True Net Installation Costs After Grant (Worked Examples)
The gross cost of an air source heat pump includes the outdoor monobloc or split unit, an unvented hot water cylinder, system flushing, heat loss calculations, and electrical upgrades.
Applying the statutory £7,500 grant reduces the capital outlay substantially across standard UK housing archetypes:
| Property Archetype | Gross System Cost | BUS Government Grant | Net Cost to Homeowner | Typical Radiator Upgrades |
|---|---|---|---|---|
| 2-Bed Mid-Terrace / Semi (80m²) | £9,500 - £11,000 | £7,500 | £2,000 - £3,500 | 0 to 2 radiators resized |
| 3-Bed Semi-Detached (110m²) | £11,500 - £13,500 | £7,500 | £4,000 - £6,000 | 2 to 4 radiators upgraded to Type 22 |
| 4-Bed Detached (160m²) | £13,500 - £16,500 | £7,500 | £6,000 - £9,000 | 4 to 6 radiators resized or underfloor |
| Large Period Farmhouse / Solid Wall | £16,000 - £22,000 | £7,500 | £8,500 - £14,500 | High-temperature heat pump / full re-pipe |
Operating Economics: Heat Pump vs Mains Gas Boiler
The running cost of a heat pump is governed by the 'spark gap'—the ratio between unit electricity prices and unit gas prices.
Under the statutory Default Tariff Cap set by Ofgem, electricity costs approximately 24.5p/kWh and gas costs 6.24p/kWh (a price ratio of roughly 3.9:1).
• If a heat pump achieves a Seasonal Coefficient of Performance (SCOP) of 3.0, it generates 3 units of heat per 1 unit of electricity, resulting in an effective heating cost of 8.16p/kWh (slightly higher than a 90% condensing gas boiler at 6.93p/kWh).
• If the heat pump is designed with low flow temperatures (35°C–45°C) achieving a SCOP of 3.6 to 4.0, running costs match or beat gas boilers.
• Dynamic Smart Tariffs (e.g., Octopus Agile or Heat pump special tariffs offering 13p–15p/kWh during overnight and afternoon periods) cut annual heating bills by 30% to 50% compared to traditional gas heating.
Distribution Network Operator (DNO) Approvals: G98 vs G99
Because heat pumps draw significant electrical current during compressor startup, installers must comply with Energy Networks Association (ENA) regulations:
• EREC G98 (Connect and Notify): For smaller heat pumps drawing under 16A per phase with low network disturbance, the installer simply notifies the DNO within 28 days of installation.
• EREC G99 (Apply to Connect): For larger heat pumps (above 16A per phase) or properties with existing EV chargers and solar inverters, the installer must apply for prior approval before turning the unit on. If the local substation or main service fuse is rated at 60A, the DNO may require a free fuse upgrade to 80A or 100A.
Scottish & Welsh Regional Differences
Home heating grant frameworks vary across UK devolved administrations:
• England & Wales: Governed by the Boiler Upgrade Scheme (£7,500 non-repayable grant).
• Scotland: Administered by Home Energy Scotland (HES). Scottish homeowners can claim a grant of up to £7,500 (or £9,000 in rural island communities) plus an optional interest-free loan of up to £7,500 to fund the remaining capital balance.
• Northern Ireland: Operates under separate Department for the Economy energy transition pilot schemes.