Have Air Source Heat Pumps just become more affordable?

21 October 2021

The UK Government has announced that from April 2022 it is introducing a clean heat grant, available to domestic homeowners to replace existing gas boilers with heat pumps.

A £3.9bn package of funding has been established to decarbonise homes and drive down the cost of clean heat. The government has set aside £450m for its new Boiler Upgrade Scheme, helping to make the cost of installation of heat pumps more comparable with replacement gas fired boilers. The £5,000 grant will help 90,000 homes in the UK move from fossil fuel heating to a greener electric heat pump system.

At Ridge we have experience in retrofitting heat pumps to existing residential and commercial buildings. Before you make the switch, here are a few things you should know:

First things first, what is an air source heat pump?

An air source heat pump is a system that uses heat from the air to heat water and in turn heat your home. It sits outside and uses an evaporator, compressor, condenser and expansion valve (i.e. the refrigerant cycle) to heat your building – think of it as a fridge, but in reverse.

Will a £5,000 grant make the installation of a heat pump cheaper than replacing my boiler with a new gas boiler?

That entirely depends on your existing heating system and effectiveness of your insulation. A typical boiler replacement will cost between £2,000 and £4,000, whereas a typical air source heat pump installation could cost between £5,000 and £8,000. However, if you have a combi boiler, you will also need a hot water cylinder £1,000 to £2,000. Additionally, heat pumps typically work at a lower temperature (heat pump: 45°C, boiler: 80°C) and therefore the output of your existing radiators will reduce significantly. To heat your home sufficiently, these will also need replacing at a cost of £3,000 to £5,000.

If you have underfloor heating, then you will be fine as your underfloor heating is already working at a low temperature. Depending on your dwelling, you could consider reducing the heat loss by insulating walls and roofs, or by replacing windows, potentially removing the need to replace radiators.

In summary, the grant is unlikely to make a heat pump cheaper than a gas boiler replacement, but it will certainly go a long way to make it a more viable solution for your home.

Will an air source heat pump reduce my energy bills?

In short – no. Currently, the cost of electricity is approximately 3.5x more expensive than the cost of gas. Coincidently, heat pumps are typically 3.5x more efficient than gas fired boilers and therefore the efficiency and costs offset each other. However, through experience, we have noticed that heat pumps are more expensive to run when the weather is at its coldest, but cheaper as it warms up due to their efficiencies at different external temperatures. While we are already seeing wholesale hikes in gas prices, it is envisaged that over time the cost of gas will rise at a higher rate than electricity and, in the future, running an air source heat pump is likely to cost less than a gas boiler.

Before thinking of replacing your boiler, and to make the most of saving money on energy bills, make sure your home is insulated to a good level. With 25 million UK homes requiring insulation to meet climate targets by 2050, better insulating your homes can dramatically improve the efficiency of heating systems such as air source heat pumps.

I have heard air source heat pumps are noisy and will take up lots of space in my garden. Is that right?

The location of an air source heat pump must be carefully considered as they do generate noise and should not be located directly outside noise sensitive areas such as bedrooms windows. Also, air source heat pumps require good air circulation to work efficiently, so you cannot cover them up once they are installed. The good news is, they do not require planning permission as they are regarded as permitted development, providing you adhere to the regulations on the planning portal.

What should I do if my boiler fails before the grants are available in April 2022?

If you would like an air source heat pump installing prior to April 2022, there is already a government scheme in place to assist, the Renewable Heat Incentive (RHI). Unlike the proposed Boiler Upgrade Scheme, the RHI is paid to you over a seven-year period and the payments are calculated based on your property type and usage. Higher usage means higher RHI payments. If you want to apply for the RHI scheme, you need to ensure that your air source heat pump is installed by a contractor that is accredited by the Microgeneration Certification Scheme (MCS) and that the RHI criteria are strictly adhered to. Alternatively, you can have a gas fired boiler installed.

Considering all the above, why should I replace my boiler with a heat pump?

Even with the proposed government grant, it may not be cheaper to replace your gas boiler with an air source heat pump. In addition, an air source heat pump may not reduce your energy bills. So why should you make the switch?

Don’t just replace gas for gas.

If your gas boiler is working efficiently and is in a good condition, maybe you shouldn’t switch at this time. But if it is in a poor condition and you are going to replace it anyway, then an air source heat pump would be a good option for one key reason: reduced carbon emissions.

Fundamentally, as the electricity grid uses more renewable energy sources, the carbon emission factor of electricity reduces. The carbon emission factor for gas will always be the same. At this moment in time, the carbon emission factors for gas and electricity are very similar, however, as noted earlier, air source heat pumps are approximately 3.5x more efficient than gas boilers – meaning you could save almost two thirds in carbon emissions from your heating system.

Less carbon emissions means a better environment for you and future generations, and this will only improve further as the electricity grid utilises more renewable energy sources. But remember, insulating your home is crucial to saving energy and money on bills.

If you require any further input on heat pumps (residential or commercial), please get in contact with Ridge and Partners LLP who would be glad to assist.

Dan Fisher CEng MIET
Building Services Engineer