Air source heat pump costs, the Boiler Upgrade Scheme grant, running costs versus a gas boiler, and whether a heat pump suits your home.
The Boiler Upgrade Scheme currently offers £7,500 for qualifying air-to-water and ground/water-source heat pumps. The scheme is open to homeowners in England and Wales. Subject to eligibility, installer MCS certification, and scheme availability at time of application.
Updated August 2026: The Boiler Upgrade Scheme was updated on 21 July 2026. Air-to-air heat pumps now qualify for a £2,500 grant. Off-gas-grid air-to-water and ground-source installations may qualify for £9,000 (until 31 March 2027). Air-to-water and ground/water-source heat pumps remain eligible for £7,500. Source: Ofgem/GOV.UK. Check current eligibility before applying.
Before and after the Boiler Upgrade Scheme grant
| Type | Installed cost (before grant) | After £7,500 BUS grant | Running cost vs gas |
|---|---|---|---|
| Air source heat pump (ASHP) | £9,000 – £15,000 | £1,500 – £7,500 | Can be lower in well-insulated homes |
| Ground source heat pump (GSHP) | £18,000 – £35,000 | £10,500 – £27,500 | More efficient, higher upfront cost |
| Air-to-air heat pump | £2,000 – £8,000 | £2,500 BUS grant | Heating & cooling only, no hot water |
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Costs are indicative for August 2026. BUS grant subject to eligibility and ongoing availability. Running costs compared to gas boiler vary significantly based on property insulation, tariff, and usage patterns.
Heat pumps work best in well-insulated homes, as they produce lower flow temperatures than gas boilers. The combination of good insulation and a heat pump can deliver very efficient whole-home heating with lower running costs.
Important: Improving your home’s insulation first — particularly loft and wall insulation — will significantly improve the performance and running costs of a heat pump. We often recommend insulation improvements as a first step before a heat pump assessment.
The Boiler Upgrade Scheme (BUS) currently offers a £7,500 grant for qualifying air source and ground source heat pump installations in England and Wales. The installer must be MCS certified and the property must be no EPC requirement (rule removed 28 April 2026). Scheme availability and terms may change — check GOV.UK for current details.
Modern air source heat pumps are designed to work effectively in UK winter temperatures, typically operating efficiently down to -15°C or below. Efficiency (COP) reduces at very low temperatures but the system continues to provide heat. Ground source heat pumps are less affected by air temperature as they draw heat from the relatively stable ground temperature.
Well-maintained air source heat pumps typically last 15 to 20 years or more. Ground source systems may last 20 to 25 years. This compares favourably with a gas boiler lifespan of around 10 to 15 years. Annual servicing is recommended.
Cost data: Energy Saving Trust benchmarks (August 2026) and UK installer quotes. Grants: GOV.UK and official scheme operators. Savings: Ofgem Q3 2026 price cap £1,862/year. All figures indicative. Last reviewed: August 2026. View scoring methodology →