Heat Pump Cost Comparison Table: All Heating Systems

Choosing a heating system is one of the biggest financial decisions you will make for your home. But comparing systems fairly is difficult when every source uses different assumptions, different property sizes, and different energy prices. This guide puts every major UK heating system side by side — using the same property, the same assumptions, and the same methodology — so you can make a genuinely informed comparison.

We compare air source heat pumps (ASHP), ground source heat pumps (GSHP), gas boilers, oil boilers, LPG boilers, and direct electric heating across installation cost, annual running cost, maintenance cost, and total lifetime cost.

Our Baseline Property and Assumptions

All comparisons use the same baseline:

Property: Three-bedroom semi-detached house, 95m2, reasonably insulated
Annual heat demand: 12,000 kWh (space heating and hot water)
Energy prices (Ofgem cap / market rates, early 2026):
- Gas: 6.76p/kWh
- Electricity: 24.50p/kWh
- Oil (kerosene): 7.50p/kWh
- LPG: 9.50p/kWh
Annual energy price inflation: 3%
Comparison period: 20 years

Installation Cost Comparison

Air Source Heat Pump (ASHP)

Total cost: £10,000 to £14,000
After BUS grant (£7,500): £2,500 to £6,500
Typical mid-point after grant: £4,500

Includes the heat pump unit, hot water cylinder, controls, pipework, radiator upgrades (if needed), and installation labour. Full breakdown in our heat pump cost guide.

Ground Source Heat Pump (GSHP)

Total cost: £20,000 to £35,000
After BUS grant (£7,500): £12,500 to £27,500
Typical mid-point after grant: £18,000

The higher cost comes from the ground loop — either boreholes (typically £10,000 to £18,000) or horizontal trenches (£5,000 to £10,000). The heat pump unit itself costs similar to an ASHP. See our ground source guide for details.

Gas Boiler

Total cost: £2,500 to £4,500
Typical mid-point: £3,200

A mid-range combi boiler installed. No grant available.

Oil Boiler

Total cost: £3,500 to £6,000
Typical mid-point: £4,500

Includes the boiler, oil tank (if new), flue, and installation. Oil systems cost more than gas due to the tank and more complex installation.

LPG Boiler

Total cost: £3,000 to £5,000
Typical mid-point: £3,800

Similar to a gas boiler but with LPG tank costs (often provided by the supplier on a rental basis).

Direct Electric Heating

Total cost: £2,000 to £5,000
Typical mid-point: £3,000

Storage heaters or panel heaters throughout the home. Cheapest to install but most expensive to run.

Annual Running Cost Comparison

Based on 12,000 kWh annual heat demand:

Air Source Heat Pump

Efficiency: COP 3.0
Electricity consumed: 4,000 kWh
Annual cost (standard rate): £980
Annual cost (TOU tariff, 18p blended): £720

Ground Source Heat Pump

Efficiency: COP 3.8 (higher than ASHP due to stable ground temperatures)
Electricity consumed: 3,158 kWh
Annual cost (standard rate): £774
Annual cost (TOU tariff, 18p blended): £568

Gas Boiler

Efficiency: 92%
Gas consumed: 13,043 kWh
Annual fuel cost: £882
Gas standing charge: £117
Total annual cost: £999

Oil Boiler

Efficiency: 88%
Oil consumed: 13,636 kWh (approximately 1,350 litres)
Annual cost: £1,023

LPG Boiler

Efficiency: 90%
LPG consumed: 13,333 kWh
Annual cost: £1,267

Direct Electric Heating

Efficiency: COP 1.0 (100%)
Electricity consumed: 12,000 kWh
Annual cost (standard rate): £2,940
Annual cost (Economy 7 blended 17.4p): £2,088

For detailed running cost analysis, see our running costs guide.

Annual Maintenance Cost Comparison

ASHP: £130 to £180 per year (annual service plus averaged repair costs)
GSHP: £100 to £150 per year (fewer moving parts than ASHP, no outdoor fan)
Gas boiler: £150 to £200 per year (annual service legally required for landlords, more repair-prone components)
Oil boiler: £180 to £250 per year (annual service, more expensive parts, oil tank maintenance)
LPG boiler: £150 to £200 per year (similar to gas)
Direct electric: £0 to £50 per year (virtually no maintenance, no moving parts)

System Lifespan and Replacement Costs

ASHP: 20 to 25 years. One potential compressor replacement (£2,000-£3,000) towards end of life
GSHP: 20 to 25 years for the heat pump unit. Ground loop lasts 50+ years. Lower replacement cost long-term
Gas boiler: 12 to 15 years. One replacement needed within 20-year period (£3,000-£4,000 at future prices)
Oil boiler: 15 to 20 years. Tank may also need replacement (£1,500-£2,500). One boiler replacement likely within 20 years
LPG boiler: 12 to 15 years. Similar to gas — one replacement needed
Direct electric: 15 to 20 years for storage heaters. Replacements are cheap (£200-£400 per heater)

20-Year Total Cost Comparison

Here is the complete 20-year cost for each system, including installation, running costs (with 3% annual inflation), maintenance, and replacement costs.

