How much does heat pump installation cost?

If you’re exploring renewable heating options for your home, you’ve probably thought, “how much does heat pump installation cost?”

Heat pumps are highly efficient, low-carbon systems that offer excellent long-term savings. But it’s important to understand the full picture of costs upfront so you can plan properly and make the right decision for your home and budget.

To help you make the right choice, let’s break down the costs of installing both air source and ground source (geothermal) heat pumps, explore the factors that influence pricing and show how financial support can make the switch more affordable than you might expect.

Average heat pump installation costs in the UK

Let’s begin with a rough idea of what you can expect to pay for a professionally installed heat pump system.

• Air source heat pumps: Including VAT, labour costs and depending on the work required, you could expect to pay around £14k depending on the work required.
• Ground source (geothermal): The price of geothermal heating systems vary greatly as they depend upon the specifications and requirements of the property, ranging from £18k up to potentially £50k.

These figures include the cost of the heat pump unit, labour and necessary upgrades to radiators or pipework. Prices can vary depending on the size of your home, the complexity of installation and the level of insulation.

Key factors that affect heat pump installation costs

A few key factors will shape the overall cost of your heat pump installation.

• Property size and heat demand: Larger homes typically require larger or more advanced systems to meet demand, so the size and layout of your property plays a big role.
• Insulation levels: A well-insulated home retains heat more effectively, which can reduce the size (and cost) of the system needed. We always carry out a detailed heat loss survey to check suitability and recommend improvements if needed.
• Existing heating system: Switching from oil or LPG is usually more straightforward than replacing an older gas boiler. Some homes may also need radiator upgrades or underfloor heating added to maximise efficiency.
• Ground conditions (for geothermal): For ground-source systems, the cost depends on whether vertical or horizontal loop installations are used. Vertical boreholes require specialist drilling equipment, which adds to the cost but is often essential for homes with limited outside space.

The Boiler Upgrade Scheme - knocking an extra £7500 off

To make renewable heating more accessible, the UK government offers generous support through the Boiler Upgrade Scheme (BUS). This scheme provides £7,500 toward a ground-source heat pump or air-source heat pump, and is applied upfront to help bring the cost of installation down significantly. Many installation specialists manage the grant process for you, making the switch as easy and affordable as possible.

Cost vs. savings for long-term heat pump value

While heat pumps involve a higher upfront investment compared to traditional gas boilers, they offer excellent long-term value. Heat pumps are highly efficient, often delivering over 300% efficiency, meaning 1kWh of electricity generates 3kWh of heat. Pairing your system with solar and battery storage can also drive down your energy bills even further. And with smart tariff integration, you can take advantage of cheaper overnight electricity to reduce running costs. When designed well, many homeowners see a return on investment over the life of the system, especially as energy prices continue to rise.

Start your journey to long-term sustainability

So, how much does heat pump installation cost? It depends, but with support from government grants and a properly tailored system, renewable heating is within reach for many UK homeowners. Whether you’re looking at air source or ground source, the investment brings long-term comfort and a meaningful step toward lower carbon living.

At Oakray, we don’t believe in guesswork or one-size-fits-all estimates. Our process starts with a detailed consultation and heat loss survey, so you get a system that’s perfectly matched to your home. We work with leading heat pump brands like Valliant and Hisense, and we design each installation to maximise performance and minimise lifetime costs.

If you’re considering a heat pump and want to explore your options, download our product brochure below to find out more.