One year with an Air-Source Heat Pump: Real-world costs and experience

I can't quite believe it but it's been a full year since we had our Ecodan air source heat pump installed (read that for more details on installation costs and the exact work we had done). Well, I said I'd post back here with some thoughts on exactly what it's been like, plus some costings - so here I am.

TLDR: The heat pump was an excellent decision for our household. It has worked out better on every level than gas, including cost. I've been genuinely amazed and extremely pleased we made the decision.

Winter performance

There has been no downside over a gas boiler for heating in winter. Knowing that heat-pumps run at lower temperatures and that our radiators will run less hot was a small concern initially, but ultimately it simply hasn't been a problem. Once you are used to the way the system works, the differences become the new normal. The house has been warm and cosy, usually around 21ºC, throughout winter. Temperatures in different rooms of our house do vary - the loft is extremely snug thanks to it being a recent conversion, and other rooms vary by a few degrees. There is always a good level of comfort throughout the house. The radiators do run at lower temperatures, but when fiddling with the system initially, I was amazed that it was possible to get them really rather hot. However, it's not efficient or necessary to run the system very hot though, and over time tweaked things to be just about right. The heating during winter was programmed to come on very early in the morning and then once again during the evening, every day for most of the winter. On colder days the system would come on for longer, just as you'd expect it to.

Hot water

Every day there is a tank of hot water ready to use throughout the day. We have one or two showers a day and a bath for the kids, usually - plus washing up. There have been two occasions in the past year where our 180-litre hot water tank has not lasted for the day, I think due to extra baths on those days. So there has been no real issue with shifting to a hot water tank. It takes perhaps 20 seconds longer for hot water to come out of the taps in the bathroom, but that has been the only discernable difference and is certainly not a problem for us.

Noise

The unit is very quiet and makes less noise than a gas boiler (which most people probably wouldn't consider particularly noisy). Our heat pump is literally right next to our back door and we can't hear it.

Cost

The heat pump came with its own meter so I can see how much it's used. I've not got a smart meter, however, so tracking usage has been down to me logging usage daily. I didn't manage to do this chore every day but I have got enough data to work out monthly averages for the year. This is more than enough information to see overall costs and compare to gas.

Monthly usage

You can see that the usage goes up significantly over the wintertime and drops again for the summer. This summer appears to be lower than last summer, which is to be expected now we're a bit more used to the system and it's running, hopefully, more optimally.

Cost comparison to gas day-to-day

To work out exactly what we're paying compared to gas, I've used the last available full-years gas bill, which for us is the 2018/2019 year. Our annual usage then was 8,210 kWh (the UK average is 12,000 kWh) and at a unit rate of 3.79p/kWh we spent £347 during the year; an average of 97p per day.

The heat pump, on the other hand, has used through 2,585 kWh of electricity, which at a unit price of 14.11p/kWh, has cost us £364 for the year; an average of £0.99p per day. At just 2p a day more, it's practically the same to run day-to-day. The difference will of course change during the year with fluctuations in gas and electricity prices.

So, what about the long term cost?

Cost comparison to gas over seven years

To work out exactly what we're paying compared to gas, I've added up the installation cost of the heat pump, the estimated running cost of the heat pump over 7 years, at today's electricity prices and deducted the estimated Renewable Heat Incentive payments over 7 years. Then compare that to the installation cost we were quoted in 2019 for a gas combi-boiler and estimated running costs of the boiler, based on our 2018/2019 usage and 2019 prices.

Obviously all the prices are subject to change, but equally the RHI payments go up month to month with inflation, so the real numbers may lean in the heat pumps favour slightly. It's the best comparison right now. Are you ready?

Well, I couldn't quite believe it either. The gas boiler goes ka-put and given the choice of a nice'n'easy combi boiler replacement for £2,400 or a completely-unknown brave new world of an air-source heat pump at £8,500... The heat pump is projected to cost us £4,800 less over the 7-year term of the RHI payments. Indeed, the total cost of the system is £30.76 after incentives. And when the RHI payments stop? It's going to cost us no more than gas to run.

Now obviously, this isn't going to be the same for everyone, different sized houses with different EPCs and different family sizes mean these numbers will vary. But its a great start and I suspect that for many other homes, it will also make sense. We were prepared to pay slightly more for our system because, at least in my eyes, middle-class mid-to-high income households should take on some of the burdens of the climate transition first. But in fact, financially it's been a very sound decision as well.

