Heat pump running costs - A comprehensive guide

Curious about how much heat pumps cost to run per day, or the total annual cost? On average, running a heat pump costs around £3.50 per day, and £1320 per year based on todays figures! This can vary based on factors like electricity rates and your heat pump’s efficiency. In this guide, we’ll explore these factors in detail to help you get a clear picture of your daily and yearly heating expenses, we'll look at air source heat pump and ground source heat pump running costs, and if they cheaper to run than traditional gas boilers?

Factors influencing daily costs

Daily heat pump running costs depend on several factors: efficiency, property insulation, and outside temperature. These elements determine the energy consumption and overall cost of heating your home and producing hot water. Let's look at these factors in more detail:

Efficiency
Efficiency plays a key role in determining how much it costs to run your new heating system. Think of it this way: these devices are like magic machines that give you three times the heat for every unit of electricity they consume. That's a 300% efficiency rate! In technical terms, we often use something called the Seasonal Coefficient of Performance (SCOP) to measure this, and it's usually around 3.4. This impressive efficiency score is what makes them a smart choice for heating your home without breaking the bank over time.

Even in chilly climates, modern air source heat pumps can keep up, maintaining a Coefficient of Performance (COP) of about 2.8. So, whether it's underfloor heating or another system, these devices keep your home warm efficiently, helping you save on electricity bills.

The more efficient your system, the lower your heat pump running costs will be, which means more money in your pocket in the long run!

Property Insulation
Think of property insulation as your home's cozy blanket. The better the blanket, the less your system has to work, and that means lower running costs. Upgrading to quality insulation, like cavity wall or loft insulation, can dramatically cut down on what you spend to keep your home warm. Older houses might have insulation that's not quite up to modern standards, which will make your system work harder.

Good insulation is key to slashing those daily costs. By keeping the heat in, you use less energy to stay warm. So, if your home could use a little insulation love, it might be time to consider an upgrade to help your system do its job more efficiently. It may be obvious to point out but despite having quality insulation if your household has a super high heating demand your bills will be higher!

Outside Temperature
The weather outside can really mess with your system's mojo. When it's freezing out, your heat pump system has to work overtime to produce heat and hot water, which can bump up your bills. Those chilly winter days can put a dent in its efficiency, leading to higher costs.
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Temperature swings can directly affect how well your system performs, affecting heat pump running costs especially when it gets nippy. It's important to keep an eye on how the seasons impact your heating costs and plan ahead to ensure smooth operation all year round. 

Heat pump running costs vs gas boilers

Air source heat pumps (ASHP)
Air source heat pump running costs are estimated to be £1,360 per year, which equates to around £3.73 per day. Air source heat pumps operate at about 300% efficiency, meaning they produce three units of heat for every unit of electricity consumed. While they are energy-efficient, their running costs can be influenced by the relatively high cost of electricity compared to gas.

Ground source heat pumps (GSHP)
Ground source heat pumps typically have lower running costs, with an estimated £939 per year or around £2.57 per day. They tend to be more efficient than air source heat pumps due to the stable underground temperature, which provides consistent heat extraction throughout the year. This makes them a cost-effective choice in the long run, despite higher initial installation costs.

Traditional gas boilers
Traditional gas boilers have an annual running cost of £1,240, or roughly £3.40 per day. The average gas boilers operate at about 90-95% efficiency, making them much less efficient than heat pumps but still widely used due to lower upfront installation costs and the relatively lower price of gas compared to electricity.
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Which is the best option?
Ground source heat pumps are the most cost-effective to run, but they have high installation costs. Gas boilers have moderate running costs and are cheaper to install, but they rely on depleting fossil fuels. Air source heat pumps are the most expensive to run, but they are much more efficient than gas boilers and better for the environment. If upfront cost isn’t an issue for you, switch to renewable energy in the form of modern ground source heat pump technology offers the best long-term savings.

How to calculate your heat pump's daily cost

Calculating the daily running cost of your ground or air source heat pump involves a few key steps.

Steps:

1. Find out how much energy your heat pump uses annually (usually provided by the manufacturer or your energy provider).
2. Look up your current electricity rate from your energy bill (e.g., £0.20 per kWh).
3. Multiply the annual energy consumption by the electricity rate to get the total annual cost.
4. Divide that total by 365 to find the daily running cost

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This formula will give you the estimated daily cost of operating your heat pump.
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Adjusting the electricity price according to your specific tariff is essential for accurately computing the daily operation costs of a ground or air source heat pump. By understanding these calculations, homeowners can better manage their energy expenses and optimise their heat pump’s performance.

Reducing your heat pump's daily running costs

There are several strategies homeowners can adopt to cut down on their heat pump’s daily running costs. Regular maintenance, like cleaning filters and removing air from ground loops, is important for ensuring smooth operation and keeping costs in check. Smart thermostats can help optimise usage during off-peak electricity rates, further slashing daily expenses.

Tweaking the heating curve can significantly reduce costs by improving the heat pump system’s efficiency. Keeping the system running for longer periods can also boost its efficiency and lower overall expenses. Using the heat pump system as the main heating source can decrease reliance on additional systems, reducing ongoing maintenance costs.
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Connecting heat pumps to solar panels can lower reliance on grid electricity, cutting down on energy bills. Installing solar panels with a battery allows you to store energy for later use, further decreasing electricity costs. Green tariffs also offer savings on running expenses.

Installation costs

Of course actual figures will vary for each heat pump installation but on average installing an air source heat pump system typically costs between £9,000 to £14,000 and the cost to install a ground source heat pump in the UK can range from £15,000 to £30,000. These expenses can vary significantly based on the modifications needed for your home. Generally, these systems are pricier to purchase and install compared to gas boilers.

However, there is good news for those moving into renewable energy, the UK government offers financial support of £7,500 for system installations under the Boiler Upgrade Scheme. This assistance can help reduce the initial investment, making them a more viable option for many homeowners.

Though the upfront costs are higher, the long-term savings and environmental benefits make these systems a cost-effective choice over time.

Long-term savings and environmental impact

Heat pumps have a much lower environmental impact than traditional heating systems like gas boilers, as they transfer heat from the environment instead of burning fossil fuels, leading to reduced carbon emissions when heating homes.

​Switching from a gas boiler to an air source system can reduce a household’s carbon emissions by up to 3 tonnes of CO2 annually, similar to planting around 150 trees each year. These long-term financial savings and significant environmental benefits highlight the advantages of investing in this technology.

​Conclusion

Understanding the daily and yearly running costs involves considering various factors, including efficiency, insulation, and outside temperature. Heat pumps offer significant long-term savings and environmental benefits compared to traditional heating methods like gas boilers. By taking proactive steps to maintain and optimise their systems, homeowners can achieve substantial cost savings.
The initial costs may be higher, but government grants and the long-term financial and environmental benefits make them a worthwhile investment.

​Through real-world examples, we’ve seen the potential for significant energy savings, smaller electricity bills and reduced carbon emissions. Embracing renewable energy can lead to a more sustainable and cost-effective future for home heating systems. Get a quote from us for supply and fitting of your new heat pump system today!

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