Heat Pump vs Gas Boiler: Cost Comparison Guide

Heat pumps and gas boilers are two heating options for Scottish homeowners, each with distinct costs and benefits. Here's a quick breakdown to help you decide:

• Heat Pumps: High upfront costs (£7,000–£25,000) but lower emissions and long-term savings. Running costs depend on electricity prices, averaging £855–£1,700 annually. They last 20–25 years and are supported by government grants of up to £9,000.
• Gas Boilers: Cheaper to install (£2,000–£4,000), with lower initial costs but higher carbon output. Running costs range from £780–£1,615 annually, and they typically last 10–15 years. Their future is uncertain due to upcoming bans.

Quick Comparison

Factor	Heat Pumps	Gas Boilers
Upfront Cost	£7,000–£25,000	£2,000–£4,000
Annual Running Cost	£855–£1,700	£780–£1,615
Lifespan	20–25 years	10–15 years
Efficiency	250–450%	92–94%
CO₂ Emissions	~850 kg/year	~2,200 kg/year

Heat pumps align with Scotland's net-zero goals, while gas boilers remain a cost-effective short-term solution. Your decision depends on budget, property type, and long-term priorities.

What it ACTUALLY costs to run a Heat Pump (vs Gas Boiler)

1. Heat Pump

Heat pumps are changing the way Scottish homes approach heating, offering a more energy-efficient solution despite the high initial costs. Here’s a closer look at the financial aspects of installing and running heat pumps, along with their long-term benefits.

Initial Installation Costs

The cost of installing a heat pump can vary widely based on the system type and size. For Scottish homes, air source heat pumps are a common choice, with installation costs ranging between £7,000 and £14,000 for a typical 3–4 bedroom house.

Different types of heat pumps come with varying price tags:

• Air-to-water heat pumps, which can integrate with existing radiator systems, cost around £15,000 for supply and installation.
• Air-to-air heat pumps are a more affordable option, costing approximately £3,000.
• For those considering ground source heat pumps, the price is significantly higher. A horizontal ground source installation costs around £24,000, making this option better suited to larger properties with ample land.

While installation costs are a major consideration, ongoing running expenses also play a key role in determining affordability.

Running Costs and Energy Efficiency

Heat pumps are known for their impressive energy efficiency, generating up to 400% efficiency - that’s four units of heat for every unit of electricity used. In comparison, traditional gas boilers typically achieve efficiencies of about 90–94%.

Here’s how annual running costs compare between heat pumps and gas boilers for different household sizes:

Household Size	Annual Energy Demand	Heat Pump Running Costs	Gas Boiler Running Costs
1 bedroom	8,000 kWh	£855	£780
2–3 bedrooms	12,000 kWh	£1,205	£1,130
4+ bedrooms	17,000 kWh	£1,700	£1,615

Although electricity prices can make heat pump running costs slightly higher, opting for green energy tariffs and removing gas standing charges can help reduce expenses.

Long-Term Savings and Environmental Impact

Switching to a heat pump can lead to significant savings, especially for households upgrading from older systems. For instance:

• Replacing an old G-rated gas boiler with an air source heat pump can save up to £290 annually.
• Households moving from outdated electric storage heaters could save as much as £1,200 per year.

Heat pumps draw around 75% of their heat from renewable sources, relying on only 25% electricity. With Scotland’s electricity grid increasingly powered by renewables, the carbon footprint associated with heat pump use continues to decline.

In 2023, over 25,000 heat pumps were installed across Scotland - a 50% increase compared to the previous year. Of these, around 24,000 domestic air source heat pumps have been installed, with an average of 3,000 to 4,000 installations happening annually.

Funding and Incentives

To make heat pumps more accessible, Scottish homeowners can take advantage of several financial support schemes:

• The Home Energy Scotland Grant and Loan scheme offers up to £7,500 in grant funding, with an additional £7,500 available as an interest-free loan. Rural households may qualify for up to £9,000, depending on their circumstances.
• Between 2024 and December 2024, this scheme supported 1,930 installations, providing £15,795,161 in grant funding and £9,039,037 in loan funding.
• The Warmer Homes Scotland programme offers up to £10,000 for eligible households, including private tenants, to cover energy efficiency upgrades such as heat pump installations.
• The ECO4 Scheme Scotland provides additional funding for qualifying households, and a 0% VAT scheme will remain in place until 2027 to further reduce installation costs.

Maintenance costs for heat pumps are relatively low, typically ranging from £100 to £200 annually. Repairs, when needed, cost between £500 and £600, with more extensive fixes reaching up to £2,000.

Heat pumps offer a forward-thinking heating solution for Scottish homes, combining efficiency with the potential for long-term savings and environmental benefits.

2. Gas Boiler

As Scotland transitions towards greener energy solutions, traditional gas boilers remain a key player in the heating landscape, often compared to renewable alternatives. They are still the most commonly used heating systems in the country, offering a dependable and familiar choice for many households.

