Heat pumps: how they work and typical costs

Heat pumps run on electricity to move heat from the air, ground or water into homes, and UK homeowners can get a £7,500 Boiler Upgrade Scheme grant while typically paying about £5,000 extra for installation.

Developers in England will be required to fit heat pumps and solar panels in new homes under updated building regulations, following the government’s Warm Homes Plan and a pledged £15bn to help households adopt low-carbon technologies. Heating homes accounts for about a fifth of the UK’s emissions, so policymakers view switching from gas and oil to heat pumps as a route toward net zero. Interest and sales are rising, but deployment remains well below the levels climate advisors say are needed. Key facts: - How they work: Heat pumps run on electricity and move heat from air, ground or water into a building; air-source models are the most common and use refrigerant and a compressor to raise temperature. - Types and size: An air-source outdoor unit is roughly 1m x 1m x 0.4m, the indoor unit is about the size of a gas boiler, and a hot water cylinder size varies by property; ground-source systems are generally more efficient but costlier due to drilling or digging requirements. - Costs and grants: The Boiler Upgrade Scheme offers a £7,500 grant for air- or ground-source heat pumps (extended to 2029/30); households typically pay about £5,000 extra beyond the grant, and removing insulation preconditions can save around £2,500 in upfront costs. - New-build impact and funds: The Home Builders Federation estimates the new planning rules could add about £10,000 to a new home’s cost; the government has also pledged £5bn for social housing and local grants for insulation, solar and heat pumps. - Noise and rules: Noise limits for newer units are set below 42 dB and some prior planning restrictions near neighbours have been relaxed to encourage uptake. - Deployment levels: Nearly 125,000 heat pumps were sold in 2025, but the Climate Change Committee says annual installations must rise to about 450,000 by 2030 and 1.5 million by 2035, with roughly half of UK homes needing heat pumps by 2040. Summary: Heat pumps are central to UK plans to cut home-heating emissions and are supported by grants and new building rules in England. Upfront costs remain substantial for many households, uptake is increasing but needs to accelerate to meet stated deployment targets, and more trained installers are required to scale installations.