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Home & garden.

Updated: 1 Jul 2022

Ground source heat pump costs and savings

We reveal how much you should expect to pay for a ground source heat pump, and how much it could save you on your heating bills.
Which? Team
Heating bill 451053

Installing a ground source heat pump can cost as much as £19,000, so you'll want to think carefully about how much you could possibly save on your energy bills.

Read on to find out if the savings you could make from a ground source heat pump are enough to justify the cost.

How much does a ground source heat pump cost?

Ground source heat pumps (GSHPs) differ in size and complexity, so pinpointing a typical cost is tricky. The Energy Saving Trust (EST) estimates it can cost between £14,000 and £19,000 to install one in your home. 

The payback period (the time it takes for the initial cost of the system to be recouped in energy savings) is also difficult to predict. This is because it depends on how efficiently your system works, the type of system you're replacing, whether you qualify for Renewable Heat Incentive (RHI) payments, how well insulated your home is, how efficiently you use the system's controls, and how you'll be using the heat generated from the pump. 

The EST estimates that, depending on what system you're replacing, an average-performing ground source heat pump could save you the following per year:

Estimated bill saving

  • Average oil heating system (£20 - £30)
  • Average gas heating system (£25 - £30)
  • Average LPG heating system (£530 - £570)
  • Average electric heating system (£1,000 - £1,090)

Figures above show potential annual savings of installing a standard ground source heat pump in an average sized, four-bedroom detached home with over-sizes radiators. Figures courtesy of Energy Saving Trust website.

Financial help is also available, courtesy of the government RHI scheme. The EST estimates the RHI scheme could provide an additional £2,335 to £2,750 a year for properties in England, Scotland and Wales. 

If you’re replacing an average gas or oil heating system, a ground source heat pump is unlikely to save much on your annual bill in comparison.

How to calculate ground source heat pump savings

A ground source heat pump can save you money, if it is well designed and installed. However, with energy prices rising, estimates of potential savings can quickly become outdated. 

To get a better idea of how much a heat pump would cost to run, and whether it would be cheaper than your existing heating system, you can make a rough calculation using your own data.

We've worked out an example, below, for a typical household currently using a gas boiler.

Piping for ground source heat pump 451051

Existing heating and hot water costs using gas

Typical household gas consumption is 12,000 kWh a year. 

Gas used for cooking makes up around 2.5% of the total (300 kWh), so the typical quantity of gas used for space and water heating is 11,700 kWh a year.

From 1 April, the average price cap for gas is £0.07/kWh, so the annual cost of gas consumption is 11,700 x £0.07 = £819. 

From 1 April, the average gas standing charge is £0.27 per day, so the annual standing charge cost is 365 x £0.27 = £98.55.

The total gas bill for space heating and hot water (excluding cooking) is £917.55.

What's your heat demand?

To calculate the cost of running a heat pump, you need to work out your household heat demand using your current annual gas consumption and boiler efficiency.

A new A-rated gas boiler must be a minimum of 92% efficient; however, studies have shown that the actual in-use performance is generally lower. Older boilers are also less efficient, so we've assumed an average of 85% efficiency.

Current gas consumption is 11,700 kWh but only 85% of that is being turned into heat, so actual heat demand is 11,700 x 0.85 = 9,945 kWh.

Potential heating and hot water costs using a heat pump

A typical ground source heat pump can generate 3.5 to 4.5 units of heat for each unit of electricity it uses. We've assumed a COP (Coefficient of Performance) of 4.0 (i.e. 400% efficient).

To deliver the heat demand of 9,945 kWh the amount of electricity required will be 9,945 ÷ 4 = 2,486 kWh.

From 1 April, the price cap for electricity is £0.28/kWh, so the annual cost of electricity for heating and hot water is 2,486 x £0.28 = £696.08

We've assumed that all households already pay the standing charge for electricity, so there's no need to add this.

Which is cheaper?

Annual heat demand
EfficiencyAnnual energy use
Energy price per kWh
(from 1/4/2022)
Annual cost of energy
for heating and hot water
Annual gas
standing charge
Total annual bill
for heating and hot water
Gas boiler9,94585%11,700£0.07£819.00£98.55£917.55
Ground source heat pump9,945400%2,468£0.28£696.08N/A£696.08

In this example, the ground source heat pump is cheaper to run, saving £221.47 a year on average. 

If your gas boiler is less efficient, or you install a more efficient heat pump, then you will see even greater cost savings if you switch to a heat pump. 

Changes in energy prices will affect future comparisons. The gas and electricity price caps rise by different amounts in April. Gas rises from £0.04/kWh to £0.07/kWh - a 75% increase - while electricity rises from £0.21/kWh to £0.28/kWh - up 33%.

If gas prices continue to rise at a faster rate than electricity, then the running costs of a heat pump will be even more attractive than a gas boiler.

Energy bills rise

Calculate your own savings

To make a similar calculation using your own data, use the following formula:

heat demand x 1/heating efficiency x fuel price (+ annual standing charge) = annual heating cost

Heat demand: You can find your fuel consumption (in kWh) on your energy bills. If you use gas for cooking, deduct around 2.5% to calculate how much is used for heating and hot water. Multiply this by the heating efficiency (i.e. if your boiler is 85% efficient, multiply by 0.85). This is your annual heat demand (for space heating and hot water).

Heating efficiency: If you know your boiler's efficiency, you can use that figure. If you know the make and model, you can check the efficiency in the product characteristics database. New gas boilers must be at least 92% efficient, but an older one may be much less efficient. The efficiency of a ground source heat pump is typically between 3.5 and 4.5. If you're thinking of installing a specific model, you can find the COP in the manufacturer's product specification. 

Fuel price: From 1 April, the average capped price for gas is £0.07/kWh and electricity is £0.28/kWh, but this varies by region and payment method, so check your bills to find your unit price.

Are there any other costs?

If you plan to replace your gas boiler with a ground source heat pump, you may also consider swapping your gas cooker for an electric one. Retaining a gas supply just for cooking will mean the standing charge is disproportionately high. 

If you terminate your gas supply, you may have to pay for removal of the meter. The cost varies according to supplier. If you don't remove the meter, you must continue to pay a standing charge.

Should I buy one? 

Ground floor heat pumps work best with underfloor heating, which requires lower temperatures than radiators. The heat produced by a ground source heat pump is at a lower temperature than other forms of heating.

Our underfloor heating guide can help you to decide if it's right for your home.

Ground source heat pumps are generally better suited to new-build properties than retrofitting to an existing home. This is because costs could be reduced if the heat pump is included as part of the building's specification, rather than having to fit underfloor heating later on. 

If you want to retrofit an existing home with a ground source heat pump, you may be able to get a grant to help pay some of the cost of replacing an old heating system.

A well-insulated house is essential to making the most of the heat generated by your ground source heat pump. Otherwise the heat escapes more easily.

Running costs can be higher if you're also using the system for your hot-water supply, and you may require a supplementary electric immersion heater to keep up with your heating needs. Find out more in our dedicated guide to electric immersion heaters.

The ground loop element should need little maintenance once it's in place. They usually come with warranties of two or three years, but should operate for 20 years or more.

Whether or not you decide to get a ground source heat pump, it's worth making sure you're on the best energy deal for you. Use Which? Switch, to compare gas and electricity prices.