‘Why the economic argument for heat pumps is flawed’

A domestic heat pump installation project (Image: Dreamstime/Welcomia)
Ken Read MCIAT offers a reality check for headlines that eulogise air source heat pumps in the battle against climate change.

An article about banning gas boilers, appeared in the Mail Online, on Wednesday 26 May 2021, it stated in relation to air source heat pumps, (costing £11,000 to install).

“A typical three-bedroom home is said to be able to save £2,755 in ten years by using this instead of a gas boiler.”

This is statement is absurd, untrue and totally incorrect.

An air source heat pump does not produce heat, it only transports it, concentrates it and releases it inside a building, working similarly to a refrigerator.

The efficiency of a heat pump is quoted as a Coefficient of Performance (CoP), because it is not actually producing the heat. A typical heat pump will have a CoP of 3 or 4 which is equivalent to 300% or 400% efficiency of a boiler producing heat, usually CoP 4 is in summer and CoP 3 in winter, as the lower external temperature makes it more difficult to transport and concentrate the heat.

A current condensing gas boiler has an efficiency rating of approximately 95%. On those initial figures it would appear a heat pump is three to four times more efficient than a condensing gas boiler.

Unfortunately, this is only part of the story. Currently gas prices are about 3.2 pence per Kwh and electricity is about 18 pence per Kwh (Octopus tariff prices). This means that an electric heat pump is 18/3.2 = 5.625 times more expensive to run than a gas boiler, a heat pump’s winter efficiency is 300/95 = 3.16 times more efficient, therefore to run a heat pump is 5.625/3.16 = 1.78 times more expensive in true economic terms.

“An air source heat pump will never make a saving at current gas and electric prices, in fact it will cost nearly twice as much.”

Ken Read MCIAT

It will never make a saving at current gas and electric prices, in fact it will cost nearly twice as much. This is particularly true when considering that the heat produced by a heat pump is usually of lower temperature than that which can be produced by a gas boiler, requiring either underfloor heating or enlarged radiators to effectively heat a premises.

When considering global warming, additional factors other than economics are relevant. Electricity is supposedly green and burning gas as a fossil fuel is bad for the environment, however the carbon cost of electricity production is only less than gas production if the electricity comes from eco-friendly resources such as solar, wind or hydropower.

Solar power is in abundance in summer months, when least heating is required and the opportunities for hydropower in the UK are very limited. It would therefore be necessary to produce all electricity by wind power during winter months to maintain a reduction in carbon emissions. Other calls on green electricity, such as EVs , trains, industry, increase the usage of this resource in winter, in addition to the normal lighting and power demands of domestic accommodation.

No account in this narrative has been taken of the production carbon cost of the unit itself. The price quoted of £11,000 for a heat pump compares unfavourably with the average cost of £2,000-£3,000 for a gas boiler installation, belying the more complicated installation and expense of equipment construction, which is not conducive to reducing a carbon footprint

Don’t get me wrong, I am an avid supporter of the fight against global warming, but it must be done intelligently and not to satisfy political deadlines or electoral pledges, when the facts and figures used to justify the action are fundamentally flawed.

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  1. Havent you forgotten to add efficiency back in? If the COP of gas is 1 and air source is 4 then the air source will use 4 times less electrical energy to create the same heat energy?

    Also you forget that electricity prices also drop dramatically at certain times of the day, and even negative at times, so you could be paid to heat your home.

    I think the debate is a lot more nuanced than your simplistic summary.

  2. Thank for a sensible article on the subject. I would like to add that should a household have a heat pump, combined with an electric vehicle and this is repeated along the row, the electrical infrastucture as it stands would be stressed. On a frosty evening when the heat pump will probably be using its internal heater to make up the short fall in home heating and the electric vehicle that must be recharged for the next day will put a strain on the domestic electrical installation and maybe no heat, no car and no internet !!!

  3. So in your opinion what is the answer?

  4. Finally some real insight. How are we going to generate all the electricity required to power everything (industry, commerce, cars, trains, planes and houses)? Wind power in Winter might be able to replace the solar but on the coldest days there generally isn’t any wind when the demand will be highest.

  5. I agree that in the current circumstances, it’s unlikely a heat pump will cost less to run than a mains gas boiler. However, my gas is more like 5p/kWh rather than 3p, and the article’s calculation doesn’t allow for the saving of using Economy 7. A heat pump may be cheaper in the future when there’s a lot more cheap wind power, and gas is more expensive.

    What I disagree with more is the widely quoted cost of £11k for a (air-source) heat pump. A decade ago I pensioned off my gas boiler and have used an air-to-air heat pump (and existing electric heaters) and existing immersion heater instead. It cost well under £2k, lasted 10yr, and its recent replacement cost well under £2k. The whole system’s electricity running cost (on Economy 7) is little more than the cost of the gas used by the old, inefficient boiler, even before taking into account the saving on annual servicing. Maybe a whole air-to-water heat pump heating system could cost £11k, installing it from scratch, particularly if you put in underfloor heating, but you would have to compare this cost with that of installing an entire gas-fired heating from scratch, not just the cost of a replacement boiler.


    In reply to some of the comments: No 1 the efficiency is taken care of in the first calculation, nothing is missed.
    No 2 & 4 thankyou for your support. No 3 the answer is INSULATION, INSULATION, INSULATION. Don’t use the energy, don’t produce the carbon and don’t pay for it. No 1&5 Economy 7 and negative pricing only happens at night, prices are high during the day. No5 A heat pump installation for £2K, the government would like the name of it.

    In addition, today’s wholesale electricity prices average at 30.2p per Kw/hr, partly because of a fire at Ashford, Kent, in the France to England 2Gw supply cable, that does not bode well for the future.

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