Heat Pump Installation Cost and EPC Improvement — ASHP vs GSHP in 2026

Heat Pumps and EPC Ratings — the Fundamentals

A heat pump works by extracting low-grade heat from the outside air (air source) or the ground (ground source) and concentrating it to heat your home. Unlike a gas boiler, which burns fuel to create heat, a heat pump moves heat — and because it moves more energy than it consumes in electricity, it registers very favourably under the SAP methodology used to calculate EPC scores.

Replacing an old gas or oil boiler with a heat pump is one of the most significant single steps you can take to improve an EPC rating. Combined with good fabric insulation, a heat pump installation commonly delivers a 15–25 SAP point improvement — enough to jump two or even three EPC bands.

Air Source vs Ground Source Heat Pumps

**Air Source Heat Pumps (ASHP)**

An ASHP has an external unit (similar in appearance to an air conditioning condenser) mounted on an outside wall or on the ground adjacent to the property. It extracts heat from the air down to temperatures as low as -20°C. Modern units operate at a Coefficient of Performance (CoP) of 2.5–4.5 — meaning they deliver 2.5 to 4.5 units of heat for every unit of electricity consumed.

Installed cost in 2026: **£8,000–£16,000** before grant, **£500–£8,500** after the £7,500 Boiler Upgrade Scheme (BUS) grant.

**Ground Source Heat Pumps (GSHP)**

A GSHP uses pipes buried in the ground (horizontal trenches or vertical boreholes) to extract the more stable heat stored in the earth. Ground temperatures below a few metres stay at roughly 10–12°C year-round, making GSHPs slightly more efficient than ASHPs in cold conditions. They are more expensive to install due to ground works.

Installed cost in 2026: **£15,000–£35,000** before grant, **£7,500–£27,500** after the £7,500 BUS grant.

The Boiler Upgrade Scheme Grant

The Boiler Upgrade Scheme (BUS) is administered by Ofgem on behalf of the government. It provides a one-off grant of:

• **£7,500** for air source heat pumps (ASHP)
• **£7,500** for ground source heat pumps (GSHP) and water source heat pumps

The grant is paid directly to your MCS-certified installer, who deducts it from your invoice. You do not receive it as cash. To qualify, your property must have a valid EPC issued within the last ten years (not older), and the EPC must not recommend cavity wall or loft insulation that has not yet been carried out (the government expects the fabric to be sorted first).

Check the current BUS scheme details at the Ofgem website, as funding rounds and eligibility conditions can change.

Is Your Home Heat-Pump Ready?

Heat pumps work at lower flow temperatures than traditional gas boilers — typically 35–55°C versus 60–80°C for a conventional boiler. This means:

1. **Insulation matters**: A poorly insulated home will require the heat pump to run at higher temperatures to maintain comfort, reducing efficiency. Loft and wall insulation should be addressed before or alongside a heat pump installation.

2. **Radiator sizing**: Existing radiators may need to be replaced with larger ones (or underfloor heating used) to distribute enough heat at lower flow temperatures. A good installer will carry out heat loss calculations room by room.

3. **Hot water cylinder**: Heat pumps heat water in a separate cylinder rather than on-demand like a combi boiler. You will need space for a hot water cylinder (typically 180–250 litres).

4. **Electrical supply**: An ASHP requires a sufficient incoming electricity supply — usually a 100A single-phase supply is adequate, but your installer should check.

EPC Score Impact

Under the current SAP 10.2 methodology, heat pumps score very well because electricity's carbon factor has fallen significantly as the UK grid has decarbonised. A typical upgrade from an old oil boiler to an ASHP in a semi-detached home with good insulation might move the property from EPC E or D all the way to B. Moving from a modern gas combi boiler to a heat pump typically delivers a smaller but still meaningful uplift — commonly 10–20 SAP points.

Use the [EPC Improvement Calculator](/epc-improvement-calculator) to model the specific SAP impact of a heat pump installation for your property type and existing rating.

Running Costs

Heat pumps run on electricity, which costs more per kWh than gas. However, their high efficiency (CoP of 3+ means three units of heat per unit of electricity) largely offsets this. Annual running cost comparisons in 2026:

• Gas combi boiler (A-rated): approximately £900–£1,400/year for a 3-bed semi
• Air source heat pump (well-insulated home): approximately £800–£1,300/year

The gap is narrowing as gas prices remain elevated. Over a 15–20 year heat pump lifespan, total cost of ownership is broadly comparable to gas in most scenarios, with the advantage of a dramatically better EPC score and much lower carbon emissions.