The cost of heat pumps will fall by 20 to 25 per cent in the next five years, experts have said, making it cheaper for households to install them.
By the end of this decade, gas boilers will be banned in new homes with almost all having a heat pump, or other green alternative, installed instead – usually at the expense of developers before the property is sold.
Labour expects that almost all homes will end up with heat pumps eventually, with consumers having to foot the bill to replace their gas boilers when these pack in. The previous Tory Government had set a hard deadline for a ban on new gas boilers by 2035, although Labour’s Energy Secretary suggested he would scrap this.
One of the main obstacles of having a heat pump installed currently is the price, which is prohibitive to many. This is likely to fall in the future, thanks to advances in technology and as production is scaled up.
According to industry predictions from bodies such as UK Energy Research Centre, heat pump prices could reduce by 25 per cent over the next few years, which would be equivalent to thousands of pounds.
However, gas boilers will still cost less.
The i Paper asked experts how much heat pumps could cost in the future and whether more financial help is needed to encourage uptake.
How much are heat pumps?
Air source heat pumps tend to cost between £14,000 and £19,000 to install, according to the Energy Saving Trust. Ground source heat pumps cost between £28,000 and £34,000 to install, depending on how you install the pipes.
The exact price will depend on the brand, model and size of the heat pump, as well as the size of your property.
Meanwhile, the average gas boiler cost for supply and installation is £3,000.
How much help can you get towards the cost of heat pumps?
The Boiler Upgrade Scheme offers grants of £7,500 towards the cost and installation of three types of low-carbon heating systems: air source heat pumps, ground source heat pumps – including water source heat pumps – and biomass boilers. This is available in England and Wales.
Scottish homes have access to similar levels of funding through Home Energy Scotland, which can help consumers reduce the cost of installing a heat pump.
However, some homes will also have the benefit of having an additional grant that helps with the cost of insulation.
This is important as some homeowners have to pay for improved insulation and replacement radiators to make sure the system works efficiently.
Such grants include the Great British Insulation Scheme from the Government which offers support to those who have a low energy performance certificate of D to G or are in council tax bands A to D in England and A to E in Scotland or Wales.
Help includes providing free insulation such as cavity wall and loft insulation or even a new boiler.
To check if you’re eligible, you can use the Government’s online eligibility checker.
A Checkatrade spokesperson said: “By combining these grants, households can significantly reduce the upfront costs of making their homes more energy efficient and eco-friendly.
“For example, pairing insulation upgrades with a heat pump installation could yield total funding of over £10,000, depending on the specific programmes accessed.”
Will heat pumps get cheaper?
Increased competition among manufacturers and further subsidies could also contribute to reductions in prices.
Exactly how much will depend on the grants you have and how much you pay for installation.
If the subsidies remain in place as the cost of buying a heat pump from energy firms reduces, it may be possible to get one for far cheaper than you can now.
For example, if someone had a heat pump installed for £15,000, were they to go down in price by 25 per cent, the cost to you would be £11,250.
With a £7,500 grant, then you may be able to get a pump for £3,750.
However, some energy firms offer even cheaper pumps already. This includes Octopus Energy which provides installation from £500 including a £7,500 government grant.
With British Gas, it will cost from £1,199 with the grant and from £3,500 with Eon Energy.
To find out if you are eligible, you can contact the energy firms directly.
Despite the savings, the cost of installing a gas boiler is still likely to be cheaper as it averages around £3,000 now.
How much could you save on energy bills?
Heat pumps can achieve efficiency rates of 300 per cent or more, meaning they generate three times the energy for heating compared to the electricity they consume.
For a typical household, switching to a heat pump could save up to £1,000 annually on energy bills, particularly as gas prices remain volatile, according to Checkatrade.
However, it will more broadly depend on your home.
Emily Seymour, Which? Energy Editor, said: “Whether you’ll save money with a heat pump depends on your individual circumstances and your home. In a well-insulated house, a heat pump could save you money on your annual energy bills – especially if you use a heat pump optimised electricity tariff.”
Do experts think there should be more help with subsidies?
Research has shown that the increase of the Boiler Upgrade Scheme from £5,000 to £7,500 encouraged more people to install a heat pump.
Air source heat pump installations grew 57 per cent after the grant increase between October 2023 and March 2024, according to home insurer Saga which analysed Microgeneration Certification Scheme (MCS) data.
Should it be increased more, it has been suggested even more people will take up the offer of having one fitted.
A Checkatrade spokesperson said: “Additional subsidies would certainly serve to make heat pumps accessible to more households and accelerate adoption.
“Comprehensive packages that include insulation and heat pumps as a bundled solution could also offer a helpful build on existing grants. Such initiatives would ensure homes are better prepared for renewable heating systems, leading to long-term reductions in energy usage and emissions.
“Expanding public awareness campaigns about the existing subsidies is also crucial to ensure more people can take advantage of them.”
Other suggestions include the Government putting into place the Future Homes Standard, a proposed change to the Building Regulations in England.
This would end gas boiler installations in new homes and significantly increase the demand for heat pumps, allowing companies to invest and scale up production, helping bring down costs.
What does the Government say?
A Department for Energy Security and Net Zero spokesperson said: “We want to help people get a heat pump, as families can save around £100 a year compared to a gas boiler by using a smart tariff effectively, and recently announced plans to remove planning constraints to make them easier to install.
“We are also making them more affordable by providing £7,500 towards the cost through the Boiler Upgrade Scheme. Social housing residents and lower income householders will also receive funded energy efficiency upgrades – including insulation and low-carbon heating.”