Initial Installation Costs

When it comes to installation, gas boilers tend to be more budget-friendly than heat pumps. On average, installing a new boiler costs approximately £3,000, though this can vary depending on the type of boiler and specific installation needs.

Here’s a breakdown of typical installation costs:

• Units themselves range from £600 to £3,300.
• Installation fees can add up to £2,000.
• A complete installation, including labour and the unit, averages around £3,800.

These lower upfront costs make gas boilers a more accessible option compared to heat pumps, which often come with higher initial expenses. However, the conversation doesn’t end at installation - operational efficiency and fuel costs also play a big role in the overall picture.

Running Costs and Energy Efficiency

One of the main advantages of gas boilers is the relatively low cost of gas. Currently, gas is priced at about 6.89p per kWh, while electricity costs approximately 27.35p per kWh - nearly four times as expensive. This stark difference in fuel prices has a major impact on annual heating expenses.

For a typical household in Scotland, annual heating costs depend on the efficiency of the boiler:

Boiler Type	Efficiency Rating	Annual Heating Cost
A-rated gas boiler	92%	£831
D-rated gas boiler	85%	£890
Older gas boiler	70%	£1,019

Modern A-rated boilers are highly efficient, converting around 92–93% of gas into usable heat. For a medium-sized home with 2–3 bedrooms, which typically uses about 11,500 kWh of gas annually, heating costs average around £860.

While newer A-rated boilers are slightly cheaper to run than heat pumps, older models come with higher annual costs. These differences in operational efficiency highlight the importance of upgrading outdated systems for long-term savings.

Long-Term Savings and Environmental Impact

Switching from an older, less efficient boiler to a modern A-rated model can significantly reduce heating costs. For instance, upgrading from a 70% efficient boiler to a 92% efficient one could save about £188 annually, based on current gas prices.

However, gas boilers face growing scrutiny over their environmental impact. With the Scottish Government’s ambitious target to eliminate direct emissions from heating buildings by 2045, the future of gas boilers is uncertain. From 1 April 2024, new-build homes in Scotland will no longer be allowed to install gas boilers.

Dr Jan Rosenow from the Regulatory Assistance Project explains, "Heat pumps can deliver cost savings over a gas boiler, but only if the system runs at a good efficiency and because of the grants available. In the future, governments need to rebalance the taxes and levies on electricity to make heat pumps the lowest-cost heating option".

Funding and Incentives

While heat pumps benefit from more substantial government support, there are still some schemes in Scotland that can help households with gas boiler replacements:

• The Home Energy Scotland Grant and Loan provides up to £7,500 for energy efficiency upgrades, including boiler replacements, with an extra £1,500 available for those in rural areas.
• Warmer Homes Scotland offers funding of up to £10,000 or more for eligible homeowners and private tenants to cover various heating improvements.
• The ECO4 Scheme supports households in fuel poverty with heating upgrades and runs until 31 March 2026.

Given that around one in four Scottish households are in fuel poverty, these programmes can make a meaningful difference for those in need.

Gas boilers remain an affordable choice for installation and operation. However, with shifting environmental policies and growing emphasis on renewable energy, their long-term role in Scotland’s heating landscape may require careful consideration.

Advantages and Disadvantages

When deciding on the best heating system for your home, it’s important to weigh the pros and cons of each option. Both heat pumps and gas boilers have their own strengths and weaknesses that can impact your heating costs, comfort, and long-term sustainability.

Heat Pump Benefits and Drawbacks

Heat pumps are known for their exceptional energy efficiency, producing up to 4.5 times the energy they consume. This makes them an environmentally friendly option, with emissions that are 70–85% lower than those from gas boilers.

Another advantage is their longevity. Heat pumps typically last between 20 and 25 years and only need servicing every 3–5 years. In comparison, gas boilers have a shorter lifespan of 10–15 years and require annual servicing .

However, the upfront cost of heat pumps is notably higher. Air source heat pump installations cost around £12,600, though government grants can reduce this to approximately £5,100. Ground source systems are even more expensive, ranging between £15,000 and £25,000.

Running costs for heat pumps depend on electricity prices and the system’s efficiency. Dr Jan Rosenow from the Regulatory Assistance Project notes:

"It is possible to save significant amounts of money in running costs... A household could save more than 50% on running costs with a heat pump compared to a gas boiler. But this requires the heat pump installation to be of high quality, the efficiency of the heat pump to be high and the customer to be on a heat pump tariff".

Gas Boiler Strengths and Limitations

Gas boilers, on the other hand, are a more affordable and familiar option for many households. Installation costs range from £2,000 to £4,000, and the process is usually quicker, taking just 1–2 days compared to the 2–5 days often required for heat pump installations.

