PRACTICAL GUIDE · UPDATED 2026-10-30

Heat pumps: how they work and whether they could cut your bills

A heat pump moves environmental heat into your home; its seasonal performance and your electricity tariff determine the running-cost comparison.

Outdoor airHeat is collected from the environment.

Heat pump + electricityThe compressor raises the temperature.

Warmth for your homeHeat transfers to the heating water.

How an air-source heat pump moves heat. Concept diagram, not an installation drawing. An air-to-water system may also heat a suitable hot-water cylinder. A survey determines sizing and emitters.

An air-to-water heat pump collects heat from outside air, including in cold weather. Electricity drives a compressor that raises the refrigerant's temperature; a heat exchanger transfers that heat into water for radiators or underfloor heating. The refrigerant then cools and repeats the cycle. Ground-source systems collect heat through buried pipes. These systems move heat rather than obtaining all their heat from electricity alone, and can reduce operational carbon emissions compared with fossil-fuel heating.

Coefficient of performance (COP) means heat delivered divided by electricity used under particular conditions. COP 3 means 1 kWh of electricity delivers 3 kWh of heat; the extra heat comes from the environment. A favourable test COP is not a year-round promise. Seasonal coefficient of performance (SCOP) describes performance across a season under defined conditions; seasonal performance factor (SPF) describes seasonal heat output relative to electricity input for the stated system boundary. Ask for the home's predicted SPF and whether it includes hot water, circulation pumps, defrosting and electric backup.

Compare the cost of the same useful heat: heat-pump pence per kWh of heat = electricity tariff in p/kWh ÷ seasonal performance; boiler pence per kWh of heat = gas tariff in p/kWh ÷ boiler seasonal efficiency. Enter boiler efficiency as a fraction, such as 0.90 for 90%, using an evidenced estimate for your system. The heat pump has a lower energy cost per unit of heat when its seasonal performance exceeds (electricity tariff ÷ gas tariff) × boiler efficiency. This is a comparison formula, not a savings forecast. Use a consumption-weighted electricity price for time-of-use tariffs, and include backup energy consistently.

Annual costs also depend on heat demand, hot-water use, controls, maintenance and standing charges. Electricity consumption can rise while gas consumption falls. Keeping a gas supply for cooking can retain its standing charge; stopping boiler use alone does not remove it. There are no guaranteed bill savings. Request scenarios for different tariffs and seasonal performance rather than a single optimistic figure.

A site survey should establish room-by-room heat loss, insulation opportunities, radiator output at the proposed water temperatures, pipework suitability, hot-water storage and electrical requirements. Existing radiators may be suitable or need enlarging; underfloor heating is not compulsory. Insulation reduces heat demand, but an older home is not automatically unsuitable. Check outdoor space, airflow, noise, condensate arrangements and any planning restrictions. Ask a suitably certified installer for the design, an exact itemised quote, commissioning and controls training. Check current GOV.UK Boiler Upgrade Scheme eligibility before relying on funding.

Your checklist

Obtain a heat-loss assessment and predicted seasonal performance for your home.
Compare useful-heat costs using your actual tariffs and realistic boiler efficiency.
Include radiator, cylinder, electrical and installation work in the quote.
Confirm grant eligibility, servicing and handover arrangements in writing.

Sources & further reading

General information, not a property assessment, booking or assurance about a listed business. Dates indicate content updates; they are not invented publication dates.

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