Heat Pumps Explained and Cost of Installation

Heat pumps explained

Heat pumps are an environmentally friendlier way to regulate your household temperature. They extract heat from the environment and use it to heat your home and/or hot water.

During summer some can be reversed and perform cooling/air conditioning, although air conditioning is not commonly used in the UK and its use increases your carbon footprint.

They are not 100% sustainable (unless powered by renewables) as they do require electricity to run, however, as they are moving rather than generating heat, the output is greater than the input. Properly designed and installed heat pumps regularly attain around 400% efficiency.

There are essentially two basic modules in a heat pump, the heat exchanger (water heating) module and the hydraulic (hot water management) module. These can be housed together or separately allowing installation flexibility.

If domestic hot water is also required from the system a hot water cylinder will be required. If a suitable hot water cylinder is not in place, options exist to combine all elements in one or multiple units.

There will be some form of outdoor equipment to collect the heat providing medium, be it air or water.

In most systems, an electrical heating element will be included either for back up or enhanced heating, such heating elements may be present in the hydraulic modules and/or hot water cylinder.

Heat pumps typically produce a lower temperature hot water output than a gas/oil boiler, although medium and high temperature versions do exist. This means that it is important to consider “whole house” heat/hot water when designing your installation such as, improved insulation, improved radiators, improved hot water storage and even moving to underfloor heating.

Planning your system is therefore not simple but lots of accredited installers are available to advise you on different options to assure a cost effective option.

Air Source Heat Pumps

There are two different kinds of heat pumps, the first and most common is an air source heat pump, largely due to their lower upfront costs and lower space requirements. They are, however, seasonally sensitive and efficiency will vary through the year.

Heat from the air is absorbed at a low temperature into a fluid which then passes through a compressor, increasing the fluid temperature. That higher temperature heat is then transferred into heating your house and/or water (effectively a refrigerator in reverse).

There are two options of air source heat pump:

  1. Air-to-water – these extract heat from the air and transfer it to your wet central heating/hot water system. These are the most common model in the UK and are what we recommend as they are eligible for a grant from the government.
  2. Air-to-air – these require an air circulation system to move the hot air around your house and will not provide you with hot water. They are not eligible for the RHI scheme ( see grant for details).

Ground Source Heat Pumps

Ground source heat pumps are beneficial if you have the space and can afford the upfront investment, as the pump absorbs heat from the ground via a ground loop, the longer the loop the more heat can be absorbed. Because the temperature underground stays fairly constant throughout the seasons, these can be used efficiently all year round. The cost of a ground source heat pump, however, is likely to be higher over its lifetime.

Ground loops can be horizontal or vertical depending on space available and geology and do require design expertise. It is also possible to extract heat from water (lakes etc.) but this is the most complex of all and solutions need to be expertly designed.

Cost of Installing a Heat Pump

Installing a heat pump

As mentioned above, a ground source heat pump does have a higher upfront cost than an air-source heat pump. Moreover they are difficult to pinpoint a typical cost due to the differences in size and complexity.

A ground source heat pump can range anywhere between £10,000 for a smaller two bedroom house with a horizontal loop to £35,000 for a larger 4-6 bedroom house with a vertical loop.

Air-source heat pumps will cost you less but are seasonally less efficient, meaning a smaller reduction in bills, and you will receive smaller RHI payments. These usually range from about £5,000 to £15,000 depending on the size of your house.

Due to the variance in price, these ranges are only average estimates. We recommend getting a full, accurate quote from a supplier before making your final decision on a heat pump.

Heat pumps do have substantial upfront cost no matter which you choose, however, there are government grants available to help with this and more often than not they will payback in the long run.

Ground Source vs. Air Source

As stated by Energy Saving Trust, Renewable Heat Incentive (RHI) payments are also higher for ground source heat pumps compared to payments for air source heat pumps, meaning you will earn more in the long term when opting for a ground source heat pump.

Below is a comparison between the two types of pump. It mostly comes down to cost and space, but either way you will be doing your bit for the environment by using a more sustainable source to heat your home and save money on your bills!

ground source vs air source heat pumps
Ground source vs air source heat pump

Both air source and ground source heat pumps require very little ongoing maintenance, an annual check up by a professional is recommended, particularly before winter season for an air source heat pump.


If you’re interested in installing a heat pump, check out our recommendations here.

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