[These numbers are correct as of August 2016 but they are likely to change – check current rates here.]
Heat pumps create hot water by absorbing heat from the ground or air, into a fluid. This gets compressed, raising the temperature, before being fed into a heat exchanger which transfers the heat into water and is pumped around your heating system. It’s an efficient form of heating because the conversion rate of electricity into useful heat is higher than with radiators. You therefore get more out for what you pay in, saving you money on your energy bills!
Ground source heat pumps will not be suitable for every property because the installation process involves drilling large bore holes – either vertically or horizontally – for pipework. Although they’re cheaper to install and take up less space, air source heat pumps are also less efficient than ground source heat pumps.
The more insulated and efficient your home, the better heat pumps will work, as they cannot reach quite the same temperatures as other hot water systems. It’s worth pointing out, however, that they are not more efficient than gas central heating systems.
Renewable Heat Incentive
The RHI is a government financial incentive to promote the use of renewable heat, therefore helping the UK cut carbon emissions and meet targets.
We are often asked if RHI payments can meet the cost of installing a ground source heat pump. We can’t give a definite answer on this, because the cost of systems – and the rates paid by the scheme- vary greatly depending on your home and change from year to year.
Ground source heat pump costs
The Energy Saving Trust estimates the cost of installing a ground source heat pump at between £13,000-20,000.
We used the online RHI calculator to work out estimated payments for installing ground source heat pumps in two example properties. Below, we run through two examples to show how greatly these payments can differ depending on the type of your home:
Example property number 1
- In England/Wales
- Mid-terrace
- Built pre-1900
- 3 bedrooms
- Uninsulated solid brick walls
- Thick loft insulation
- Post-2005 LPG/gas boiler
According to this example, RHI payments would total £12,600. It’s worth noting, however, that this is just an estimate! Clearly, the figure given falls short of the amount of installation – possibly by quite a bit. It’s also not a one-off payment: it is now only paid out over the course of 7 years, in quarterly instalments. This relies on you having the initial capital to invest, as you will be paid back over such a long time. You will be shouldering the cost for years….
Example property number 2
- In England/Wales
- Semi-detached
- Built since 2007
- 3 bedrooms
- Insulated cavity walls
- Thick loft insulation
- Post-2005 LPG/gas boiler
According to this example, RHI payments would only total £7,000 over 7 years. This is potentially less than half the cost of installation, so the homeowner would shoulder most of the cost. This shows just how much payments vary depending on the property; this is why we can’t give a catch-all answer as to whether or not it’s worth doing.
Air source heat pump costs
The Energy Saving Trust estimates the cost of an air source heat pump at between £7-11,000.
Example property number 1 (same as before)
The calculator estimates RHI payments totalling £4,690 over 7 years.
Example property number 2 (same as before)
The calculator estimates RHI payments totalling £2,250 over 7 years.
Clearly, both of these leave a significant shortfall.
So the quick answer is that in general, RHI payments won’t pay fully for you to install a heat pump (although there are exceptions!). It may not be affordable for everyone, but if you have the initial capital to spend and you want to go ahead anyway, RHI payments will soften the blow over time.
You can contact Ofgem for more information on 0300 003 0744.
Installing heat pumps
Are you thinking about getting a heat pump? We have scoured the country for the best tradespeople, so that we can make sure we only recommend those we really trust.
If you would like us to find you a local heat pump installer, just fill in the form below and we will be in touch shortly!
Sorry to report that the following two paragraphs are completely incorrect. I suggest you submit them to an appropriate engineer who will correct the host of technical errors for you:
Heat pumps create hot water by absorbing heat from the ground or air, into a fluid. This gets compressed, raising the temperature, before being fed into a heat exchanger which transfers the heat into water and is pumped around your heating system. It’s an efficient form of heating because the conversion rate of electricity into useful heat is higher than with radiators. You therefore get more out for what you pay in, saving you money on your energy bills!
Ground source heat pumps will not be suitable for every property because the installation process involves drilling large bore holes – either vertically or horizontally – for pipework. Although they’re cheaper to install and take up less space, air source heat pumps are also less efficient than ground source heat pumps..