Heat Pump Costs and Government Grants in the UK (2026): What Homeowners Need to Know

Heat pumps have moved from niche upgrade to mainstream home improvement, and the questions I hear most often stay the same. How much does it cost, what help is available, and will it actually cut bills in real UK conditions?

A heat pump is basically a fridge working in reverse. It pulls low temperature heat from outside air or the ground, then upgrades it to a useful temperature for your radiators and hot water. The big win is efficiency. A well designed system can deliver around three units of heat for every unit of electricity it uses, sometimes higher in mild weather. That efficiency is the reason heat pumps can be competitive on running cost, even when electricity costs more per kWh than gas.

Before numbers, one practical note from projects I have worked on: the installer design matters as much as the box on the wall. Flow temperatures, emitter sizing, controls, and commissioning are the difference between a home that feels steady and comfortable, and one that feels lukewarm while the meter spins.

Heat pump installation costs in the UK (2026)

Prices swing because every home is a different engineering problem, and that is not marketing speak, it is site reality. Pipework routes, cylinder space, electrical upgrades, and heat loss levels all change the scope.

Here is a realistic 2026 cost picture for typical owner occupied homes, before any grants.

Air source heat pump costs (ASHP)

Most households looking at heat pumps start here, because an air source unit usually installs without major groundworks.

Typical installed price range in 2026: £7,000 to £15,000

What pushes the price toward the lower end:

• Straightforward swap from a modern wet central heating system
• Good existing radiator sizes or only minor upgrades
• Easy outdoor unit location and short pipe runs
• No major electrical consumer unit work

What pushes the price toward the upper end:

• Larger properties needing higher capacity units
• Hot water cylinder changes plus complex pipework
• Significant radiator upgrades and control changes
• Scaffolding, tricky access, or long pipe runs

Ground source heat pump costs (GSHP)

Ground source systems can be brilliant for performance and winter stability, yet the digging is what changes the budget.

Typical installed price range in 2026: £19,000 to £30,000+

Trenches can work well when you have space, while boreholes suit tighter plots, and both are more expensive than an air source install.

What about city to city pricing, such as Manchester, Cardiff, and Edinburgh?

Regional labour rates and access conditions can shift quotes, yet the bigger driver is still your home's complexity. For a typical air source installation, you will often see:

• Manchester: commonly around £8,000 to £14,000 depending on radiator work and access
• Cardiff: often around £7,500 to £14,500, with similar drivers
• Edinburgh: often around £8,500 to £15,000, where access, stone walls, and tighter urban layouts can nudge costs upward

Treat these as planning ranges rather than promises. The only number that matters is the one produced after a room by room heat loss assessment.

Quick sense check: if a quote arrives with no heat loss calculation and no discussion about radiator sizing or flow temperatures, you are not looking at a complete design.

Boiler Upgrade Scheme (BUS) updates and eligibility as of January 2026

For homeowners in England and Wales, the Boiler Upgrade Scheme remains the headline support. Understanding current heat pump grant applications can help you navigate the process efficiently.

How much is the BUS grant in 2026?

As of January 2026, the BUS provides £7,500 toward the cost and installation of an air source heat pump or a ground source heat pump.

Who can get it?

Key eligibility points to know in plain English:

• The property must be in England or Wales
• You need a valid Energy Performance Certificate (EPC) for the property
• You must be replacing a fossil fuel system such as gas, oil, or LPG, or electric heating that is not a heat pump
• The installation must be carried out under the scheme by an MCS certified heat pump installer, who applies for the grant on your behalf

The scheme rules can be updated, so when you are ready to proceed, confirm the latest conditions with your installer during the survey stage.

What the BUS grant means for your out of pocket cost

If an air source installation comes in at £11,500, a £7,500 BUS grant can bring the net cost down to £4,000. If a ground source project costs £26,000, the grant brings it down to £18,500. That still leaves a big gap, which is why ground source tends to suit homes with the right plot and a long term view on comfort and performance.

Running costs in 2026: heat pump vs boiler, using current UK energy prices

Running cost questions usually come with a raised eyebrow, and that is fair. Electricity costs more per kWh than gas, so how can a heat pump compete?

It comes down to efficiency.

For the Ofgem price cap period 1 January to 31 March 2026, typical unit rates are around 27.7p per kWh for electricity and 5.9p per kWh for gas for customers on standard variable tariffs paying by Direct Debit, with typical annual bills quoted around £1,758 for a dual fuel home on typical consumption.

A modern gas boiler might run at roughly 85 to 92 percent efficiency in real use. A well designed heat pump can often deliver a seasonal coefficient of performance around 2.5 to 3.5, depending on home heat loss and required flow temperatures.

A quick worked example to anchor the idea.

• Suppose your home needs 12,000 kWh of heat for space heating over a year.
• With a boiler at 90 percent efficiency, you might buy roughly 13,300 kWh of gas.
• With a heat pump running at a seasonal performance of 3.0, you might use about 4,000 kWh of electricity.

At the capped unit rates above, that rough maths points to:

• Gas: 13,300 kWh × 5.9p ≈ £785 for the heating energy
• Heat pump: 4,000 kWh × 27.7p ≈ £1,108 for the heating energy

So does that mean heat pumps always cost more to run? Not necessarily, because real homes are not averages.

