Your heating system is one of the largest expenses for your home. Pick the right system and you can save yourself hundreds each year. Two of the most common options these days are boilers vs heat pumps.
While they both heat your home, they do it in completely different ways. This guide will compare costs to help you decide which is best for your budget.
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How Does Each System Work?
Boilers burn fuel to heat water which is circulated through pipes to radiators or underfloor heating. Natural gas boilers in the UK have an average efficiency of between 90-95 percent.
Heat pumps don’t burn fuel. Instead, they extract heat from the air outdoors, and move it inside your home. They can still do this even when the air outside is cold. Heat pumps can achieve efficiencies of between 280 and 400 percent. This means you can get two to four units of heat for every unit of electricity you use to power the heat pump.
It’s this fundamental difference that makes the cost comparison below far from cut-and-dried.
Cost of Installation
On face value, boilers win this round. A new gas boiler will typically cost you somewhere between $2,500-$4,500 to install. Heat pumps are more expensive. Installation costs for an air sourced heat pump can range from $5,000 to $15,000 depending on the size of your home and existing heating system.
It’s here that many people opt for the boiler. But remember, those savings come with far higher monthly energy bills.
Monthly Energy Bills
Gas costs less per unit than electricity. In the UK domestic gas costs approximately 6.76p/kWh. Electricity, however, costs consumers around 24.5p/kWh. Americans pay roughly the same rates. So if you compare these two costs, heating with a gas boiler seems cheaper.
But heat pumps are 3-4 times more efficient than boilers. Let’s do some more maths.
A gas boiler will cost you about 7.35p to produce one unit of heat. A heat pump in an insulated house can deliver that same unit of heat for between 7p and 9.8p. The key is that the house needs to be well insulated, and your heat pump needs to be correctly sized for the property.
In a well-insulated house with a properly sized heat pump, your monthly costs will be roughly equal to that of a boiler – or cheaper.
Heat Pump Savings
If you have an old, inefficient boiler, installing a heat pump can save you money from day one. The Energy Saving Trust estimates moving from a G-rated gas boiler to a heat pump can save you £210 – £320/year. Over the 10-15 year lifetime of the heat pump, that starts to become significant.
If you’re swapping out a newer, efficient boiler, your annual savings won’t be as high. Compared to a new A-rated gas boiler, switching to a heat pump could save you as little as £10-£30/year on energy bills. Suddenly, that extra installation cost is harder to recoup.
Your home’s insulation makes a big difference too. Heat pumps perform best in houses with good insulation. They are designed to run at lower temperatures than boilers. So if you lose heat easily due to poor insulation, a heat pump will spend more time pumping heat and your bills will be higher.
Total Cost of Ownership
If you factor in purchase price, installation costs, maintenance, and yearly energy bills across 15 years, boiler vs heat pump looks like this:
Gas boilers are approximately £100/year to maintain. Heat pumps are closer to £200/year. However heat pumps don’t have as many moving parts as combustion boilers and usually last 15-20 years when maintained.
One study from the Energy Transitions Institute found heat pumps could come out cheaper than gas boilers over their entire life – if electricity costs are less than or double that of gas. In some parts of the US, that’s already true. In areas where electricity is cheap, heat pumps come out way ahead in terms of lifetime cost.
If you qualify for tax credits or rebates that can change things too. Under the new Inflation Reduction Act, qualifying heat pump installations in the US are eligible for up to $2,000 in federal tax credits. Many states also offer additional rebates. This can dramatically lower your initial cost and shorten your payback period.
Boiler or Heat Pump?
So which system should you choose? There’s no one-size-fits-all answer. But here is a quick guide to help you decide:
If you currently have gas and want to save money up front choose a boiler. Boilers are also a better option if you live in an extremely cold climate or your home is poorly insulated and you cannot upgrade it.
If you’re looking to upgrade an old inefficient boiler, save money over the long-term, add solar panels to your home in the future or want to reduce your carbon emissions, go with a heat pump.
Heat pumps offer the best value for most homeowners. The upfront cost is higher than a boiler but over the lifetime of the system you make up for those losses in lower energy bills and longer equipment lifespan. Incentives and tax credits can also knock a grand off the cost of installing a heat pump.
Case Study: Comparing a Boiler vs Heat Pump Before Replacing an Old Heating System
Mark and Lisa’s gas boiler had started breaking down every winter for the last couple of years. It was 18 years old and they thought that their cheapest option would be to simply replace it with another gas boiler. After all, they were only quoted £2,500 for the installation. In comparison, the cheapest heat pump installation quote they received was over £5,000.
