What Is a Heat Pump and How Does It Work?

A heat pump is a low-carbon way to heat your home, and one of the most important technologies for cutting household emissions. Unlike a boiler, it doesn’t burn fuel to create heat. Instead, it moves heat from one place to another, a little like a fridge in reverse.

Even in winter, there’s usable warmth in the air, ground, or water around your home. A heat pump captures this low heat, compresses it to a higher temperature, and releases it indoors through radiators, underfloor heating, or the hot water system.

Types of heat pump:

• Air-source heat pumps (ASHPs) - Most common in the UK. They extract heat from the outside air, even at temperatures close to freezing.
• Ground-source heat pumps (GSHPs) - Draw heat from the ground using buried pipes or boreholes. They cost more to install but can be even more efficient.

For a clear comparison of air-source vs ground-source efficiency and installation needs, see the Energy Saving Trust guide.

How Efficient Are Heat Pumps?

A heat pump works differently from a boiler. It doesn’t burn fuel to create heat, it moves heat from the outside in using electricity to power the process.

Because it’s moving existing heat rather than generating it, a good heat pump can give you 2 to 4 units of heat for every 1 unit of electricity it uses.

In real UK homes, this varies depending on your insulation, heating system, and the quality of the installation. On average, you can expect 2.5 to 3.5 units of heat per unit of electricity used over the course of a year.

That’s why, even though electricity costs more than gas, a well-set-up heat pump can still save you money, especially if your home is well insulated, you have solar panels, or you’re on a flexible tariff.

What this means for bills - An Example

A typical semi-detached UK home might have an annual heating demand of around 10,000 kWh.

Gas boiler: A modern boiler is about 90% efficient, so you’d need around 11,000 kWh of gas. At today’s average price of 6.3p per kWh, that adds up to about £700 per year.

Heat pump: A good heat pump can provide 3 units of heat for every 1 unit of electricity. That means you’d use around 3,300 kWh of electricity. At 26.4p per kWh, that works out to roughly £875 per year.

In this fictitious example, the heat pump is slightly more expensive to run on a standard tariff, but that could flip if you’re on a cheaper electricity tariff or have solar panels (link to new article). If your home is well-insulated or you use underfloor heating, you might also need less energy overall.

Actual costs will depend on your tariff, home insulation, and heating system.

 * Based on Ofgem price cap, October 2025 (rounded for clarity)
Actual results depend on insulation, system design, and energy tariffs

Contrary to myths, heat pumps still work well at 0°C. Efficiency dips in extreme cold, but correct sizing, weather-compensation controls, and good insulation will keep your home toasty warm.

Costs and Financial Support

Installing a heat pump is an investment in your home, in helping tackle climate change, and in saving money in the long-term. But it does require significant planning and investment, and costs vary depending on your home’s needs.

• Air-source heat pump: £7,000-£13,000
• Ground-source heat pump: £15,000-£30,000

The Boiler Upgrade Scheme offers up to £7,500 off in England and Wales. Scotland and Northern Ireland have separate grants, and 0% VAT applies to eligible energy-saving materials until March 2027 (HMRC).

Some energy companies offer finance packages, sometimes bundled with insulation or solar panel upgrades to maximise both carbon and financial savings. Always check independent sources first, such as Energy Saving Trust or Simple Energy Advice, before accepting installer claims.

The payback period can range from 7-15 years, but lifespan is typically 15-20 years with good maintenance.

The Pros and Cons of Heat Pumps

Why heat pumps appeal:

Heat pumps are a win for the environment, using electricity that’s getting greener each year. They provide steady, year-round heating, and some models can also cool your home in summer. Running costs are generally more predictable than gas or oil, and upgrading can boost your home’s EPC rating, helping resale value. When you combine them with solar energy and a battery, the savings can be even greater (see our article – Solar Energy: Advantages and Disadvantages in 2026)

Better for the planet:

The average UK household gas boiler emits greenhouse gases equivalent to approximately 2.2 tonnes of CO2 every year.

However, a 2024 study found that heat pumps in a home setting emit almost 95% fewer carbon emissions than a traditional gas boiler annually. This is because heat pumps run on electricity, and Britain’s electricity is getting greener every year.

If someone in a semi-detached home with an older, G-rated gas boiler were to switch to an air source heat pump, they’d save approximately 2,900kg of CO2 emissions per year, according to the Energy Saving Trust – the equivalent of flying from Belfast to Nairobi and back.

The trade-offs:

Upfront costs are high, even after grants. Most homes need radiator or pipe upgrades for best efficiency. Output drops slightly in very cold snaps, so correct sizing (and sometimes a backup heat source) matters. Outdoor units need space, and the controls work differently from a boiler, so you’ll need to spend some time learning how to use it.

Replacing a Boiler with a Heat Pump

Switching from a boiler to a heat pump takes a little time to plan. A boiler swap might take a day, but a heat pump installation is tailored to your home and typically takes 2-4 days.

Here’s a checklist to think about before you start:

1. Space: Room for an outdoor unit (and ground loops/boreholes for GSHPs).

2. Heating system: Larger radiators or underfloor heating make the system more efficient.

3. Insulation: Upgrading loft, walls, and floors improves comfort and SCOP.

4. Grants: Apply before starting work.

5. Permissions: Most air-source units don’t need planning permission; ground-source systems often do - check with your local council.

6. Regulations: Installers must be MCS-certified to meet standards and qualify for government incentive schemes.

7. Tariffs: Consider a smart meter and time-of-use tariff to reduce running costs.

For an independent assessment, start with the Energy Saving Trust, Simple Energy Advice, or your local council’s energy team.

Heat Pump Safety Considerations & Risks

Heat pumps are very safe when correctly installed, but poor work can cause problems:

• Incorrect wiring or plumbing = faults and higher bills.
• Mishandled refrigerant = health hazard and reduced performance.
• Poor commissioning = underheating or high energy use.

Always use an experienced, MCS-certified installer. Avoid “too good to be true” quotes from unverified traders. In rare cases, poor installation can result in a heat pump being connected before the electricity meter, meaning the energy isn’t recorded and could be treated as electricity theft.