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Air Source Heat Pump Costs: How Much Is It to Install and Run an ASHP?

how much does a daikin air source heat pump cost?
(Image credit: Daikin)

How much does an air source heat pump cost? It's a question that's more complicated than you think. Of course, this guide will outline the average costs of an air source heat pump system, plus what you can expect to pay to install it in your home, but to make a heat pump viable for your home, there's likely to be some extra expenditure required. 

With air source heat pumps requiring adequate insulation and airtightness levels, you may find that getting your home's fabric to the required standard for a heat pump costs more than the system itself. 

While air source heat pumps are relatively expensive systems, there's good news on the horizon. Not only are there grants available for air source heat pumps, but with the UK government putting a growing emphasis on the technology as the successor to gas boilers, in time it's likely air source heat pump costs will fall. 

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How Much Does an Air Source Heat Pump Cost?

A basic air source heat pump costs from £1,600 for a small air source mono block unit to around £14,000 for a top end large capacity fan unit. 

More expensive air source heat pumps can have higher quality components and software for monitoring heat pump operation, while more expensive alloys are also often used in the construction of the cases and components. 

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How Much Does Installing an Air Source Heat Pump Cost?

The cost of installing an air source heat pump will depend on the complexity of the install, alongside factors such as the distance from the heat pump unit. Additional acoustic housings may also be required, which can also increase your installation bill. 

Larger properties may also need a bigger heat pump, or even more than one unit, which can in turn require a hydraulic design which is more complex. 

While a fully installed air source heat pump cost is hard to estimate for these reasons, this basic formula offers a best guess calculation:

  • Use £6,000 as a base cost. 
  • Add £750 per kW to the price (or £1000 per kW for some top end European heat pumps.) 

As an example, a 10kW heat pump will cost £6,000 plus £7,500 (10kW x £750), which gives an overall installation cost of £13,500.

You can expect the cost of installing an air source heat pump in a new or self build to be upwards from £11,000

Putting the costs into real context is not easy but the following costs (made up of the system cost and installation) can be used for guidance:

What Other Costs Should I Consider When Installing an Air Source Heat Pump?

A recent government report found that installation of an air source heat pump in an existing property can run upwards of £27,000

Air source heat pumps are at their most efficient at low flow temperatures, which are slow to react in heating systems. This means that high insulation levels are also required for these systems to heat your home efficiently. 

The levels of insulation and airtightness are often not optimised in older properties. This would cause the heat pump to operate at increased flow temperatures, resulting in lower efficiency and higher running costs. This will mean added cost in remedying these immediate fabric issues before installing an air source heat pump. 

An air source heat pump installed outside of a home

(Image credit: Panasonic Heating & Cooling Solutions)

The cost of installing an air source heat pump system will also be complicated by the difficulty and disruption involved in running new pipework. 

This pipework will need to run from the outdoor fan unit to the hot water cylinder, which may be in a cupboard upstairs, as well as to the central heating distribution, which may be located near the existing boiler rather than conveniently placed near the proposed location of the heat pump unit. 

If you are switching over from an electrical off-peak storage heater system then you will need to consider the cost of a complete wet radiator system. 

Even if you do have an existing wet radiator system, if the emitters (radiators or underfloor heating) are too small, you may need to upgrade the size to accommodate the low flow temperatures.

(MORE: Heating: Beginner's Guide)

There may also be a cost in removing the existing boiler. In the case of oil or LPG, the removal of fuel storage tanks, concrete base and fuel pipework will need to be factored in. 

Are There Any Grants Available to Offset Air Source Heat Pump Costs?

The Renewable Heat Incentive is a government scheme that pays for the generation of renewable heat. All MCS registered air source heat pump installations are potentially eligible for payments in compliant properties for seven years, paid quarterly. 

The current domestic RHI tariff for an air source heat pump is 10.85p/kWh  (capped at 20000kWh per year). 

While the Renewable Heat Incentive will conclude in March 2022, it will be replaced by the Clean Heat Grant. Under this scheme, eligible homeowners may be able to claim up to £4,000 to the costs of renewable home heating technology, including air source heat pumps, which will most likely come in the form of a voucher. 

a vitocal a-100 heat pump outside of a home

Viessmann's Vitocal A-100 air source heat pump.  (Image credit: Viessmann)

How Much Does an Air Source Heat Pump Cost to Run?

The cost of a unit of electricity is around 15p per kWh and the average efficiency of an air source heat pump is 220% to 320%. 

In a property that has an annual heat load of 15000kWh, you would expect the electric use to be somewhere between 6850kWh and 4700kWh, which is an annual running cost of between £700 and £1,050.

These are the average costs of using different heating fuels in order to compare with the running costs of air source heat pumps:

  • Oil: between £500 and £1,250 per year.
  • LPG: between £825 and £1,320 per year.
  • Natural gas: between £660 and £825 per year.

 A ground source heat pump costs between £540 and £700 per year to run. 

(MORE: What Type of Heat Pump is Right for Your Project?)

The efficiency of an air source heat pump is also dependent on factors beyond the fabric of your home. The renewable heat produced comes from the ambient air, so as the air around the unit cools down the efficiency will drop. 

When it gets closer to zero degrees outside, the air source heat pump will also need to perform a defrost cycle more often and this will also lower the efficiency. 

Also, if not commissioned properly, an air source heat pump could turn direct electric heaters on when they are not actually required, resulting in high electricity bills.

Campaigners are asking the government to reduce the environmental levy on electricity with a looming ban on new gas boilers, to help ensure that an air source heat pump never costs more than a gas boiler to run. 

an air source heat pump on the side of a home

(Image credit: Daikin)

How Much Does an Air Source Heat Pump Cost to Maintain?

Air source heat pumps require ongoing visual inspections by their owners, looking at pipework for leaks, corrosion and breached insulation.

Annual inspections by an engineer could include deeper inspections for signs of leaks and corrosion, as well as checking pressure meters and the levels of anti freeze and inhibitors in the pipe loops. They may also check the controller settings and clean (or change) any filters, de-aerators and sensor pockets. 

An annual service contract can range in cost from  £10 - £40 a month, depending on the complexity of the system, the items that are included and the proximity of a suitable engineer. Any breakdowns will be diagnosed and costed on a job-by-job basis. 

If there is a compressor failure or heat exchanger fracture then the heat pump could be written off as an uneconomical repair.

How Long Do Air Source Heat Pumps Last?

Air source heat pumps have an average life expectancy of around 15 years.

However, the compressors often have a 10-year guarantee and, if compared with similar technologies such as fridges, then a well-serviced and maintained air source heat pump could last up to 20 years.  

David is an expert in sustainable building and energy efficiency and is also director of Heat and Energy Ltd.