Modern condensing gas boilers are fairly efficient, with ratings of 92–94%. Additionally, gas is generally cheaper than electricity, contributing to lower annual heating costs of around £1,068 for gas boiler users.

However, gas boilers come with notable downsides. They emit about 2.2 tonnes (2,200 kg) of CO₂ per household annually and need to be replaced more frequently due to their shorter lifespan. Furthermore, their future is uncertain, as the UK government plans to ban new gas boiler installations in new homes from 2025 and to phase them out entirely by 2035.

Side-by-Side Comparison

Here’s a quick look at how heat pumps and gas boilers compare:

Factor	Heat Pumps	Gas Boilers
Upfront Cost	Air source: ~£12,600 (≈£5,100 after grant); Ground source: £15,000–£25,000	£2,000–£4,000
Annual Running Cost	Around £840	Around £1,068
Efficiency	250–450%	92–94%
Lifespan	20–25 years	10–15 years
Maintenance	Servicing typically every 3–5 years	Annual servicing required
Installation Time	2–5 days	1–2 days
CO₂ Emissions	About 850 kg annually	Approximately 2,200 kg annually
Future Viability	Government target: 600,000 installations annually by 2028	Planned phase-out by 2035

Making the Right Choice

Ultimately, the decision comes down to your priorities. Heat pumps offer long-term benefits such as energy efficiency and lower emissions, but they require a larger initial investment. Gas boilers, while cheaper upfront and quicker to install, face growing regulatory restrictions and may become obsolete as the UK shifts towards cleaner energy solutions.

With renewable electricity now making up 38.2% of the UK’s energy supply as of 2023, heat pumps are becoming an increasingly appealing option both economically and environmentally.

Conclusion

This guide has highlighted the main financial and environmental differences between gas boilers and heat pumps. Gas boilers come with lower upfront costs, but heat pumps stand out for their higher efficiency and longer lifespan.

From an environmental perspective, heat pumps are a cleaner option, generating at least 30% fewer emissions compared to gas boilers, which produce approximately 215 grams of CO₂ per kWh of heat output. For homeowners in Scotland, there’s significant financial support available, including grants of up to £9,000 through Home Energy Scotland, with additional funding options for rural properties.

Regulations are increasingly shifting towards renewable heating solutions. New gas boiler installations are no longer permitted in newly built homes, and the Scottish government aims to cut gas boiler installations by 80% by 2035. With around 24,000 domestic air source heat pumps already installed in Scotland and their proven performance in temperatures as low as –25°C, heat pumps are a reliable and established technology.

It's important to have a professional assessment to determine the best fit for your property, considering factors like insulation, heating needs, and system compatibility. While heat pumps involve a higher initial cost, the combination of government support, greater efficiency, longer lifespan, and regulatory benefits makes them an attractive long-term choice.

Adopting renewable heating is not just a step towards sustainability - it’s an investment that could lead to significant savings over time. Deciding between these systems ultimately comes down to balancing your immediate budget with the long-term benefits of efficiency and environmental responsibility.

FAQs

What are the long-term savings of installing a heat pump compared to a gas boiler, despite the higher upfront cost?

While heat pumps may come with a higher initial price tag compared to gas boilers, they can lead to notable savings over time. Their efficiency is a major factor - heat pumps often generate 3 to 4 times the energy they consume, which translates to much lower running costs. In fact, many UK homeowners report saving hundreds of pounds each year on their energy bills.

What’s more, heat pumps typically need less frequent maintenance, adding to their long-term affordability. Plus, government schemes, like grants for renewable energy systems, can help offset those upfront costs. This combination of financial savings and reduced environmental impact makes heat pumps an excellent option for households aiming to cut both their energy expenses and carbon emissions.

How can government grants and incentives help lower the cost of installing a heat pump in Scotland?

Government grants and incentives are making it easier for homeowners in Scotland to afford heat pump installations. Depending on the specific programme, you could qualify for grants between £8,000 and £15,000, which can help cover a significant portion of the upfront costs.

These initiatives don’t just lower the financial barrier - they also promote the use of energy-efficient and eco-friendly heating systems. By tapping into these schemes, homeowners can reduce their energy bills over time and support Scotland’s efforts towards a more sustainable future.

What do upcoming regulations mean for homeowners with gas boilers?

New regulations in the UK, including the Future Homes Standard, will prohibit the installation of gas boilers in new-build homes starting in 2025. While this doesn’t mean homeowners need to rush to replace their current boilers, it does mark a clear move towards low-carbon heating solutions. For existing homes, gas boilers are expected to remain in use until at least 2035, though future policies might push for greener upgrades.

Switching to renewable heating systems, like heat pumps, could bring long-term advantages. These systems are more energy-efficient and may lower energy bills over time. Plus, government schemes and funding options are available to ease the transition to cleaner, more sustainable heating alternatives.