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Are heat pumps cost effective?

In this second blog about heat pumps, I aim to provide a clearer understanding of how these installations work. Clear information is not always easy to find and there are many myths concerning their performance (mostly negative). Some people do seem to prefer discussing the negative rather than celebrating the positive!


The questions most people ask when considering a heat pump are “How much will it cost to install?”, “How much will it cost to run?” and “Will I be warm enough?”. This blog addresses the question of running costs. The answer depends on some key factors:

  1. The cost of electricity compared with the cost of the current heating fuel.

  2. How much heat does a heat pump produce for the energy it uses? This is its Seasonal Coefficient of Performance (SCoP), which I explained in the previous blog post.

  3. How does the heating system deliver the heat to the rooms in the property?


The unit of energy I talk about is kilowatt hours (kWh) as this is how we are billed by the electricity companies and how heat pumps use electricity to work.


Heat loss

To heat a property in a year, it requires an amount of energy to be inputted. We need to input heat because properties lose heat through all surfaces.


The diagram details where a typical property loses heat from:

·        35% - walls

·        25% - roof

·        15% - floor

·        15% - doors

·        10% - windows

We’ll look at insulation in a future blog post.


Cost of electricity compared with other fuels (the relative cost by kWh of different fuel types and heating methods)

The following table details the cost per kWh of the main types of fuel used in the UK. The majority of the data was taken from the Nottingham Energy Partnership website.

I've highlighted air conditioning, ground source heat pumps and air source heat pumps in green.


Considering the key points that affect the cost of running a heat pump

There are some key takeaways from the above table. At first glance, it appears that ground and air source heat pumps are more expensive to operate than some other fuels but not others. With the assumptions made to construct this chart, that is correct. You might now be saying “I knew it!”, but that’s not the whole story. Fuel prices vary relative to each other over time, so what is more expensive today may well change in the future and, with the drive to decarbonise, I’m sure fossil fuels will become more expensive compared with electricity.


Heat pump efficiency

What is more important is that we can affect the efficiency of the system. There are two key factors that affect efficiency and thus the cost of operating a heat pump.

  1. How much heat does a heat pump produce for energy it uses – its SCoP?

  2. How does the heating system deliver the heat to the rooms in the property?


The SCoP gives an indication of how much heat is delivered for each unit of energy that goes in. A heat pump with a SCoP of 2.94 delivers 2.94kWh of heat out for each 1kWh in. A heat pump with a SCoP of 3.5 delivers 3.5kWh of heat out for each 1kWh in. A key consideration is that we can change the SCoP of the heat pump by varying the output (flow) temperature of the unit. The following details the SCoP for two models: a Samsung

Remember: the higher the SCoP, the less it will cost to run the heat pump. The flow temperature of the heat pump can be reduced by careful design of the wet system that delivers the heat to the rooms.

Underfloor heating can use flow temperatures of 35°C and, in theory, radiators can use similar temperatures but the amount they will need to be oversized can make this impractical. The degree of oversizing can be reduced by improving the insulation of the house and of specific rooms.


Improving the insulation in the house or in specific rooms reduces heat loss. By reducing the heat loss, the heat needed to maintain the temperature is reduced. Therefore a combination of reduced flow temperature and reduced radiator sizing can be achieved – a double win. Reduced flow temperatures improve heat pump efficiency and so reduce running costs. The reduced heat loss reduces the heat demand, reducing running costs. The effect of improving various elements of the insulation within a property is something we'll look at in a future blog post.


The following table now includes the Samsung air source heat pump with a flow temperature of 50°C giving a SCoP of 3.88.

Suddenly the air source heat pump is near the top. What is key is that the design of the system has a very significant effect on operating costs.

One more point to highlight from the table is that air conditioning is second to top. It’s not commonly understood that modern air conditioning units provide space heating as well as space cooling and that, generally, they have a SCoP that exceeds air-to-water air source heat pumps.


Carbon impact

The last point is the carbon impact of the various fuels. The following table uses the Samsung SCoP but all other values are unchanged. It is filtered to show the fuel/heat method with the lowest carbon impact.


In summary

When someone states that a heat pump will save you money, you need to ask whether they have carried out a full design otherwise how do they really know? And when someone states that the system is costing a fortune to run, then consideration should be given to whether the system was designed and installed correctly and whether an unrealistic expectation was given.

A correctly designed and installed system will provide a cost-effective means to heat a property but it may require the existing wet system to be modified to gain full benefit. This is where the government will need to take some action in my opinion. The recent increase in the Boiler Upgrade Scheme (BUS) to £7,500 for an air source heat pump does provide a meaningful contribution to the installation of the heat pump but it does not cover the costs of modifying the wet system and improving the insulation.

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