Replacing a gas boiler with a heat pump could help consumers save an average of £429 a year on their energy bill and boost the value of the average home in England by as much as £7,000, according to new research.
The analysis by WPI Strategy for HomeServe stated that consumer demand for heat pumps is flatlining due to the benefits of switching being communicated primarily through an environmental prism. The report said the government and industry should reframe the arguments so that they focus on the immediate financial benefits, such as lower energy bills and higher house price values.
The report found that, in most cases, households can save between £376 to £482 annually on energy bills due to lower running costs. It added that heat pumps are over four times more efficient than gas boilers. Energy bills would also be lower because heat pumps are more effective at using off peak energy tariffs than traditional gas boilers.
Polling by Opinium found that 38% of homeowners would be more likely to consider swapping to a heat pump given the potential to save hundreds of pounds on their energy bill, that number rises to 47% in London.
The analysis revealed that installing a heat pump is also estimated to increase the price of a home by around 2.4%. With the average house in England worth £293,000, it noted, swapping out a gas boiler for a heat pump would equate to a £7,000 increase in the value of the property. A 3% increase in house prices would make a further 19% of homeowners consider swapping to a heat pump, rising to 26% in London.
Despite potential energy bill savings and house price increases, the report added that the lack of awareness of heat pumps among consumers, as well as the upfront costs of installation, mean that take-up levels remain far below the government’s targets. It said that homeowners still pay on average £5,690 to install a heat pump, even with the government’s existing grant.
It stated that, in order to encourage homeowners to consider fitting a heat pump, the government needs to incentivise heating as a service (HaaS). This would mean that consumers pay no upfront cost, but instead pay a monthly subscription of around £70 to install and maintain a heat pump. A total of 22% of respondents polled stated that they would be more likely to consider installing a heat pump if they were able to pay monthly.
The latest available data highlighted the challenge of reaching the government’s targets on heat pump uptake, with 28,062 heat pumps installed in 2023.
Gabriele Montesi, Interim CEO EMEA, HomeServe, said: “Heat pumps can lower energy bills and boost the value of your home. They also contribute to the UK’s plans to decarbonise its inefficient housing stock. The challenge is selling these benefits in a way that encourages homeowners to switch out their gas boilers.
“As this report makes clear, we need to reframe the discussion over heat pumps. At the moment the conversation is less about what a heat pump can do for the homeowner and instead is on what the homeowner should be doing to help the UK meet its net zero target.
“Without a change in emphasis towards the cost benefits of upgrading, the government will struggle to meet its heat pump installation target.”