatch.co.uk/blog/2014/08/the-running-costs-of-heat-pumps

For the space heating with a heat pump, as shown in the below calculation, the annual cost is around £835. If the same calculation is applied to the gas boiler and compared to that of the heat pump, a user may save up to £1,790 for annual space heating.

─ Heat pump [(25,000kWh/year) / 4.3] x £0.1437 = £835 / year
─ Conventional Boiler [(25,000kWh/year) x 1.05] x £0.10 = £2,625 / year

Let’s have a look at hot water. A hot water supply with a 4.3 COP heat pump works out to £170 / year using the calculation below. If calculated the same way with a conventional boiler, the difference in annual cost is up to £365.

─ Heat pump [(5,093kWh/year) / 4.3] x £0.1437 = £170 / year
─ Conventional Boiler [(5,093kWh/year) x 1.05] x £0.10 = £535 / year

If we add the above numbers together to get the total cost for each system, compared to when using a conventional boiler, the user of a heat pump can expect beneficial savings of up to £2,155 for space heating/hot water.

According to the US Department of Energy, heat pumps can significantly reduce electricity consumption. Heat pumps are up to 400% efficient, meaning users will enjoy more heat from each kW of electricity they use and spend less money on annual energy bills.⁴⁾

4) https://www.energy.gov/energysaver/heat-pump-systems
* The efficiency ratio is to help general understanding and is based on the Coefficient of Performance (COP) 4. The actual efficiency may vary with water and outside temperatures.

Just like with each facet of life, timing is everything and this applies to the heat pump market as well. We hope this summary of air-source heat pump costs assists you in taking the next step to investing in a heat pump. In order to truly take advantage of an air-source heat pump like one of the LG Therma V heat pump solutions, now is the time to act. Enjoy the benefits provided in your local region and start saving before it’s too late.