Heat pumps: how they work, costs and savings

Although there are a few different kinds of heat pumps, they generally work in the same way.  

It all starts with thermal energy (heat) that’s naturally in the air and ground. Even when it feels cold, there’s still plenty of heat there that can be used. 

Heat pumps take this heat and raise its temperature before transferring the heat to your central heating system. This is a four-step process: 

1. A liquid chemical (similar to what your fridge uses) takes heat from the air or ground. 
2. The liquid turns into a hot gas through compression.
3. The hot gas releases its heat to your central heating, warming your home. 
4. The gas cools down, turning it back into a liquid, ready to start all over again. 

This is known as a refrigeration cycle. In fact, you may hear that a heat pump works just like a refrigerator in reverse. That’s because it uses the same cycle but in the opposite direction.  This heat pump diagram illustrates the process: 

Because heat pumps move heat rather than generate it, they’re much more efficient than traditional heating systems.

With a heat pump, for every unit of electricity you use, you can get three to four times as much heat (300 to 400%) in return. Compare that to a gas or oil boiler. An A-rated boiler should convert 90% of its fuel into usable heat—meaning some of what you pay for is lost. That’s why a heat pump can be a much more efficient way to heat your home.  

The amount of heat produced for every unit of electricity used is known as the Coefficient of Performance (CoP). So, if a heat pump has a CoP of 3.0, then it gives out three units of heat for every unit of electricity it uses. 

Every heat pump has a published datasheet telling you what its measured CoP is. This published CoP is measured under specific test conditions. 

However, in real life, heat pump efficiency depends on changes in outside temperatures throughout the year. For example, heat pumps have to work harder in winter when the outside temperature is colder. Because of this, the published CoP doesn’t always help you work out what a heat pump will cost to run over the year. 

To help with this, you’ll also see a Seasonal Coefficient of Performance (SCoP) or Seasonal Performance Factor (SPF). This shows the heat pump’s efficiency averaged across the whole year. 

Heat pump installers must calculate the SPF based on the system design for your home. This calculation shows how the heat pump should perform given: 

• the average temperatures at your location 
• the size of your radiators 

Your heat pump installer should share this calculation with you before they start any work. The SPF gives you a better idea of your how your heat pump should perform, and its running costs compared to the CoP figure.  

Heat pumps are suitable for all kinds of homes. It’s a common heat pump myth that certain kinds of houses can’t have heat pumps installed.

The kind of heat pump that suits your home usually comes down to:

• your budget
• how much space you have

Use our online assessment tool, Go Renewable, to find out what renewable technologies, including heat pumps, are suitable for your home.

Air source heat pumps are the most common type of domestic heat pump in the UK and are suitable for most types of home. They’re relatively small and cheaper to install than other types of heat pump. The heat pump is normally a ‘monoblock’ that sits outside the home. The heat pump unit is around the size of two wheelie bins side by side.

Ground source heat pumps are better suited to those who have a large garden or outdoor space to run a loop of underground pipes or sink boreholes. They tend to be more efficient than air source heat pumps but are considerably more expensive to install.

For all heat pumps you need space to put a hot water cylinder, ideally inside the house. Having underfloor heating usually works well for heat pumps. You may need to upgrade any radiators to have a higher surface area, which are suitable for heat pumps.

For more information, read our guide to the differences between air source and ground source heat pumps.

If you live in a smaller property, like a flat or park home, you may be better suited to an air-to-air heat pump. These heat pumps heat your home using fans rather than radiators or underfloor heating.

• Air source heat pumps costs around £14,000.
• Ground source heat pumps cost around £28,000. This goes up to around £57,000 if you have to dig a borehole.

The cost of a heat pump installation also depends on: 

• The size of your property. 
• Whether you live in a new build or an existing house. 
• How much work is needed to adapt your existing heating system for a heat pump. 

This largely depends on what heating system you’re replacing. 

Generally, heat pumps should be cheaper to run than most other fuel types because they’re so much more efficient. 

However, if you have a newer gas or oil boiler, heat pumps are likely to be slightly more expensive to run. 

This is because electricity is more expensive per unit compared to gas or oil.  

Here are the typical savings you can expect to see from the two most common types of heat pump: 

In general, no – you shouldn’t need planning permission to install a heat pump. This is because most heat pump installations are a ‘permitted development’. 

But there are exceptions. For example, if you live in a listed building or a conservation area. It’s best to check with your local planning department before committing to installing a heat pump. 

Find out more about planning permission to install low carbon technologies. 

Your installer should also help with informing your local district network operator (DNO) that you’re planning to install a heat pump. The DNO is the company responsible for bringing electricity from the network to your home. 

Your heat pump installer will have all the information you need to complete the relevant forms and will often do this for you. 

To find out more about registering a heat pump in England, Scotland and Wales, visit the UK Government website. 

Use our free online assessment tool Go Renewable to find out what kind of heat pump works for you: 

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