Are heat pump prices going up or down?

The general trend is downward. Expect 10-20% reductions over the next five years, not dramatic overnight drops.

Will Heat Pump Prices Drop in the UK?

Q: Will heat pump prices drop in 2026 or 2027?

Minor reductions of 5-10% are possible over 1-2 years from increasing competition. Significant drops (20%+) are unlikely until manufacturing scale increases materially, expected around 2028-2030.

Q: Should I wait for cheaper heat pumps?

For most homeowners, no. The BUS grant available today (£7,500, or £9,000 for homes without mains gas replacing oil or LPG until 31 March 2027) is worth more than the likely price drop. Annual savings you forgo by waiting also add up.

Q: Will the BUS grant increase further?

The grant was increased from £5,000 to £7,500, and from 21 July 2026 to 31 March 2027 homes without mains gas replacing oil or LPG can get £9,000. Funding is confirmed to 2029/30, but grant levels can change, so check GOV.UK before you apply.

Q: Will heat pumps ever cost the same as a gas boiler?

Unlikely at headline price. A heat pump is more complex. But after grants, the cost difference is already small (£1,000-£3,000).

Heat pump prices are expected to fall as the market scales, but government figures show the median installed price of an air source heat pump has been broadly flat over the past year (about £13,000 in 2025 Q3 and £12,908 in 2026 Q2, DESNZ). Waiting for cheaper prices could cost you more than acting now: grant levels can change (the £7,500 BUS grant, or £9,000 for off-gas homes replacing oil or LPG until 31 March 2027), and every year you delay is another year on your current heating system.

By Home Heat Pump Guide Published: 18 March 2026 13 min read

UK couple researching whether to wait for heat pump prices to drop or act now with the BUS grant — The key question is not whether prices will fall, but whether waiting will save or cost you money overall

For current prices, see our heat pump cost guide.

See what a heat pump costs today with the £7,500 grant

Get your current cost estimate

Compare today's cost (with grant) against projected future costs (without grant).

Current Heat Pump Prices

£10,000-£14,000Before grant (3-bed semi)

£2,500-£6,500After BUS grant

Prices have already fallen from 2022-2023 peaks but remain roughly 3-4x the cost of a gas boiler installation.

What Makes Heat Pumps Expensive

The heat pump unit (30-40% of cost), installation labour (30-40%), and ancillary components (20-30%). Labour costs are elevated due to a shortage of trained MCS installers. See our analysis of why heat pumps are so expensive.

Factors Bringing Prices Down

Heat pump installer arriving at UK home representing growing installer workforce and increasing competition — More trained installers entering the market means more competition and lower labour costs over time

Factor	Expected Impact	Timeline
Manufacturing scale	10-20% unit cost reduction	3-5 years
R290 propane refrigerant	Lower unit + install cost	2-4 years
More installers	10-15% labour cost reduction	3-5 years
Standardisation	Reduced installation time	2-4 years
Asian manufacturer competition	20-40% lower unit prices	Already happening

Factors That Could Keep Prices High

Demand outpacing supply, regulatory compliance costs, raw material prices (copper, rare earth metals), general wage inflation, and potential grant reduction. If the BUS grant is reduced while prices fall, the net effect on homeowners could be neutral or negative.

Realistic Price Trajectory

Projected Installation Cost: 3-Bed Semi (Before Grant)

2026 (current)£10,000-£14,000

2028-2030£8,000-£11,000

2030-2035£7,000-£10,000

A meaningful reduction, but not transformational. And the grant may not be available at the same level.

UK homeowner reviewing heat pump cost projections to decide whether to wait or install now — The maths often favours acting now: today's grant plus years of savings outweighs projected future price drops

Request a heat pump quote at today's prices

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Should You Wait or Act Now?

Act NowBUS grant available, boiler nearing end of life, using oil/LPG/electric

Consider WaitingBoiler only 3-5 years old, planning major renovations soon

A potential 10-20% price drop over five years saves ~£1,000-£2,500. But five years of running cost savings adds up too: from gas these are small at current price cap rates (roughly £10-£150 a year, plus about £108 a year if you remove the gas supply), but from oil or electric heating they are typically several hundred pounds a year or more. And grant levels may change: BUS funding is confirmed to 2029/30, but the £9,000 off-gas uplift ends on 31 March 2027. The bird in the hand usually wins.

What About Running Cost Trends?

Higher COPs in next-generation heat pumps, smarter TOU tariffs, energy levy rebalancing, and solar panel integration all point towards heat pump running costs decreasing relative to fossil fuels. This improves the financial case regardless of what happens to installation prices. See our running costs guide and our analysis of whether heat pumps are worth it.

UK home with heat pump installed in spring garden representing a sound long-term investment decision — Installing while the grant is available positions you to benefit from both the subsidy and improving running economics

Air source heat pump installed at UK semi representing current best-value installation with BUS grant — Current installations with the £7,500 BUS grant represent strong value -- future price drops may not match today's subsidy

Frequently Asked Questions

Will heat pump prices drop in 2026 or 2027?

Minor reductions of 5-10% are possible. Significant drops (20%+) are unlikely until 2028-2030.

Should I wait for cheaper heat pumps?

For most homeowners, no. The £7,500 BUS grant today (£9,000 for off-gas homes replacing oil or LPG, until 31 March 2027) is worth more than likely price drops. Annual savings forgone also add up.

Are prices going up or down?

Down. Expect 10-20% over five years, not dramatic overnight drops.

Will the BUS grant increase further?

From 21 July 2026 to 31 March 2027, homes without mains gas replacing oil or LPG can get £9,000. Funding is confirmed to 2029/30, but grant levels can change.

Will heat pumps ever cost the same as a gas boiler?

Unlikely at headline price. But after grants, the gap is already small (£1,000-£3,000).

See today's price with the grant -- before it changes

Calculate your cost now

BUS funding is confirmed to 2029/30, but grant levels can change.

About this guide: This article analyses future heat pump price trends to help UK homeowners decide when to invest. The BUS grant currently offsets most of the cost premium over gas boilers. For properties also considering solar panels, both technologies are following similar cost-reduction trajectories driven by manufacturing scale and policy support.