Return On Investment For Air Source Heat Pumps

Last Updated on July 7, 2025

As the UK pushes toward net zero, air source heat pumps have emerged as one of the most popular low-carbon heating solutions for homes and businesses. 

But with installation costs ranging from £7,000 to £13,000 on average, many homeowners and landlords are rightly asking: what is the real return on investment (ROI) for air source heat pumps? 

This guide answers that question in detail backed by UK-based statistics and government resources.

How Long Does It Take for an Air Source Heat Pump to Pay for Itself?

The typical payback period for an air source heat pump in the UK ranges from 6 to 12 years, depending on multiple variables such as:

• Fuel type replaced: Replacing electric, LPG or oil boilers generally results in a faster ROI compared to gas.
  
• Home insulation levels: Well-insulated homes maximise energy savings.
  
• System size and design: Properly sized systems operate more efficiently.
  
• Occupant behaviour: Households using consistent, lower flow temperatures see better performance.
  
• Government support: Grants such as the Boiler Upgrade Scheme can cut thousands off upfront costs.

According to Energy Saving Trust, homeowners switching from an old G-rated gas boiler to an air source heat pump could save up to £340 per year, while those switching from oil heating could save as much as £1,100 annually.

How Much Can You Save Annually with an Air Source Heat Pump?

Savings vary by property and energy usage, but here’s a general breakdown based on current 2024 data from Ofgem:

Not only can you reduce your heating bills, but many homeowners also benefit from lower maintenance costs, as heat pumps require less upkeep than traditional boilers.

Is the ROI Higher for Landlords and Commercial Properties?

Absolutely. For landlords and businesses, ROI is often tied to:

• Energy cost savings across multiple units
  
• Tax incentives and capital allowances
  
• Meeting decarbonisation targets
  
• Improved EPC ratings to meet legal lettings requirements
  

Under the UK’s Future Homes Standard, gas boilers will no longer be installed in new homes by 2025. 

This creates a future-proofing incentive for landlords and developers. Furthermore, Enhanced Capital Allowances (ECAs) may apply for commercial systems, boosting the financial case.

What Affects the Long-Term ROI of an Air Source Heat Pump?

ROI is not static—it evolves over time based on:

• Energy price fluctuations: As gas becomes more expensive, electric-powered systems like heat pumps become increasingly cost-effective.
  
• System lifespan: Air source heat pumps typically last 15–20 years with proper maintenance.
  
• Performance Coefficient (COP): Higher COP = more heat output per kWh used. A COP of 3.5 means the system delivers 3.5 kWh of heat for every 1 kWh of electricity consumed.

Increased renewable electricity generation across the UK grid also means that heat pumps are getting greener every year—another long-term ROI benefit.

How Can You Maximise the ROI of Your Air Source Heat Pump?

Here are a few ways to boost your heat pump’s return on investment:

Use smart thermostats and controls for more efficient temperature regulation
Combine with solar panels to offset electricity costs
Invest in high-quality insulation to retain heat
Choose an MCS-certified installer to ensure optimal performance and compliance with grant schemes.

Is an Air Source Heat Pump Worth It in the UK Climate?

Yes. Despite the UK’s cooler winters, modern air source heat pumps work efficiently even in temperatures as low as -15°C. The key lies in proper system sizing, design, and installation.

Ofgem highlights that performance testing for cold weather operation is a requirement for heat pumps funded under the BUS scheme. This ensures long-term suitability for UK weather conditions.

Are There Environmental ROI Benefits?

Beyond financial savings, switching to an air source heat pump drastically reduces your home’s carbon footprint. According to Gov.uk, replacing an old oil boiler with a heat pump can cut CO₂ emissions by up to 65%.

If you’re looking to contribute to the UK’s net zero by 2050 targets while saving money, this is one of the most impactful changes you can make as a homeowner or landlord.

What Government Incentives Are Available to Improve ROI?

To make air source heat pumps more accessible, the UK government offers a £7,500 upfront grant through the Boiler Upgrade Scheme (BUS). This applies to homeowners and small landlords in England and Wales and helps significantly reduce the payback period.

In Scotland, homeowners can access Home Energy Scotland grants and loans of up to £15,000.

These grants dramatically improve your return on investment by reducing capital outlay and lowering ongoing energy bills.

Does Air Source Heat Pump Installation Increase Property Value?

Yes. Energy-efficient upgrades can boost property value and appeal to eco-conscious buyers. According to a study by Rightmove, properties with an EPC rating improvement from D to C saw an average price increase of £11,000.

An air source heat pump is considered a long-term energy improvement and may positively affect your Energy Performance Certificate (EPC) rating—a key selling point for both homebuyers and landlords aiming to meet Minimum Energy Efficiency Standards (MEES) for rentals.

Ready to See Your Return? Get a Free Air Source Heat Pump Quote

Discover How Much You Could Save with Eco Happy

Whether you’re a homeowner upgrading your heating system or a landlord looking to future-proof your properties, Eco Happy can help you maximise your return on investment. Our expert team will:

• Provide a personalised quote
  
• Help you apply for government grants
  
• Ensure you get the most efficient system for your property
  

Don’t wait years to start saving, request your free quote today and take the first step towards smarter, greener heating.