SecondAround 130 million households in Europe burn nearly 40% of the continent’s total natural gas consumption each year to heat their homes. These boilers emit more than a fifth of Europe’s greenhouse gas emissions in the process.
Many warn that the dominance of rudimentary gas boilers could undermine global climate goals while leaving Europe dependent on gas imports and saddled with higher energy costs.
For most European households, the answer is likely to be electric air-source heat pumps, as governments work to eliminate carbon emissions. But not all families believe this. In Britain, plans to replace millions of gas boilers across the country with little-known devices have sparked a culture war. Some believe heat pumps can play a vital role in climate action, while skeptics dismiss their benefits as empty talk.
Between these binary positions lie millions of households with little clarity and facing high-stakes financial decisions. In a series of articles we focus on the myths, realities and gray areas of the heat pump agenda. The first question in our series is: Are heat pumps more expensive than gas boilers?
claim
It’s true that heat pumps are expensive. In the UK, most homes are expected to choose air source heat pumps, which cost on average just over £12,500 to buy and install, according to industry certification body MCS. This is four to five times the cost of a gas boiler, which typically costs between £1,600 and £3,000, depending on the size required.
The UK Government’s Heat Pump Grant Scheme has allocated £7,500 to replace gas boilers with heat pumps. Similar schemes have spurred the adoption of heat pumps across Europe. In Poland, the government is offering households up to €14,420 (£12,403) to install green energy solutions, including heat pumps. In Italy, the government has launched a short-term “super bonus” scheme that covers 110% of the cost of green home upgrades, including heat pump installations. However, the upfront cost gap has been narrowing, with some heat pump installations approaching the cost of a gas boiler once the grant is factored in.
Critics of the heat pump rollout warn that even with government subsidies, households could face higher energy bills and potentially need expensive home upgrades. Electricity is around four times more expensive than gas in the UK, according to the regulator’s latest energy price cap, raising concerns that heat pumps will cost more to run overall. There are also concerns that households may face significant costs to upgrade radiators or improve home insulation to ensure heat pumps are effective.
But do these concerns stack up? The Guardian will discuss whether all homes are suitable for heat pumps later in this series. To understand the operating costs of a heat pump, we turned to research from independent experts.
science
Dr. Jan Rosenow, an academic and program director of the Regulatory Assistance Program (RAP), regularly analyzes changes in the operating costs of heat pumps and gas boilers.
In a recent paper published in Carbon Brief, he explains that although electricity is more expensive than natural gas, heat pumps have similar running costs to gas boilers because they generate heat more efficiently. On average, he said, heat pumps convert one unit of electricity into 2.5 to 5 units of heat, which means they use about three to five times less energy than gas boilers.
Technically, the metric used to evaluate a heat pump’s efficiency over a year is called the Seasonal Coefficient of Performance (SCoP). Rosenow’s analysis shows that a heat pump with an SCoP greater than 3 will match the operating costs of an 85% efficient gas boiler, while a heat pump with an SCoP of 3.2 will match the cost of a 90% efficient Class A gas boiler.
So how do heat pumps score in the UK? A recent study of 750 homes by Energy Systems Catapult, an independent government-backed research organization, found that heat pumps typically have an SCoP of 2.9. This means there is a small additional cost to running a heat pump compared to a gas boiler.
The findings are backed by independent advisory group the Energy Saving Trust, which found that running a heat pump is £14 more expensive per year than running a new A-rated gas boiler. The same study found that heat pump users could save £340 a year compared to using an older G-rated gas boiler.
Rosenau and the Energy Saving Trust used the standard energy tariffs set by the UK energy regulator for UK price caps in their calculations. But Rosenau noted that new energy tariffs designed specifically for heat pump users could tip the balance in their favor.
Octopus Energy has launched Cozy Octopus, a new heat pump electricity price of 19.6pa kWh, which is well below the standard electricity price cap of 25p per kWh that will be implemented from April to June 2024. 100 households signed up to its heat pump + electricity tariff offer a price of 15p per kWh. These tariffs will make even a heat pump with an SCoP score well below 2.9 significantly less expensive to operate than a new gas boiler.
Precautions
Each country will be different. The economics of heat pumps compared to gas boilers depend on government grants to reduce upfront installation costs and the fluctuating costs of electricity and gas.
In each country, the benefits of a heat pump depend on its installation. A poorly installed heat pump will fail to achieve the average SCoP of 2.9 identified in site studies, which is the critical point at which heat pumps achieve parity with gas boilers, which can quickly erode any expected savings – even with high value energy tariffs.
That said, some heat pump installers are reporting SCoP levels of around 4 (even in older properties), which represents potentially greater savings than the current average modeled by Rosenow.
This is an important warning as it emphasizes the importance of choosing a reliable heat pump installer for the job. A good installer should also be able to advise on whether any home energy efficiency upgrades are needed to help control upfront installation costs.
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“Heat pumps can save costs compared to gas boilers,” Rosenau said. “But only if the system is operating at good efficiency and funding is available. In the future, the government will need to rebalance electricity tariffs to make heat pumps the lowest-cost heating option.
The UK government is already considering reducing electricity costs by shifting the green tax, usually paid for through electricity bills, into general taxation or gas bills. This will result in greater savings by choosing a heat pump.
Early indications are that heat pumps are already delivering some economic benefits. In one of the UK’s largest independent home heating surveys, around two-thirds (67%) of households with heat pumps said they were satisfied with running costs, compared with 59% of gas boiler owners, even though No large-scale energy efficiency upgrades were made.
The survey, carried out last winter by innovation charity Nesta, which heard from more than 2,500 domestic heat pump owners and more than 1,000 domestic gas boiler owners across England, Scotland and Wales, was thought to be specific to how households use domestic heat pumps. Largest survey ever.