What often changes the outcome:

• Your tariff. Time of use tariffs and smart controls can bring effective electricity costs down.
• Your system design. Lower flow temperatures often mean better efficiency.
• Your insulation and draughts. Less heat loss is always the cheapest heat.
• Your fuel. If you are on oil, LPG, or old electric storage heaters, the running cost picture often looks far better.

The honest takeaway: for many gas heated homes, the case for a heat pump is strongest when you value stable comfort and carbon cuts, and when you can combine the install with insulation improvements or low temperature heat emitters.

How much could you save, and how much carbon could you cut?

Savings are personal to your home, your tariff, and how you use heating. Some households do see meaningful bill reductions, especially where the alternative is oil, LPG, or direct electric heating. Others see similar bills but a better, steadier heat, plus long term resilience as the grid gets cleaner.

On carbon, the direction is clearer.

Based on widely quoted UK estimates from established energy bodies, switching a typical three bedroom home from a gas boiler to an air source heat pump can cut emissions by around 1,900 kg CO2 per year in many scenarios, with larger reductions when replacing oil or older, inefficient boilers.

Ask yourself one question: do you want to keep paying for combustion in your home for the next decade, or would you rather shift to an appliance that gets cleaner as the electricity grid decarbonises?

Regional support and top ups across the UK

Support is not one size fits all. The UK's nations and local areas run different schemes, and they change over time.

Scotland

Scotland's main route for owner occupiers is the Home Energy Scotland Grant and Loan.

• Grant funding for clean heating systems such as heat pumps is available up to £7,500
• An optional interest free loan can be available for up to £7,500
• Some rural and island households may qualify for a higher grant level in specific circumstances under the scheme rules

This structure can materially change affordability, especially where a household wants to combine a heat pump with insulation work.

Wales

In Wales, support often comes through programmes like Nest, which can offer a tailored package of home energy improvements for eligible households, and this can include heat pumps where appropriate.

Some households will use BUS in Wales, while others may be directed toward support that better matches income and vulnerability criteria. If you are in Cardiff or the Valleys, it is worth checking what route fits your situation before you commit to quotes.

Northern Ireland

Northern Ireland has its own landscape. Some support routes sit under NISEP schemes approved for each year, and availability can change between funding years, with schemes often targeting households who do not qualify for other government assistance.

If you are in Belfast, Derry, or a rural area, the practical move is to check what is open right now and what criteria apply, then align your installation timeline to funding windows.

Local authority and regional offers

Local councils and devolved programmes sometimes run time limited schemes, especially for low carbon heat in social or mixed tenure settings, and these can affect private homeowners indirectly through area based projects.

Because these offers can appear and close quickly, treat them as a bonus rather than the foundation of your plan.

Air source or ground source: how do you choose?

The right choice is usually obvious once you look at the property. Comparing Samsung and Baxi heat pump options can help you understand the performance differences between leading manufacturers.

Choose air source when:

• You want lower upfront cost and simpler installation
• You have a sensible outdoor location for the unit and good airflow
• Your home can run at lower flow temperatures after modest radiator upgrades

Choose ground source when:

• You have the land for trenches, or the budget for boreholes
• You want very stable winter performance and quiet operation
• You are planning to stay put long enough to justify the higher upfront spend

Either way, your comfort depends on heat loss and emitter sizing. Radiators that are too small force higher temperatures, that reduces efficiency, and that is where running costs can disappoint.

If you are also planning underfloor heating as part of a renovation, a specialist supplier such as ThermRite can help you source the right materials for a low temperature system that suits heat pumps.

A simple checklist before you sign anything

• Ask for a room by room heat loss calculation and keep a copy
• Confirm the target flow temperature the system is designed to run at
• Check whether radiators need upsizing and whether that is included
• Discuss hot water cylinder capacity and reheat times
• Ask about controls and how the system will be commissioned
• Confirm the exact grant route and who applies for it

Where this leaves you

Heat pumps in 2026 sit at a practical crossroads. Upfront costs are still significant, yet grants can take a large bite out of the price in England and Wales, Scotland's grant and loan approach can help with bigger projects, and the carbon benefit is hard to ignore.

If you want the next step to feel straightforward, book a survey with a qualified MCS installer, ask for a proper heat loss calculation, then compare a few like for like designs, because good decisions come from clear numbers rather than hopeful estimates.

Frequently Asked Questions

Do I need to replace all my radiators for a heat pump?

Not always. Many homes need some radiator upsizing, especially in the coldest rooms, because heat pumps work best at lower flow temperatures. A room by room heat loss assessment will show what needs changing.

Will a heat pump work in an older home in Edinburgh or Manchester?

Yes, plenty do. Performance depends on heat loss, draught control, and emitter sizing. Older, solid wall homes may need targeted insulation and careful system design to keep flow temperatures low.

Can I get the Boiler Upgrade Scheme grant for a heat pump in Wales?

Yes, the Boiler Upgrade Scheme covers England and Wales and provides £7,500 for eligible air source and ground source heat pump installations, applied for by the MCS certified installer.

Are heat pumps cheaper to run than gas boilers in 2026?

It depends on your home, your tariff, and how efficiently the system runs. With the January 2026 price cap unit rates, heat pumps can be cost competitive in well insulated homes running low flow temperatures, and they often look favourable against oil, LPG, or direct electric heating.

What support exists in Scotland if I want a heat pump?

Home Energy Scotland offers a grant for clean heating systems up to £7,500, with the option of an interest free loan up to £7,500, subject to eligibility and scheme rules.