With BUS Grant, ASHP on Standard Tariff

ASHP: £38,180 (Install £4,500 + Running £26,330 + Maintenance £3,100 + Compressor £4,250)
GSHP: £39,500 (Install £18,000 + Running £20,800 + Maintenance £2,500 + Compressor £3,200 - offset by ground loop longevity savings)
Gas boiler: £38,350 (Install £3,200 + Running £26,850 + Maintenance £3,500 + Replacement £4,800)
Oil boiler: £41,600 (Install £4,500 + Running £27,500 + Maintenance £4,300 + Replacement £5,300)
LPG boiler: £48,200 (Install £3,800 + Running £34,050 + Maintenance £3,500 + Replacement £4,800 + Tank £2,050)
Direct electric: £82,500 (Install £3,000 + Running £75,500 + Maintenance £500 + Replacement £3,500)

With BUS Grant, ASHP on TOU Tariff (18p Blended)

ASHP: £31,200
GSHP: £33,800
Gas boiler: £38,350
Oil boiler: £41,600
LPG boiler: £48,200
Direct electric: £82,500

With a TOU tariff, both ASHP and GSHP become clearly the cheapest options over 20 years. Even at standard rates, ASHP is competitive with gas and significantly cheaper than oil, LPG, or direct electric.

Which System Wins for Each Scenario?

Lowest Upfront Cost

Winner: Direct electric heating (£3,000) — but by far the most expensive to run. If considering ongoing costs, gas boiler (£3,200) offers the best balance of low upfront cost and moderate running costs.

Lowest Running Costs

Winner: Ground source heat pump (£774/year at standard rates, £568 with TOU tariff). ASHP is close behind. Both beat gas on a TOU tariff.

Lowest 20-Year Total Cost

Winner: ASHP with BUS grant and TOU tariff (£31,200). GSHP is second at £33,800. Without the grant, gas is cheapest at £38,350.

Best for Off-Gas Properties

Winner: ASHP. Dramatically cheaper than oil, LPG, or electric over 20 years. If the property has sufficient land, GSHP is even better but at a higher initial cost.

Best for Minimum Hassle

Winner: Gas boiler (for on-gas properties) or ASHP (for off-gas). Both are proven, well-supported technologies with large installer networks.

For a personalised comparison based on your property, try our cost calculator.

Important Caveats

No comparison is perfect. These figures are based on specific assumptions that may not match your situation:

Energy prices change: Gas and oil prices are volatile. A 20% rise in gas prices makes gas boilers significantly more expensive; a 20% rise in electricity prices hits heat pumps harder
COP varies by installation: A poorly installed ASHP achieving COP 2.3 costs 30% more to run than our assumed COP 3.0. Installation quality is critical
Property differences matter: A large detached house has proportionally higher costs for all systems, but the relative comparison stays broadly similar
Policy changes: Future carbon taxes, energy levy rebalancing, or changes to the BUS grant could shift the economics significantly
Oil prices are the most volatile: Oil heating costs could be 30% higher or lower than our assumptions in any given year

For a broader assessment beyond pure cost, including environmental impact, comfort, and future-proofing, see our are heat pumps worth it guide and our heat pump vs gas boiler comparison.

Frequently Asked Questions

What is the cheapest heating system to run in the UK?

Ground source heat pumps have the lowest running costs, followed closely by air source heat pumps. Both beat gas at standard electricity rates and significantly beat gas on a time-of-use tariff. Gas is the cheapest fossil fuel to run. Direct electric is by far the most expensive.

Is a heat pump cheaper than gas over 20 years?

With the BUS grant and a standard electricity tariff, the 20-year cost is roughly equal. With a time-of-use tariff, the heat pump saves approximately £7,000 over 20 years. Without the grant, gas is cheaper on total cost alone at current energy prices.

Should I choose air source or ground source?

ASHP is the right choice for most UK homes. Lower installation cost, simpler installation, and no garden disruption. GSHP makes sense if you have ample land, want maximum efficiency, or plan to stay in the property for decades (the ground loop lasts 50+ years). Our ground source guide compares them in detail.

What about hydrogen boilers?

Hydrogen boilers are not included in this comparison because they are not commercially available for home heating in the UK. No hydrogen grid exists, costs are unknown, and the government's hydrogen village trial was cancelled. They remain a theoretical option with no verifiable cost data.

How accurate are these cost comparisons?

The figures are based on current energy prices, typical installation costs, and standard efficiency assumptions. They represent a reasonable mid-point scenario. Your actual costs could be 10-20% higher or lower depending on your specific property, installation quality, energy tariff, and usage patterns. Use our calculator for a property-specific estimate.

Does the comparison change for larger or smaller properties?

The absolute costs scale with property size, but the relative ranking stays similar. Larger properties see bigger absolute savings from heat pumps (more kWh of demand means more pounds saved per year). Smaller properties have shorter payback periods because the fixed installation cost is lower.