Heat Pump vs Gas Boiler: Lifecycle Cost Comparison (UK)

[Green Power]

See separate comment below for sources. Use the symbols * # ^ to find the relevant source.

 

This is a comparison of the total forecast lifecycle cost of the heat pump I've just installed, vs the hypothetical gas boiler that I didn't install.

This is for my 2-bed end terrace of 71 square meters*. Air to water for heating and hot water. A 50 year old house with cavity wall insulation in one wall and loft insulation.

 

I have previously discussed this in the separate thread "Boiler Upgrade Scheme Grant - Actions to Take Now."

 

Based on a heating system lifetime of 13 years. Since the gas boiler is more likely to need immediate replacement after about 13 years, and the heat pump is more likely to last longer**, the 13-year time may be slightly favourable to gas. A 20-30 year view looks even better for heat pumps.

 

Daikin: internal unit is model number EHVH04SU18E6V and has a 6kW backup immersion heater and a 180-litre tank. The external unit is ERGA06EVA and has a nominal heating capacity of 5.90kW.

Overview
I estimate £1,105 more up front on the heat pump and then £100 per year saved on service/maintenance after that and £369 saved on fuel (including avoided gas standing charge) for a 2-3 year payback period.

Gas Boiler Costs
£2,300 for boiler ***(including boiler itself, labour and VAT)
£15,516 for gas (13 years at £1,194 per year based on 11588kWh**** per year at £0.103 per kWH#).
£1,330 additional for standing charge (£102 per year at £0.28 per day#.)
£2,600 for maintenance/service/repairs (£200 per year).##
£130 for 2 gas safety certificates at £65 each. ###
TOTAL: £21,876

Heat Pump Costs
£3,405 for heat pump after grant^ (full installation cost including labour, a heat pump, and a hot water tank)
£12,052 for electricity (13 years at £927 per year based on 2727kWh^^ at £0.34 per kWh#)
£1,300 for maintenance/service/repairs (£100 per year).^^^
£106 for removal of the gas meter.^^^^
TOTAL: £16,863.

Saving after 13 years: £5,013. Break even point 2 years 4 months.

Edited October 26, 2022 by Green Power

[Green Power]

Sources and notes for original post.

* Your house size can be found on your energy performance certificate, which can be searched for online if you don’t have it.

**If you google “gas boiler lifetime” 10-15 years is a common figure in various articles and fits with my experience. If you google “heat pump lifetime” and look at everything that comes up it varies 10-30 years, I think 17 looks about the average of the opinions.

*** For the price of the boiler, I considered the size of my house and used (I did not get any quotes) How much does a new boiler cost? - Which? (partly paywalled), Guide to New Boiler Installation Costs 2021 and Boiler Calculator - Cost of New Gas Boiler with Installation From the average of these articles I estimate £2,600. However I only paid £1400 for boiler in 2011 (same house), which would be £2000 today with inflation. So call it £2,300.

**** 11588kWh per year is based on actual meter readings for the house from October 2021 and October 2022.

# https://www.moneysavingexpert.com/utilities/what-are-the-price-cap-unit-rates-/#tool These are national prices. Prices vary slightly by region: https://www.moneysavingexpert.com/utilities/what-are-the-price-cap-unit-rates-/#regional This is for direct debit – for others (prepayment, or paying on receipt of bill) that can be found via first money saving expert link above. Note that the standing charge for gas is eliminated when you install a heat pump so is an extra charge for gas. The standing charge for electric is ignored in the calculation since it is paid regardless of whether you have a heat pump or not. Also, note that in our case we have no dual fuel discount. If you have a dual fuel discount, you need to factor in if you would lose that by going all electric. Another consideration is whether you can save more by going to a cheap overnight tariff. I think not in many cases because you will still have a chunk of heating being used during the day at a higher rate. So I suspect that’s irrelevant in most cases: exception would be an extremely well insulated house that you could heat only overnight. In such a case, you can do much better with heat pump than the calculations here suggest.

