The Real Running Costs of an Air Source Heat Pump in the UK

As UK households increasingly consider switching from traditional gas boilers to more sustainable heating solutions, one question dominates the conversation: what are the real running costs of an air source heat pump? At CRG Direct, we believe in transparent, data-driven analysis to help homeowners make informed decisions about their energy future.

Air source heat pumps (ASHPs) extract heat from the outside air, even in cold weather, and transfer it inside your home. Unlike gas boilers that burn fuel to create heat, heat pumps move existing heat using electricity. This fundamental difference in operation is key to understanding their running costs.

The efficiency of a heat pump is measured by its Coefficient of Performance (COP). A COP of 3.0 means the system delivers 3kW of heat for every 1kW of electricity consumed. Modern ASHPs typically achieve COPs between 2.5 and 4.0, depending on:

Outdoor temperature

System design and installation quality

Property insulation levels

Heating system requirements

Based on current market data:

Electricity: Average 28p per kWh

Gas: Average 7p per kWh

At first glance, this appears heavily weighted toward gas being cheaper. However, the efficiency factor changes this calculation dramatically.

Let's compare heating a typical 3-bedroom semi-detached home requiring 12,000 kWh of heat annually:

Gas Boiler (85% efficiency):

Required gas input: 12,000 kWh ÷ 0.85 = 14,118 kWh

Annual cost: 14,118 kWh * £0.07 = £988

Air Source Heat Pump (COP 3.2):

Required electricity: 12,000 kWh ÷ 3.2 = 3,750 kWh

Annual cost: 3,750 kWh * £0.28 = £1,050

Result: The heat pump costs approximately £62 more per year than a gas boiler under these conditions.

During colder months, heat pump efficiency naturally decreases as the temperature difference between inside and outside grows. A system achieving COP 3.5 in autumn might drop to COP 2.2 during a cold snap.

Winter Scenario (0°C outdoor temperature):

Heat requirement: 6,000 kWh (November-February)

COP: 2.2

Electricity needed: 6,000 ÷ 2.2 = 2,727 kWh

Cost: 2,727 * £0.28 = £764

During milder months, heat pumps operate at peak efficiency:

Shoulder Season (10°C outdoor temperature):

Heat requirement: 4,000 kWh (March, April, October)

COP: 3.8

Electricity needed: 4,000 ÷ 3.8 = 1,053 kWh

Cost: 1,053 * £0.28 = £295

Our monitoring of actual installations reveals:

Property: 4-bed detached, 120m², built 1990s

Annual heat demand: 15,000 kWh

Heat pump electricity consumption: 4,200 kWh

Actual COP achieved: 3.57

Annual running cost: £1,176

Equivalent gas cost: £1,235 (assuming 85% efficient boiler)

Running costs vary significantly based on:

Insulation quality: Well-insulated homes reduce heat demand by 30-50%

Heating system type: Underfloor heating operates more efficiently than radiators

Hot water requirements: Heat pumps can provide domestic hot water but may require backup

Poorly sized or installed systems can increase running costs by 20-40%. Oversized units cycle frequently, while undersized units struggle to maintain temperature.

Modern heat pumps with optimised weather compensation can reduce running costs by 10-15% compared to fixed-temperature operation.

Time-of-use tariffs like Economy 7 or heat pump-specific tariffs can dramatically reduce costs:

Off-peak rates as low as 15p/kWh

Potential savings of £200-£400 annually

Requires thermal storage or smart control integration

Annual maintenance costs approximately £150-£200 but ensures optimal efficiency. Neglected systems can see efficiency drops of 10-20%.

Based on our analysis of hundreds of installations and market trends, we project:

Running cost parity: Heat pumps will reach cost parity with gas boilers as electricity prices stabilise and gas prices continue volatility

Efficiency improvements: New models will achieve average COPs of 4.0+ in typical UK conditions

Tariff evolution: More competitive heat pump-specific electricity tariffs will emerge

Cost advantage: Heat pumps will become cheaper to run than gas boilers

Grid decarbonisation: Increasing renewable electricity will reduce carbon intensity

Technology integration: Smart grid integration will enable further cost optimisation

Clear economic advantage: Heat pumps will be significantly cheaper to operate

Gas price pressure: Carbon taxes and infrastructure costs will increase gas prices

System maturity: Installation quality and consumer understanding will improve

While installation costs remain higher than gas boilers (£7,000-£12,000 vs £2,000-£4,000), the Boiler Upgrade Scheme provides £7,500 grants, significantly narrowing this gap.

15-year total cost comparison:

Gas boiler: £2,500 (installation) + £14,820 (running) = £17,320

Heat pump: £9,000 (installation) - £7,500 (grant) + £15,750 (running) = £17,250

Result: Near parity over the system lifetime, with heat pumps offering superior environmental benefits.

Well-insulated properties with low heat demand

Off-gas grid homes currently using oil, LPG, or electric heating

Properties suitable for underfloor heating or large radiators

Homeowners planning long-term residence (10+ years)

Poorly insulated properties requiring significant upgrades

Small properties with limited outdoor space

Homes with existing modern condensing boilers

Short-term ownership situations

Beyond pure financial calculations, heat pumps offer substantial environmental benefits:

Carbon reduction: 60-70% lower emissions than gas boilers

Air quality: Zero local emissions

Future-proofing: Compatibility with renewable electricity

The running costs of air source heat pumps in the UK are increasingly competitive with traditional gas heating, particularly when considering total lifetime costs and environmental benefits. While upfront costs remain a consideration, government grants and improving technology are making heat pumps an increasingly attractive option for UK homeowners.

At CRG Direct, we believe the transition to sustainable heating is not just environmentally necessary but increasingly economically sensible. The real cost of heating your home extends beyond your monthly bill to include environmental impact, system longevity, and future energy security.

Ready to explore whether a heat pump is right for your home? Contact our expert team today for a personalised assessment and discover how you could benefit from cleaner, more efficient heating.