Heat Pump vs Gas Boiler 2026: Real-Cost Comparison on a 3-Bed Semi
After the Boiler Upgrade Scheme grant (£7,500), an air source heat pump costs £1,000–£5,000 to install. Running costs are roughly comparable to a gas boiler in a well-insulated home — but can be significantly higher in a poorly insulated one.
The Key Comparison at a Glance
| Air Source Heat Pump | Gas Condensing Boiler | |
|---|---|---|
| Install cost (before grant) | £8,000–£13,000 | £2,000–£4,500 |
| BUS grant | −£7,500 | None |
| Net install cost | £500–£5,500 | £2,000–£4,500 |
| Running cost (well insulated) | 6–8p/kWh heat | 6p/kWh heat |
| Running cost (average insulation) | 8–10p/kWh heat | 6p/kWh heat |
| Running cost (poor insulation) | 12–16p/kWh heat | 6–8p/kWh heat |
| CO₂ emissions | Low (varies with grid mix) | ~200g CO₂/kWh heat |
| Maintenance | ~£150–£250/year | ~£80–£150/year |
| Lifespan | 20–25 years | 12–15 years |
A Typical 3-Bed Semi: Annual Heating Costs
Assumptions: 3-bed semi-detached, EPC band D (average UK efficiency). Annual heat demand approximately 12,000–15,000 kWh.
| Heating System | Annual Heat Demand | Unit Rate | Annual Fuel Cost |
|---|---|---|---|
| Gas boiler (90% efficiency) | 15,000 kWh (gas input) | 6p/kWh | £900 |
| Heat pump, CoP 2.5 (poor insulation) | 6,000 kWh electricity | 24p/kWh | £1,440 |
| Heat pump, CoP 3.0 (average insulation) | 4,500 kWh electricity | 24p/kWh | £1,080 |
| Heat pump, CoP 3.5 (good insulation) | 3,860 kWh electricity | 24p/kWh | £926 |
| Heat pump, CoP 4.0 (well insulated + UFH) | 3,375 kWh electricity | 24p/kWh | £810 |
Gas at 6p/kWh, electricity at 24p/kWh (Ofgem price cap April 2026 rates, typical).
At CoP 3.0 (realistic for average UK home, radiators not upgraded), the heat pump costs approximately £180/year more to run than a gas boiler. At CoP 4.0 (well-insulated home, underfloor heating or larger radiators), it costs approximately £90/year less.
The CoP (Coefficient of Performance) Explained
CoP measures how much heat energy a heat pump produces for each unit of electricity consumed.
| CoP | Meaning | Typical scenario |
|---|---|---|
| 2.0 | 1 kWh electricity → 2 kWh heat | Cold weather, undersized heat pump, poor insulation |
| 2.5 | 1 kWh electricity → 2.5 kWh heat | Poor–average insulation, standard radiators |
| 3.0 | 1 kWh electricity → 3.0 kWh heat | Average insulation, some radiator upgrades |
| 3.5 | 1 kWh electricity → 3.5 kWh heat | Good insulation, upgraded radiators |
| 4.0 | 1 kWh electricity → 4.0 kWh heat | Well insulated, low-temperature UFH, modern home |
Heat pumps work by extracting heat from outdoor air and concentrating it. They are more efficient when:
- The temperature difference between outside air and the target flow temperature is small
- The home is well insulated (requires lower flow temperatures)
- The emitters (radiators or UFH) are sized for lower temperature output
Upfront Cost vs Lifetime Cost
Scenario: Compare a heat pump vs a gas boiler replacement on a 20-year horizon.
| Heat Pump (ASHP) | Gas Boiler | |
|---|---|---|
| Install (net of grant) | £3,500 | £3,000 |
| Annual running cost (avg UK home, CoP 3.0) | £1,080 | £900 |
| Annual maintenance | £200 | £120 |
| Replacement cost (year 12–15 for boiler) | £0 (HP lasts 20–25 yrs) | £3,000 (new boiler at year 13) |
| 20-year total | £26,100 | £30,600 |
Over 20 years, the heat pump comes out approximately £4,500 cheaper in this scenario — despite higher running costs — because:
- The upfront cost difference is small after the grant
- The heat pump doesn't need replacing mid-period
- Running costs are close (not dramatically higher)
The gap widens further if:
- Electricity prices fall relative to gas (likely as grid decarbonises)
- The home's insulation is improved
- Carbon pricing on gas increases bills
When a Heat Pump Is Worth It
A heat pump is likely to be worthwhile if:
- Your home is EPC band C or better — Good insulation means the heat pump operates at higher CoP, keeping running costs low
- You have or plan underfloor heating — UFH runs at much lower flow temperatures (30–40°C vs 60–70°C for radiators), maximising CoP
- You are in a rural area or off-grid — Homes on oil or LPG heating (much more expensive than gas) see significant savings switching to heat pumps even at lower CoP
- You plan to stay in the property 10+ years — Amortises the install cost over a long period
- You care about carbon emissions — Heat pumps on the UK grid are already significantly lower carbon than gas boilers and will improve further as renewable generation grows
A heat pump is probably not the right choice if:
- Your home is EPC E or below without planned insulation upgrades
- You plan to sell in the next few years
- You cannot tolerate higher running costs even temporarily
- Your gas supply is reliable and cheap (city centre location)
The Boiler Upgrade Scheme (BUS) — 2025/26
| Air Source Heat Pump | Ground Source Heat Pump | |
|---|---|---|
| BUS Grant | £7,500 | £7,500 |
| Availability | England and Wales | England and Wales |
| Installer requirement | MCS certified | MCS certified |
| EPC requirement | Valid EPC, under 10 years | Valid EPC, under 10 years |
| Insulation requirement | Outstanding loft/cavity recs resolved | Outstanding loft/cavity recs resolved |
The BUS grant is in the form of a reduction in upfront cost — your installer applies and you pay the net amount. Funding is allocated on a first-come, first-served basis within each year. Check the Ofgem BUS page or your installer for current availability.
Other Costs to Factor In
| Item | Likely cost | Notes |
|---|---|---|
| Hot water cylinder | £500–£1,000 | Heat pumps need a cylinder; many homes with combi boilers don't have one |
| Radiator upgrades | £150–£400 per radiator | May need upsizing to work at lower flow temps |
| Electrical upgrade | £500–£1,500 | Some homes need consumer unit upgrade or new circuit |
| Insulation (top-up) | £500–£4,000 | Often needed to maximise CoP and may be required for BUS eligibility |
Total installed cost including ancillary works can be £10,000–£20,000 before grant in some cases. Subtract £7,500 grant and the net outlay could be £2,500–£12,500 depending on property.
Energy Bill Calculator
Estimate your annual energy bill for gas and electricity based on usage.
Open Energy Bill calculatorFrequently asked questions
Related reading
Second Homes in Anglesey and Snowdonia: Council Tax Premiums Explained 2026/27
Why Anglesey and Eryri/Snowdonia councils charge some of the highest second-home Council Tax premiums in Wales, and how the premium interacts with holiday-let business rates in 2026/27.
Property Guardian Schemes: Council Tax and Tenancy Rights in 2026/27
Property guardians live in empty commercial or residential buildings at low cost, but their legal status is often a licence, not a tenancy. How Council Tax liability and rights actually work in 2026/27.
Wales Second-Home Council Tax Premium: Which Towns Charge the Most in 2026/27
Welsh councils can charge up to 300% Council Tax premium on second homes. How the premium is set, which areas apply it hardest, and how to check before you buy in 2026/27.