## £200 per year for service/maintenance of gas boiler is based on personal experience.

### The price of a gas safety certificate is based on what I actually paid in recent years. I’m assuming you do 2 in 13 years. The cost is higher for landlords, as it is obligatory every year.

^This is the price I’m actually being invoiced. That is £8405, less £5000 grant, so I pay £3405. This is after shopping around a bit as many were about ~£2k higher.

^^ For electricity use of 2727kWh, this is the electricity for the heating and hot water only, not the total electricity bill. This is based on a gas boiler efficiency estimated at 80% (from sources online) and a heat pump efficiency of 340% (based on many sources including articles, forums, and youtube videos that people have shared after actually measuring it). 340% means a SPF (seasonal performance factor) of 3.4 or average COP of 3.4. I’m assuming 3.6 for heating and 2.5 for hot water, with a weighted average of 3.4. Dividing 340 by 80, that makes a difference of 4.25. Dividing the known 11588kWh for the last full year by 4.25 gives us the 2727 kWh.

^^^This is based on the quote I got for annual service, and some articles and videos I read ages ago (don’t have sources handy) and some comments on this forum. £150 per year is charged for service by the company I use, but I’ll only pay this the first few years to keep the guarantee in place.

^^^^ This is what I was quoted by Southern Electric (now OVO).

Further notes:

• I’m assuming for simplicity there will be 0% inflation for the next 13 years and that gas and electric will remain at the same price for 13 years.
• If I were to value my time at a high amount (say £100 per hour) and then work out how many additional hours I spent on this project vs installing a gas boiler (10 hours extra maybe? : mainly learning about heat pumps, this forum thread and getting and following up on quotes), a chunk of the savings would disappear. (£1000 value of my time.) However, I’ve decided to ignore this in the calculation.

 

Edited October 26, 2022 by Green Power

[nod]

13 years is quite a short period Our last two where in over 20

HPs are more expensive to run than a gas boiler and also can breakdown and will need servicing each year 

Getting seven k off the price of your HP makes it a no brainer for you 

 

We installed a gas boiler in our first build 165m2 on the ground floor and very cheap to run

Theres no gas at our next build so a HP is the only option 

We have been told expect running cost to be about a third higher and initial outlay to be at least treble 

[Dave C]

2 hours ago, nod said:

 

HPs are more expensive to run than a gas boiler

 

Not sure why you say that ... at the current energy cap prices, a heat pump that manages a COP of ~3x is going to work out a bit cheaper than a gas boiler to run. If you can manage a COP of more than that, like the 3.4 COP figure Green Power quotes above, it'll be a bigger saving. (And if you can get off-peak electricity to run the heat pump, that'll help too, of course - but the heat pump works out cheaper even without such a plan, it's by no means required.)

 

2 hours ago, nod said:

We have been told expect running cost to be about a third higher

 

Well, all the figures above lay out why your running cost can quite plausibly be lower!

[PeterW]

4 hours ago, Green Power said:

£15,516 for gas (13 years at £1,194 per year based on 11588kWh**** per year at £0.103 per kWH#)

 So this …

4 hours ago, Green Power said:

This is based on a gas boiler efficiency estimated at 80% (from sources online)

.. and this … are mildly incorrect. A new condensing boiler will give you 88-90%, which then means you need to recalculate the cost of electric.

 

so based on 88% efficiency, you need 13,160kWh of heat for DHW and heating. 
 

Given a 40/60 split for DHW and heating, you need 5,264kWh for DHW and 7,896kWh for heating.

 

Now.. with the standardised SCOP for your Daikin ASHP unit at 3.26 mean on 55°C output, which is pretty good, you will consume 2,442kWh (£823) for the heating, and 1,614kWh (£549) for the DHW excluding taking the tank temperature any higher than 55°C (which in reality is around 18% less DHW capacity than the boiler heating to 68°C) which would be at CoP 1.0 as would be direct electric via the immersion. 

 

On those numbers, your total cost of electricity is £1,372 so on a weighted 13 years a total of £17,836 or £2,320 more than a gas boiler over the same period.

