An air source heat pump that replaces a boiler is a bigger job than air conditioning. It heats your radiators or underfloor heating and your hot water, so the design has to suit the whole house.
This guide covers what we charge, what the price includes, how VAT works, which grant applies to which kind of heat pump and what it might cost to run. One correction to start with: the £7,500 grant is for air-to-water and ground source heat pumps. Air-to-air heat pumps get £2,500, with extra conditions.
What an air-to-water heat pump costs
Our typical price for an air-to-water heat pump in a home is £8,000–£16,000. Homes pay 0% VAT on the installation until 31 March 2027 under HMRC’s VAT Notice 708/6, after which the rate becomes 5%. That figure is before the Boiler Upgrade Scheme grant.
If your home qualifies for the £7,500 grant, it comes off the price, so a £10,000 installation would cost you £2,500. Where you land in the range depends on the heat loss of the house, the size of heat pump it needs, whether a new hot water cylinder is required and how many radiators need upgrading.
What the price should include
A complete heat pump quote should cover:
- a heat loss calculation for the whole house, room by room;
- the heat pump itself, sized from that calculation;
- a hot water cylinder suited to a heat pump, if your current one isn’t;
- any radiator upgrades the design needs to run at lower flow temperatures;
- pipework, controls and the electrical supply;
- commissioning and MCS certification.
If a quote leaves out the cylinder, radiators or electrics, ask why. They’re often needed. We’re MCS certified for heat pump installation; see our air-to-water heat pumps page.
The Boiler Upgrade Scheme
The Boiler Upgrade Scheme runs in England and Wales. It offers:
| Heat pump type | Grant |
|---|---|
| Air source (air-to-water) | £7,500 |
| Ground source | £7,500 |
| Air-to-air | £2,500 |
Until March 2027, an extra £1,500 is available for an air source or ground source heat pump in a home heated by oil or LPG with no mains gas connection. You get one grant per property, hybrid systems with a boiler don’t qualify, and you can’t use the scheme to replace an existing low-carbon system. The installer applies for the grant. GOV.UK’s eligibility page covers who can apply: you must own the property, and most new builds and social housing are excluded.
Want it done properly? AirCon Doctor installs, repairs and services air conditioning and heat pumps across London and the South East, from our base in East Grinstead. We’re an F-Gas certified company and NICEIC approved. Get a fixed-price quote.
The air-to-air grant and its conditions
The £2,500 for air-to-air heat pumps comes with stricter conditions, set out in the 2026 regulations. The system must replace the existing fossil-fuel heating, meet the home’s full heating demand and be installed by an MCS-certified installer. It’s for homes only, and it can’t be added alongside a boiler.
That rules out the common case of adding one or two air conditioning units to a house that keeps its boiler. Most air-to-air systems also don’t heat water, so you’d need another way to do that. Our guide to the air-to-air heat pump grant goes into the detail.
What it might cost to run
Running cost depends on how much heat your home needs and how efficiently the heat pump delivers it. Here’s the sum with stated assumptions:
- Assumed heat demand: 10,000 kWh of heat a year (your heat loss calculation gives the real figure).
- Assumed SCOP: 3, so 10,000 ÷ 3 = about 3,333 kWh of electricity.
- Unit rate: 26.32p per kWh, the Ofgem price cap Direct Debit average for October to December 2026.
- Cost: 3,333 × 26.32p = about £877 a year.
A better-designed system with a higher SCOP, or a cheaper heat pump tariff, lowers that figure. A leaky house or a poorly designed system raises it. To compare with what you pay now, use last year’s gas or oil use from your bills.
Is a heat pump right for your home?
Heat pumps run most efficiently at lower flow temperatures than a typical boiler, so the radiators must be big enough to heat each room at those temperatures. Insulation and draught-proofing help. That’s why we start with a survey and a heat loss calculation, then tell you plainly whether it suits the house.
If you mainly want cooling with some heating in a few rooms, air conditioning is a cheaper route. Our heat pump vs air conditioning guide compares the two.
Quick answers
How much does an air source heat pump cost?
Our typical price for an air-to-water heat pump in a home is £8,000–£16,000 with 0% VAT, before the £7,500 Boiler Upgrade Scheme grant.
Is the grant £7,500 for every heat pump?
No. It’s £7,500 for air-to-water and ground source heat pumps, and £2,500 for air-to-air heat pumps with extra conditions.
Who applies for the Boiler Upgrade Scheme grant?
The MCS-certified installer applies, and the grant is taken off your price.
When does 0% VAT on heat pumps end?
HMRC’s zero rate for homes runs until 31 March 2027. From 1 April 2027 it becomes 5%.
Related services
More advice
- Heat Pump vs Air Conditioning: What’s the Difference?
- The £2,500 Boiler Upgrade Scheme Grant for Air-to-Air Heat Pumps
- 0% VAT on Air Conditioning and Heat Pumps: What HMRC Says
- Air Conditioning in Winter: Using Heat Pump Mode Effectively
- How Much Does It Cost to Run Air Conditioning in the UK? 2026 Guide
- All advice
This guide is general information, checked against the sources linked on 30 October 2026. It isn’t legal, tax or financial advice. Rules, grants and product ranges change, so check the current position before you rely on it.