Heat Pump Cost UK 2026: Real Prices, Grants and What You'll Actually Pay

Heat pumps aren't cheap — but neither are gas boilers when you stop and add up the headline price, the controls, the radiator changes a Boiler Plus install often quietly skips, and the 20% VAT no one mentions. Here's what a heat pump genuinely costs in 2026, what the grant knocks off, and where the price ranges actually come from.

The reference point: DESNZ statistics for the latest published quarter (Oct–Dec 2025) put the average BUS-claimed installation at £13,431 for an 8.4 kW air source heat pump. That includes the unit, hot water cylinder, pipework changes, electrical work, commissioning and MCS sign-off. After the £7,500 grant, the average homeowner paid around £5,930 out of pocket.

Costs by heat pump type

These are fully installed prices including the unit, labour, hot water cylinder (where applicable), commissioning and MCS certification. VAT is zero-rated on heat pump installations until 31 March 2027, so these figures already reflect that.

Costs by property size

The size of your home (and how leaky it is) drives the output capacity you need, which is the biggest single factor in price. A well-insulated 3-bed semi might need a 5–7 kW pump; a solid-wall 4-bed detached can easily need 12–14 kW with significant radiator upgrades.

What's actually included in a heat pump quote

An MCS-compliant heat pump quote should cover:

• The heat pump unit and outdoor base / wall brackets
• A heat-pump-spec hot water cylinder (typically 180–300 litres)
• Pipework and connections from the heat pump to the heating circuit
• Necessary radiator upgrades to suit lower flow temperatures
• Electrical supply, isolation, and DNO notification
• Controls — weather compensation and any zoning
• Commissioning, MCS certificate and building control sign-off
• Handover and operating instructions

What's often not included and can add to the cost: underfloor heating, additional insulation work, asbestos removal in older properties, consumer-unit upgrades if your existing board can't accommodate the new circuit, or a separate planning application if your install doesn't fall under permitted development.

The £7,500 BUS grant

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Boiler Upgrade Scheme

Up to £7,500

Deducted directly from your installer's quote. £9,000 rate announced for oil and LPG homes from July 2026.

The Boiler Upgrade Scheme (BUS) gives £7,500 off air-to-water, ground source and water source heat pumps, £2,500 off air-to-air systems (added 28 April 2026), and £5,000 off biomass boilers in eligible off-grid rural properties. Your MCS-certified installer handles the application — the grant is deducted at the point of sale, not claimed back later.

Hybrid systems (a heat pump paired with a new gas/oil/LPG boiler) are not eligible for BUS. The grant is for full replacement of the fossil-fuel system, not supplementation.

Running costs: the honest comparison

A well-installed air source heat pump in a reasonably insulated UK home typically delivers a Seasonal Performance Factor (SPF) of around 3.0–3.8 in real-world conditions — meaning for every kWh of electricity it draws, it delivers 3.0–3.8 kWh of heat. DESNZ's Electrification of Heat demonstration project found a roughly 1.0-point gap between declared SCOP on datasheets and in-situ SPF, which is the most important number nobody on a sales call will tell you.

For a typical 3-bed semi needing around 10,000 kWh of heat per year, at the April–June 2026 Ofgem price cap (24.67 p/kWh electricity):

• Heat pump at SPF 3.5, standard tariff: ~£705/year
• Heat pump at SPF 3.5, heat pump tariff (Octopus Cosy, EDF Heat Pump Tracker, British Gas Heat Power): ~£450–£560/year with load shifting
• Modern A-rated gas boiler (90% efficient, 5.74 p/kWh): ~£640/year
• Oil boiler (85% efficient, ~9.7 p/kWh thermal): ~£1,140/year
• LPG boiler: ~£1,200–£1,400/year
• Direct electric heating: ~£2,470/year

On a standard tariff, a properly installed heat pump costs roughly the same to run as a modern gas boiler. On a dedicated heat pump tariff with smart scheduling, it's typically £150–£300/year cheaper than gas. Against oil and LPG, the running-cost case is decisive — and that's before factoring in the £9,000 BUS uplift for oil/LPG homes from July 2026.

Is a heat pump worth it?

For most UK homes replacing a gas boiler, a heat pump is a long-term investment that starts to pay off once you factor in the grant, the 0% VAT, the longer lifespan (20–25 years for the unit, 50+ years for ground loops), and rising gas costs over the next decade. If you're replacing an oil or LPG boiler, the economics are stronger today and become decisive once the £9,000 BUS uplift goes live in July 2026.

Where it makes less financial sense right now: if you have a relatively new, efficient gas boiler, excellent insulation, and no immediate need to replace. In that case, getting insulation and controls right first (loft, cavities, smart thermostat, weather compensation on the boiler) is the higher-value move, and you can reassess in 3–5 years when your boiler is closer to end-of-life.