The National Audit Office revealed that high installation costs and limited public awareness hinder the uptake of heat pumps as gas boiler alternatives in UK households. Efforts by companies and the government aim to address these challenges through financial incentives and cost reduction strategies, despite market constraints cited by industry experts.
The National Audit Office revealed in March that the cost of heat pumps and a lack of public understanding are significant barriers for households considering these devices as gas boiler replacements. The installation cost of a heat pump in the UK ranges from £8,000 to £30,000, with air source heat pumps costing around £12,000 on average.
Some companies, like Octopus Energy, British Gas, and Ovo, have sought to make heat pumps more accessible through offers that significantly reduce the up-front costs, taking advantage of the Government’s Boiler Upgrade Scheme. Nevertheless, experts like Mike Foster from the Energy and Utilities Alliance and Bean Beanland from the Heat Pump Federation suggest that prices might not decrease much further. They cite the maturity of the heat pump market and global trade dynamics as limiting factors.
Additionally, the initial high cost is partly due to one-off fees for project management, system design, and compliance checks. Once a heat pump is fitted, energy bills are expected to fall, and subsequent replacements are less costly as initial infrastructural updates would already have been made.
Looking to encourage broader adoption, the Government aims to reduce heat pump installation costs by up to 50% by 2025. In parallel, companies like Octopus Energy are offering financing options, such as “buy now pay later” schemes, to further ease the financial burden for households. These new financial arrangements include regulated products to ensure affordability and prevent excessive debt.
