How heat pump cost and savings are estimated

Install cost is priced per kW of recommended heat pump size — a small property typically needs around 5kW, a medium property around 8kW, and a large property around 12kW, though the right size really depends on a proper heat loss survey. At an indicative ~£1,250 per kW, an 8kW system costs roughly £10,000 before any grant; the Boiler Upgrade Scheme (BUS) then knocks a flat £7,500 off the install cost for eligible homes in England and Wales. Running cost converts your annual heat demand into the electricity a heat pump would use, based on a seasonal coefficient of performance (SCOP) of 3.5 — meaning each unit of electricity delivers 3.5 units of heat — priced at your electricity rate, and compares that with the same heat demand delivered by a gas boiler running at 90% efficiency, priced at your gas rate. Because electricity costs several times more than gas per kWh in the UK, a heat pump's running cost can end up similar to or even higher than gas despite being far more efficient — the saving shown can be negative, and a better outcome usually needs a cheaper electricity tariff, solar panels, or a genuinely well-insulated home with a high real-world SCOP.