However, before they’d made their final decision they decided to use an online boiler vs heat pump calculator. This allowed them to compare the total cost of ownership over the entire lifetime of the systems, rather than just looking at installation cost.
The calculator considered:
- Their existing yearly energy bills
- Local electricity and gas costs
- The level of insulation in their home
- Estimated efficiencies of both systems
- Predicted maintenance costs
- Government grants or incentives
The calculator revealed that whilst the installation cost for a new gas boiler was significantly cheaper than a heat pump, their home was well insulated and therefore a great candidate for heat pump installation. The annual running costs would be slightly lower and they were eligible for a decent sized grant to offset some of the installation cost.
Heat pump installation
After some thought, they went ahead with installing the heat pump.
In its first full year of use, they benefitted from:
- Lower yearly heating bills
- More even temperatures throughout their home
- Lower carbon emissions
Peace of mind that they wouldn’t be affected by future government legislation on gas boilers or have to find the money to replace another ageing gas boiler in 10 years time.
Although their heat pump required a higher initial investment than sticking with a gas boiler, it turned out to be the more economical choice for their property in the long run.
Using the calculator allowed them to compare the lifetime cost of owning a heat pump vs boiler rather than just the installation price.
Frequently Asked Questions
Is it cheaper to run a heat pump or a boiler?
It depends on a few factors. Heat pumps are vastly more efficient than boilers but yearly running costs will be affected by electricity rates, gas prices, the insulation of your home and the efficiency of the heat pump itself. Installed in a well-insulated property, a heat pump can often compete with or outperform a modern gas boiler on running costs.
Which is cheaper to install?
Heat pumps will almost always have a higher installation cost than a boiler. Simply replacing an existing gas boiler can be a quick and easy job for a certified installer. Heat pumps can require radiators to be upgraded, along with new pipework and electrical systems. This work can increase the overall price.
Do heat pumps work when it’s cold outside?
Yes! As long as the temperature is above -15°C an air source heat pump can extract heat from the air. However, they are less efficient when the temperature is very cold. This is why proper sizing and good home insulation is so important.
How long do heat pumps last?
Heat pumps should come with a warranty to guarantee performance for 5 to 10 years, but if they’re correctly installed and well maintained both heat pumps and boilers should last around 15 years.
Are heat pumps better for the environment?
In most cases, yes. Heat pumps don’t burn fuels on-site to generate heat, meaning they’re much cleaner and produce far less carbon emissions. If you’re on a green energy tariff or can generate your own electricity using solar panels this number will be even lower. The environmental impact of a heat pump depends on how your local area generates electricity.
Can I install a heat pump without upgrading my home?
You may be able to but it depends on your property. Heat pumps work best in well-insulated homes so if yours has poor insulation you might want to consider loft insulation, cavity wall insulation or new replacement radiators to improve a heat pump’s efficiency and comfort levels.
Should I still consider installing a boiler?
Definitely. Boilers are not going away anytime soon and when installed and maintained correctly a modern condensing boiler is still a very efficient and cost effective heating solution.
There are however cases where installing a heat pump may be more beneficial than replacing your boiler. If you’re connected to the gas network but your property would need new radiators, pipework and electrical upgrades to accommodate a heat pump, you may find that the energy savings of a heat pump will cover these costs.
What should I compare when choosing a new heating system?
Ask yourself these questions:
- How much does it cost to install?
- How much will it cost to run per year?
- How much will maintenance/set-up cost?
- How long does the system usually last?
- What are the energy prices like in my area?
- How well insulated is my home?
- Are there any grants or incentives that can reduce the cost?
- Am I looking to reduce my impact on the environment?
Instead of just looking at the initial purchase price, compare the total cost of owning a boiler vs heat pump.
Will solar panels decrease the running costs of a heat pump?
Yes, solar panels allow you to generate your own electricity which can be used to power your heat pump. Whilst you’re unlikely to completely power your heat pump using solar energy, you can definitely use solar panels to reduce your energy bills.
Should I use a boiler vs heat pump calculator?
We think it’s a must. Rather than going solely based on which brand or quote is cheapest, use an online calculator to get a good estimate of installation costs, yearly running costs and potential savings based on your home and energy usage.
Final Words
There is no definite winner. Every homeowner will come to different conclusions based on their individual situation. A boiler is a better option if you want lower upfront cost and live in a cold climate. A heat pump will save you money if you have the money to spend upfront and live in a mild climate with a well-insulated home.
To find out which is best for you, get quotes for both installations. Check out what rebates are available in your region. Finally, take a look at your current energy bills. The system that lets you keep the most money should be the one you choose for your home.
