Cost of running heat pump ‘27% more than gas boiler’

The annual cost of running a heat pump in the average home is now around £1,251 this year. That is 27 per cent more than running a traditional gas boiler.

Bills are soaring due to the rising energy price cap, which limits how much suppliers can charge for gas and electricity. Theywill increase by 54 per cent next month, meaning the average home will be paying £1,971 over a year. This means gas boilers will cost £400 more to run than previously. But they are still hundreds of pounds cheaper than using a heat pump, new analysis has found.

The cost of heating the average home with a new gas boiler will climb from £584 to £984, according to analysis of Ofgem figures by the Energy and Utilities Alliance trade body. Meanwhile, the cost of the equivalent amount of heat generated by a heat pump running at permitted efficiency levels will rise from £919 to £1,251. This means that an average home heated using traditional means, such as a gas boiler, should be saving roughly £267 over the course of a year, despite seeing a bigger rise in bills. But they would emit around 1,415kg more carbon over the year than heat pump users, the EUA said.

For larger homes the cost difference is even more dramatic. The cost of running a heat pump over a year in a five-bedroom house will increase from April from £1,301 to £1,773.  Meanwhile, the cost of heating the same house with a gas boiler would increase from £787 to £1,352, some £421 less than a heat pump.

The Prime Minister has vowed to wean British households off natural gas as part of his pledge to hit net zero by 2050. By 2025 builders are due to be banned from fitting conventional gas boilers in new-build homes. There are also plans by 2035 to ban every household from buying a new boiler.

Over 2m new boilers are now installed each year. Currently around 30,000 hear pumps are installed per year but the Government wants 600,000 heat pumps to be installed each year by 2028.

Installations come at a considerable cost. Purchasing and installing a heat pump can typically cost between £12,000 to £15,000 – as opposed to around £2,000 for a high efficiency gas condensing boiler.

Poorly insulated and drafty homes also lower a heat pump’s efficiency, raising running costs and carbon emissions. This means households may have to spend additional money on upgrading to ensure their heat pump runs effectively.

For older and listed homes costs can be far higher, with some homeowners incurring costs of more than £50,000 for the insulation, excavation and new radiators necessary for a ground source pump to work effectively.