Heat pump costs are 'putting people off' installing them, study finds

British homeowners are being put off installing environmentally-friendly heat pumps by the high cost which has not reduced over the past decade, a study found today.

Researchers said the systems only play a 'marginal role' in heating UK homes - and installation numbers remain low compared to traditional, fossil fuel-based systems.

An average air source heat pump costs about £10,000 while a ground source one is £20,000, the academics estimated - figures which have hardly changed since 2010.

Ground source pumps incur far higher installed costs than air source versions because of the extra costs of trench excavation, borehole drilling and pipework.

The study by the University of Edinburgh and Imperial College London said the high costs mean ambitious Government targets for installations are set to be missed.

Projections suggest a fall of 20 to 25 per cent in installation costs by 2030, but the study said this also 'falls significantly short of the targets' set by the Government.

The experts said it costs an average of £3,000 to install a traditional gas boiler – 30 per cent of the average price of air source pumps and 15 per cent of ground source. 

Ignoring any available Government grants or loans, achieving cost parity with air source heat pumps would therefore require a 70 per cent drop in installation costs.

The Government's Boiler Upgrade Scheme offers grants of £7,500 towards a heat pump - a greener alternative to a gas boiler which takes heat from outside and pumps it back into buildings to warm them up.

What are heat pumps and what do they cost? 

AIR SOURCE HEAT PUMPS

Average cost: £10,000

Air source heat pumps absorb heat from the outside air at low temperature into a fluid to heat your house and hot water. They can still extract heat when it is as cold as -15C (5F), with the fluid passing through a compressor which warms it up and transfers it into a heating circuit.

They extract renewable heat from the environment, meaning the heat output is greater than the electricity input – and they are therefore seen as energy efficient.

There are two types, which are air-to-water and air-to-air, and installing a system costs up to £8,900 once the £7,500 Boiler Upgrade Scheme grant has applied. But it can also be significantly less, depending on the size of your home and its insulation.

GROUND SOURCE HEAT PUMPS

Average cost: £20,000

Ground source heat pumps use pipes buried in the garden to extract heat from the ground, which can then heat radiators, warm air heating systems and hot water.

They circulate a mixture of water and antifreeze around a ground loop pipe. Heat from the ground is absorbed into the fluid and then passes through a heat exchanger.

Installation costs between £15,000 to £30,000 depending on the length of the loop, and running costs will depend on the size of the home and its insulation. The £7,500 grant will lower the price on the installation.

The systems normally come with a two or three year warranty - and work for at least 20 years, with a professional check every three to five years.

The study concluded that Government policies should be based on 'realistic assessments of likely cost reductions', and 'develop incentives that can address the relatively high upfront costs of some low carbon technologies'.

Dr Mark Winskel, of the University of Edinburgh's School of Social and Political Science, said: 'While there is a growing policy consensus that heat pumps will pay a key role in decarbonising home heating, there are some stubborn economic challenges.

'Our research suggests the need for realistic expectations about heat pump installed cost reductions, and also, introducing targeted support measures to reflect their competitive running costs and wider benefits.'

Systematic evidence review techniques were used by the academics to analyse historic and forecast data for the installation costs of heat pumps - considering the type of home, technology design and the wider heating system.

The experts also assessed equipment and non-equipment costs, and factors affecting this such as global manufacturing supply chains and local labour markets.

Labour costs have remained high for heat pump installations due to the relatively low number of qualified installers, while inflation has impacted the cost of components.

The study found there has been 'no significant reduction in the average installed cost of heat pumps over the past decade in the UK, while modest cost reductions were seen internationally'.

The academics did however add at there were prospects for reduced installed costs in the UK, with forecasts suggesting a reduction in total installed costs by 2030 of around 20 to 25 per cent.

Anticipated savings were higher for non-equipment costs such as more efficient installations than for equipment costs.

But the researchers concluded in the study, published in the Applied Energy journal, that such reductions were 'unlikely to be on a scale and pace to match UK policy targets'.

Helen Melone, head of heat and solar of Scottish Renewables, told The Times that installation rates were 'miles away' from what politicians wanted.

She added: 'To have any chance of reaching this target the cost of heat pump installations must reduce significantly having remained stagnant over the last decade.'

Advocates of heat pumps say they offer energy security and efficiency benefits and can also lower energy bills - but homeowners who have installed the systems have complained that their monthly bills skyrocketed during the energy crisis.

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A report by innovation charity Nesta in July found one in 10 households – around three million homes – need to install heat pumps or other low carbon heating during this parliament to meet climate targets.

It also revealed that the UK installed only an estimated 250,000 heat pumps between 2020 and 2024, while 25.5million homes still use oil or gas boilers.

In April, a new 'visit a heat pump' scheme was launched to allow people to see the technology in a home near them to help families make the switch from boilers.

That came after a National Audit Office report in March warned uptake of heat pumps to replace boilers had been less than half the expected levels amid high costs and low public awareness.

It said efforts to encourage homes to install the pumps have been slow with people reluctant to spend the money – while uncertainty over the role hydrogen could play in heating homes is also hampering investment.

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Meanwhile figures revealed for Scotland yesterday found that 5,000 certified heat pumps were installed in the country this year, a 34 per cent increase on the same period last year - according to new data from the Microgeneration Certification Scheme.

Under the Scottish Home Energy Scotland (HES) Grant and Loan scheme, grants of £7,500 are available for heat pumps, rising to £9,000 for rural households.

Ross Taylor, of Aberdeenshire, who moved into a house with a heat pump four years ago, said: 'The heat pump worked great. But then the energy crisis hit and in the winter the monthly bills were over £800. Crazy money and unsustainable.

'Until there is a cheap or affordable source of electricity available then I don't believe it's worth paying to have your current system replaced with a pump.'

Another customer Iain Patience, from Inverness, said: 'We moved into our new home in September 2020 and we have a heat pump as the company that built our home got a grant to install them.

'After a year and a half we then switched it off as it was cheaper to use the gas boiler for hot water and heating the house.'

MailOnline has contacted the Department for Energy Security and Net Zero and the Scottish Government for comment.