23-04-2025
Heat pumps are about to get cheaper. Here's why
Heat pumps and electric vehicle chargers will be sold 'smart' ready, potentially saving households thousands of pounds, the UK government has said.
New regulations mean heat pumps - a greener alternative to gas boilers - must now be sold with 'smart' features, allowing customers to benefit from using energy at cheaper times.
Heat pumps use electricity to draw heat from the air or ground to warm homes and provide hot water. Along with switching motorists from petrol cars to electric, they are seen as a key technology in cutting climate emissions from homes.
It is hoped the move will save consumers money and help the UK government comply with net-zero targets up until 2050.
report published last year by the Energy Crisis Commission (ECC) which highlighted the UK's vulnerability to future energy crises, particularly due to its heavy reliance on gas.
Heat pumps work by transferring and intensifying heat from the outside air, ground or water into a building.
They are a greener and cleaner way to heat your home: it is estimated that, for every unit of electricity used, homeowners can get three to four times as much heat in return compared to that of a gas or oil boiler, according to the Energy Saving Trust (EST).
They can significantly reduce a property's energy demand and are becoming more popular, especially for developers building new homes.
Despite this, perceptions around their cost is proving to be a barrier to their uptake.
According to a poll in April, a majority of people (56%) thought that heat pumps were too expensive for most people, with less than a fifth (19%) thinking they were accessible to everyone.
The Microgeneration Certification Scheme (MCS) revealed there were almost 60,000 certified installations of heat pumps in 2024, with 275,000 estimated to be in use in the UK.
Installation can be expensive - the National Infrastructure Commission (NIC) estimates that air source heat pumps, the most common type, cost £10,000 more than a gas boiler on average.
Cost differs on many factors such as the size of your home, the type of heat pump (air, ground or water) installed and the ease-of-installation, ranging from £3,000 to £18,000.
In an attempt to lower the UK's carbon footprint, government grants offer up to £7,500 to install them, with some companies offering installation as low as £500 in conjunction with this grant.
The amount of money saved in comparison to a gas boiler will depend on the type of heat pump being installed but last year, the EST stated customers can expect to save up to £50-£440 per year on heating bills by replacing an old gas boiler with a ground source heat pump.
The UK government say that the new requirements for heat pumps to be sold smart-ready could save homeowners an additional £100 per year compared to the costs of a gas boiler.
The latest government announcement follows regulations, implemented on 30 June 2022, which mean EV chargers must have smart meter functionality.
The regulations state that charge points sold for the 'Intended private charging of vehicles' must allow for the charge point to retain smart functionality even if the owner switches electricity supplier.
Customers can, of course, opt to not use smart functions, but practically this allows users to monitor their spending and switch energy companies easier to find the best rate.
Smart functionality also allows motorists to plug in their car and control the charge from anywhere, making the most of using energy at the cheapest rates.
Often energy-use is optimised based on things like the time of day (night time often being cheaper), electricity prices, and an EV's battery percentage.
The EST say smart charging at home overnight could save users up to 20 per cent on EV charging costs, depending on your tariff, mileage, and charging patterns.
The DESNZ added that households already charging its EV overnight using a 'smart' time-of-use tariff can expect to save around £332 a year.
A European study by Eurelectric, the federation of the European electricity industry whose members includes European energy providers, found that utilising smart and bidirectional charging technologies can save motorists between €450 ($485) and €2,900 annually.
Despite saving money on running costs, EVs are still an expensive initial investment with the average electric car often costing between 20-40 percent more than a petrol equivalent.
After the initial cost the charging at home can be significantly cheaper than filling up with petrol or diesel, especially with competing energy tariffs.
But EVs are becoming more expensive as road tax regulations will change this month and prices of electricity also rising in the last year.
As the UK works towards its ambitious 2050 net-zero targets the ECC report identified a need for a more resilient energy system, and a faster transition to low-carbon energy sources.
The measures form part of the government's Clean Power Action Plan, which sets out pro-consumer reforms aiming to secure lower energy bills for Brits with £40bn of investment.
The plan, outlined by secretary of State for Energy and Climate Change, Ed Miliband, aims to upscale home-grown energy generation and improve energy efficiency.
By using more clean electricity, Miliband hopes the UK will become more resistant to international fuel price shocks, similar to those experienced when Russia invaded Ukraine in 2022 and after. Miliband said: 'The clean power sprint is the national security, economic security, and social justice fight of our time – and this plan gives us the tools we need to win this fight for the British people.'
As of January 2024, heat pumps at 400 percent efficiency generated the lowest amount of emissions of direct electric heating in the United Kingdom
The Climate Change Committee (CCC) has emphasised that installing heat pumps in 50 percent of homes by 2040 will be required to limit emissions and achieve legally-binding 2050 targets.
The CCC provides independent advice on how much carbon the UK should emit over five-year periods, up to 2050, with Net Zero the target.
The new regulations for heat devices would apply to hydronic heat pumps, storage heaters, heat batteries, standalone direct electric hot water cylinders, hot water heat pumps and hybrid heat pumps, all up to a thermal capacity of 45kW.
The Government said it planned to put forward secondary legislation on energy smart appliances within a year and allow a 20-month period for manufacturers to update production, before the regulations will be enforced.
Energy minister Michael Shanks said: 'We want to put more money in people's pockets as part of our Plan for Change by making it easier for people to benefit from cheaper off-peak tariffs in their home.
'These new standards will also bring a common sense approach to smart appliances by ensuring different brands and models can operate across different energy suppliers, allowing consumers to shop around for the best deals.'
