Pump Up the Savings?: Will spending on heat pumps really help you save?

Could heat pumps be the answer to rising energy bills?

As we learn more and more about the potentially devastating effects of climate change, coupled with the need to drive down ever-increasing energy bills, governments and individuals are looking for cheaper and greener ways to heat homes.

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Often, greener solutions have a positive impact on a household’s bottom line. Good insulation, for example, helps a home retain heat, so that less energy is needed. Solar panels are a green source of energy, and can even make you money, as any energy you produce and don’t use is sent on to the National Grid. But solar panels are a huge investment that not many people can afford in a time of spiralling costs.

What are heat pumps?

Not so long ago, the news was full of heat pumps – but why?

In a bid to replace gas and oil powered heating, to both meet the government’s net zero targets and save households money, heat pumps could be the answer. They collect heat from one source and concentrate it for use inside your home. There are three main kinds of heat pumps:

  • Air-to-air
  • Water source
  • Geothermal

The government hopes to see 600,000 heat pumps installed every year until 2028, but they are a lot more expensive than traditional gas boilers. Heat pump installation can cost between £5,000 to £15,000. In the current financial crisis, a boiler, averaging about £1,500 – £2,000 is a more affordable alternative.  

The government is offering grants via the £450 million Boiler Upgrade Scheme, which offers £5,000 for homeowners looking to replace fossil fuel boilers with low-carbon heat pumps. The idea is that you ‘spend to save’, as the large upfront costs will save you money in the long run with bills.

But are heat pumps all they’re cracked up to be?

What are the pros and cons of heat pumps?

Pros

Cons

Government grant available to ease the cost of installation

Installation is expensive, particularly in older properties. The government grant doesn’t cover the whole cost

More energy efficient, producing up to 3x more heat than the electricity they use to do so

Take longer to heat rooms in colder months

Greener option than gas or oil heating

Better suited to new builds than retrofitting older properties

No carbon monoxide concerns

Can be quite noisy

Saving money in the long-term is a big pro, but doesn’t make it any easier in the short term to afford one! While the government grant of £5,000 is a boost, it’s not a great help if you have an older property that is more expensive to install a heat pump in. You could be left covering the rest of a bill up to £15,000.

While heat pumps have their supporters, there are also plenty of detractors who feel the push for heat pumps hasn’t been thoroughly thought out by the government. Not least because they are actually less efficient in the cold weather. As heat pumps draw heat from the air, water or ground to pump into homes, it makes sense that they have to work harder in the colder months to find that heat. However, hearing that a heater is less efficient in the temperatures it’s most needed is not ideal!

Despite some of the above cons, the European countries with the most heat pumps per person are among the coolest places on Earth:

  • Norway. Average winter temperature is around -6.8°C
  • Sweden. Winter temperature can get down to -2°C
  • Finland. Lapland can get down to temperatures of -45°C, with the lowest temperature in Helsinki hitting -34.3°C in 1987
  • Estonia. Can get down to -8°C or even as low as -23°C

However, there hasn’t been the rush to install in the UK that the government may have hoped for. At the moment, it looks like the price is prohibitive. At a time when many are struggling to make their mortgage or rent payments, heat pumps are not a high priority. 

Should landlords invest in heat pumps?

It’s always worth looking into new things, to see if it might benefit you or your tenants. With the drive towards greener living, traditional gas heating is likely to fall out of fashion in the future (who knows, maybe one day you won’t need that Gas Safety Certificate!).

There may come a time when heat pumps are the next big thing that tenants are looking out for, in which case, it will be to your advantage to have one already installed, just like charging points for electric cars

While there are government grants available, it’s worth checking out how much it might cost to install one and what the potential disruption to your tenant might be. You can then use our free Expense Tracker to see if you have the space in your budget to afford to cover any costs beyond what the grant covers. 

With EPC ratings set to go up in 2025, a heat pump could be the investment that pushes you up the ratings so it could be worth taking advantage of the grant now and updating your EPC sooner, rather than later.

If the government hopes to meet its targets, it may have to go back to the drawing board to understand just what is putting the public off from investing and how they can make heat pumps the next big thing.

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