What are heat pumps and are they worth installing?

If you’re considering a long term solution to lower energy bills, then a heat pump could be well worth considering.

Already hugely popular (and effective) in colder climates in other parts of the world including Norway, Finland and Sweden, there is growing demand in the UK for this technology as it becomes more accessible than ever before.

But how do heat pumps actually work and is the investment worthwhile? This is what you need to know.

What are heat pumps and how do they work?

Heat pumps are highly efficient technology that transfer heat from the outside air (or the ground), intensify it, and use it to warm and provide hot water for buildings.

As a heat pump draws warmth from the air (or ground) and moves it into your home, rather than creating the heat itself, it’s a much more efficient option than a traditional gas boiler.

There are different types of heat pump available, including air source and ground source, with air source models being the most popular, due to their less disruptive installation method.

In terms of energy efficiency, air source heat pumps can produce up to three times more energy than they consume, which means for every unit of electricity it takes to run, you get three units of heat from it. This ratio is called the Coefficient of Performance (or CoP), and if a heat pump produces three units of heat for every unit of electricity it consumes, that would give the heat pump a COP of 3. The higher the CoP, the more efficient the heat pump is.

Many heat pumps can be controlled via a smart app, which means you can control it from anywhere, and set up schedules so you get heat when you want and avoid wasting money by heating your home unnecessarily.

In terms of the temperatures you can expect, air source heat pumps can heat your water up to 60-70°C, more than enough for your radiators and hot water.

What’s the difference between ground source and air source heat pumps?

The difference between ground source and air source heat pumps comes down to where they extract the heat from.

Ground source heat pumps extract heat via pipes that are buried in the ground outside your house, while air source heat pumps, as the name suggests, extracts warmth from the air. Ground source heat pumps tend to be the most energy efficient because the ground temperature tends to be more stable than the air temperature over the course of the year. However, they can be costly and complex to install. They are best suited to new builds (or complete rebuilds) as opposed to being retrofitted in existing homes due to the significant disruption and required land for the underground pipework.

Air source heat pumps, on the other hand, are much more affordable, easier to install, and while they might not yet be as super-efficient as ground source heat pumps, they are still much more energy efficient than an old gas or LPG heating system.

How much does an air source heat pump cost?

Typically an air source heat pump installation can cost around £12,000, but the price can vary depending on the size of your home and type of heat pump you choose.

However, the £7,500 Boiler Upgrade Scheme (BUS) grant can significantly reduce the price you pay. Once the grant is applied, the final cost for a three-bedroom house, including the heat pump, hot water tank, and radiators, is typically around £5,000. Choose an air source heat pump through E.ON Next and they will handle the grant application for you to ensure a hassle-free quote and installation process.

Once you’ve looked at the upfront costs, it’s important to also factor in the ongoing running costs. According to E.ON Next, an air source heat pump typically costs between £450 and £1,200 a year*, depending on the size of your home and your heating habits.

Compared to an old G-rated gas boiler, this could be a saving of £260 per year, or in the case of an old G-rated LPG boiler, a saving of £700 per year is possible.**

What should you consider before installing a heat pump?

As with any home upgrade, you will need to be sure you’re making the right choice for your home, so there are a few considerations you should make before you part with your cash.

• Your home’s suitability. Heat pumps work most efficiently in well-insulated homes so you may need to address any failing insulation before you go ahead. You will also need to have sufficient outdoor space for the heat pump to be installed. A professional assessment will be required to determine the right type and size of heat pump, as well as where it’s best installed.
• Your budget. There are upfront costs of having a heat pump installed, but it’s worth balancing this against the long-term potential savings you can make by using more energy efficient technology. E.ON Next's 0% financing can make it more affordable and comparable with the monthly costs of a new boiler. You may also qualify for a government grant to help you cover the cost.
• Other energy saving measures. Combining a heat pump with other renewable technologies like solar panels with battery storage is a way to level up your home’s energy efficiency. It means you use the energy you're directly generating to heat your home rather than buying it from the grid.

Is a heat pump a smart investment for UK homes?

If you are looking for long-term savings on your energy bills, then upgrading your home with technology like a heat pump is definitely a good idea.

Whether a ground or air source heat pump is the best option will depend on your home and budget, but air source heat pumps tend to be the most straightforward and affordable to install.

To get started on your air source heat pump journey, use E.ON Next, they’ll be with you every step of the way from a tailored home assessment to the fully-managed installation process and beyond. A trusted brand, they have a dedicated heat pump support team, clear pricing structure and flexible finance options, which will be reassuring to those embracing this energy efficient technology for the first time and, making the switch from your gas boiler to a heat pump simple and supported.

* Figures according to E.ON Next.

** Potential annual savings are based on the installing of a standard air source heat pump in an average sized three-bedroom, semi-detached home. Running costs will depend on the size of your home and any upgrades to your heating system. Any saving will also depend on the fuel type being replaced and the age of your current heating system. Figures are sourced from the Energy Saving Trust website, based on fuel prices as of July 2025.