 

If you then remove any grants - which you can’t get on a new build anyway - the cost of an installed heat pump over 13 years is around £7,230 higher than the equivalent gas boiler with standard UVC. That allows for replacing a boiler at 13 years and nearly £5k change left over. 

 

I have also not included any additional cost for increased radiator sizes to work with the d35°C (additional 20% size) from the ASHP vs boiler flow temperatures. 
 

You could load shift the DHW to off peak electricity but that’s a marginal saving of £3,220 or the difference of around £70/yr against a gas boiler. 
 

The only way to drive the efficiency is drop the output temperature to 35-38°C and drive the Cop up to 4.45, which takes around £200/yr off the cost of the heating - essentially break even on gas. 
 

In a new build environment with an good air tightness, high insulation levels and using UFH, you can make an ASHP pay, but in a building to standard building regs, and with radiators and UVC you will run at a higher TCO than a gas boiler for all of the above reasons. 
 

 

[Radian]

4 hours ago, Green Power said:

**If you google “gas boiler lifetime” 10-15 years is a common figure in various articles and fits with my experience. If you google “heat pump lifetime” and look at everything that comes up it varies 10-30 years, I think 17 looks about the average of the opinions.

I really don't think can go along with this. The compressor unit of an ASHP is outdoors and anything outdoors gets a hammering by the elements. I've seen some examples on these forums that confirm my doubts. It's not just cosmetic, PCB's and wiring all suffer far more than they do in an indoor environment. And gas boilers easily make 20 years or more in my five decades of experience of such things.

[Seren161]

32 minutes ago, PeterW said:

f you then remove any grants - which you can’t get on a new build anyway -

You can get the grants on a new build but I also think that odds are that the boilers will usually outlast the heat pumps…I still favour heat pumps for environmental reasons ..they are not a perfect solution but they are certainly progressive. That said..I know of the old split unit air conditioner units in much harsher climates that have lasted 22 years so it’s all a bit of educated guesswork but still guesswork 

[PeterW]

20 minutes ago, Seren161 said:

You can get the grants on a new build

Apologies I forgot the BUS was being applied to new build - only issue is you need to use an MCS accredited company to install which adds £3k minimum to the price !!
 

[nod]

As with E cars PV A lot of the claims are wildly optimistic 

You seem to think that HPs will run without serving Most boilers are simply gas checked for the first few years I pay £50 per year 

It would be a great surprise if when we complete our home we find that the running costs of the HP is less than a gas boiler But the installers I’ve spoken to say it’s unlikely 

and comparisons are usually made with old inefficient gas boilers 

We live in a large five bed house and the gas usage figures quoted are miles off 

 

ASHPs Are they greener than gas 

NO Not at the moment Because most of the electricity generated to run them are relying on gas 

Predicted power cuts due to gas shortages this winter 

 

I do wonder if further down the line we will see a similar situation to PV with lots of mis selling court cases 

Lots of wild claims out there 

As I’ve already stated If you can get most of the initial cost on a grant 

Definitely a good thing for you 

 

[JamesPa]

2 hours ago, nod said:

ASHPs Are they greener than gas 

NO Not at the moment Because most of the electricity generated to run them are relying on gas 

Er - your conclusion is simply incorrect. 

 

It is true that grid electricity is currently very slightly more 'dirty' than gas per unit of energy (kWh) input   (https://www.gov.uk/government/collections/government-conversion-factors-for-company-reporting).  However an ASHP uses between one third and one quarter as much energy for a given energy output.  So for each kWh you put into an ASHP you get between 3 and 4kWh out.  This overwhelms the slight difference between the emissions per unit of energy input, and as a consequence an ASHP heating system has roughly a third the carbon footprint (or better) of a gas one.  The comparison with oil or resistance electric heating is similar.

 

So to be crystal clear, ASHP reduces the carbon footprint of a traditional home heating system (gas, electric or oil) by a factor of 3-4.   That's a pretty spectacular reduction.

Edited October 27, 2022 by JamesPa

[joth]

9 hours ago, PeterW said:

Apologies I forgot the BUS was being applied to new build - only issue is you need to use an MCS accredited company to install which adds £3k minimum to the price !!
 