It's worth mentioning that as a family of 5 we don't expect to be in this house for another six years, as we expect to outgrow it. So it's extra reassuring to know that we could move house in 4 years and have the system paid off from just the RHI payments. And the next owners of the house will still be able to claim the tail end of those payments, and use the system with no extra cost over gas.

At 0.185 kg / kWh for gas, on our renewable electricity supply, we've saved over 1,480 kg of CO₂ in our first year. We could probably make further carbon savings if we had Solar, because of the water tank we could effectively use it as a battery and heat the water during the daytime with sunshine. We're a little short on space for solar, and the cost savings would be minimal - but this would be another benefit for those households that already have solar.

Removing the gas meter

I have received mixed messages on this. Initially I was told that the meter removal would be a hundred pounds or so, and then I'd have to pay for removal of the gas to the property at around £1000 to the network operator, which seemed crazy. But it's also annoying having to pay the currently 20p a day standing charge (~£71 a year) for a meter in the house and nothing connected to it.

I recently tried phoning up a meter removal company who advised I could get the meter removed through my energy company and that I wouldn't have to pay the network operator to remove the pipework to the house.

So, I phoned up my energy provider, Bulb, and arranged for the meter to be removed. They initially said that I had to phone the network operator to have the pipework to the house removed, but later backtracked on this and said that did not have to happen on the same day. The meter was removed and the pipe capped, just this week and the engineer said that "at some point, they may work on removing the pipework to the property, as it'll come up on the system, and if they do that they might want to look in your house". No mention of cost for me.

This bit was the most disorganised/unclear part of it all - but having the meter removed felt great.

In summary

So there you go. We love our heat pump. Almost all of the time it just sits there doing nothing and we have hot water whenever we need it and heating throughout winter. It's cheaper, cleaner, quieter, easier to maintain; plus we have a new kitchen cupboard where the boiler was, extra space in our cupboard where the meter was and I've been able to remove redundant gas pipework from various parts of the kitchen. It was installed with no changes to our radiator system too!

With the Government's Green Homes Grant set to launch later this year, and energy companies like Good Energy announcing a heat pump tariff, both the installation and the running costs of heat pumps are set to reduce further, making them more accessible for more people. The future is clean and we have the technology. It was a bit scary at first to make the jump to a heat pump but looking back, I can't think of a single bad thing about our decision.

Update: October 2021

Due to recent government announcements, it's great to see that my blog posts on our heat pump have received quite a bit of attention, and pleasing to hear from those of you who have found them useful. I feel I should do a quick update to reflect what's changed since I published this post.

We moved out of our house in Spring 2021! We had basically outgrown it, and after last years lockdowns we were feeling the walls close in a bit - we really needed more space. We were able to market our home as eco-friendly and gas-free. Plus, as the RHI payments were to carry over for any new owners - it was an attractive prospect for buyers. We got a good sale price for our home, and although it's never easy to quantify these things in such a simmering market, our agent certainly thought our eco-conscious changes to the house had added value. So we're not feeling put out by exiting the RHI scheme early.

In regards to the RHI payments, one thing we later realised was that the RHI payments were skewed by the EPC we had done at the time of heat pump installation. Because our loft dormer was not yet finished at the time, the EPC calculated more heat loss which meant higher RHI payments (the payments then came down a bit when the loft was signed off and a new EPC was issued and resupplied to Ofgem).
Anyway, as the RHI scheme is ending in March it feels like that point is a little mute for anyone still looking to get on board with it, although there's still time if you can find an installer!

The new offering from the Government is a £5,000 grant for a heat pump, in a new scheme due to start in April 2022. With the money we spent, that would put our total costs to £3,500 (which is a little more than the £2,700 we were quoted for a gas boiler). I can see us making use of this in our next house purchase as based on our experience, I am expecting that we will get another heat pump in our next house. It's a shame to see there is no support for insulation measures, however.

Also worth mentioning is Octopus Energy (who are rather good in my experience), they've announced that once the grant scheme starts next year, they will be installing heat pumps for about the same cost as gas boilers. Worth keeping an eye on! (And of course, here's the obligatory link to my referral code if you like that sort of free-£50 thing).

I spoke about my heat pump installation at the Green Hanover Homes event and you can see me talk it online.