Also it only applies to self builds (owner occupier), not to developer new builds. But that's not a problem for people on this forum 🙂

[nod]

52 minutes ago, JamesPa said:

Er - your conclusion is simply incorrect. 

 

It is true that grid electricity is currently very slightly more 'dirty' than gas per unit of energy (kWh) input   (https://www.gov.uk/government/collections/government-conversion-factors-for-company-reporting).  However an ASHP uses between one third and one quarter as much energy for a given energy output.  So for each kWh you put into an ASHP you get between 3 and 4kWh out.  This overwhelms the slight difference between the emissions per unit of energy input, and as a consequence an ASHP heating system has roughly a third the carbon footprint (or better) of a gas one.  The comparison with oil or resistance electric heating is similar.

 

So to be crystal clear, ASHP reduces the carbon footprint of a traditional home heating system (gas, electric or oil) by a factor of 3-4.   That's a pretty spectacular reduction.

 But still reliant on Fossil fuel

 

[JamesPa]

1 hour ago, nod said:

 But still reliant on Fossil fuel

 

Yes, but the point is 3-4 times less carbon emissions, ie approx 3-4 times less fossil fuel used..  Furthermore as the grid decarbonises this can only get better. 

 

If you are looking for a completely fossil-fuel free solution you are currently out of luck, unless you have sufficient local generation capacity or local heat storage on an annual scale.  But a 3-4 fold reduction is an extremely good start and, with the promise of a greener grid, will get us to where we need to be.  Doing nothing on the grounds that there is no perfect solution will not.  

[Green Power]

Thank you all for your feedback.

I think people have a “stick with what you know” attitude or resistance to chance and this has subtly affected the arguments too much in favour of gas boilers. I suspect I´ve seen this attitude on this forum at times, but also in broader society.

Prices have shifted in favour of electric recently. Some of your advice that heat pumps are more expensive to run is probably out of date.

Modern gas boilers are certainly claimed at 90% rather than 80%, but I´ve seen several posts on other forums from people saying that they did very careful calculations and reality is nearer 80%. I don´t have a high confidence in this. Further information/sources/studies would be helpful.

Thanks for the feedback on gas boiler lifetime. Mine was falling apart and in desperate need of replacement after 10-11 years. What have others experiences been? I would define “lifetime” as the length of time before it gets replaced. It´s possible that gas boiler installed in 2022 will be proactively replaced for climate change reasons by about 2035 even if they are working fine.

[Green Power]

4 hours ago, JamesPa said:

Er - your conclusion is simply incorrect. 

 

It is true that grid electricity is currently very slightly more 'dirty' than gas per unit of energy (kWh) input   (https://www.gov.uk/government/collections/government-conversion-factors-for-company-reporting). 

I´m not sure even that is true. If the grid is a mix of gas and renewables, surely it is a cleaner than gas. (There is hardly any coal.)

Couldn´t quite find the answer in your source, although I only had a couple of minutes to spare to check.

But, this is a question about whether heat pumps are 70% better on climate change or 85% better, but it´s clear that they are better. I have done a calculation for my specific case which I can share another day in a separate article.

[SteamyTea]

https://carbonintensity.org.uk/

 

[billt]

10 minutes ago, Green Power said:

I think people have a “stick with what you know” attitude or resistance to chance and this has subtly affected the arguments too much in favour of gas boilers. I suspect I´ve seen this attitude on this forum at times, but also in broader society.

 

Prices have shifted in favour of electric recently. Some of your advice that heat pumps are more expensive to run is probably out of date.

 

 

Running costs very much depend on what your rates are. At the moment here peak rate electricity is 44p per kWh, gas is 11p per kWh. i can't see any practical system getting a SCOP of 4. Of course it's always possible that the government will stop subsidising gas and remove some of the loading on electricity which would change things, but I'm not holding my breath.

 

Then there's the cost to change, which isn't trivial. I've been thinking about changing from gas to ASHP for sometime and designing a system. Although the heat pump is sort of affordable at least 4 radiators will need replacing and the plumbing will need reconfiguring. Probably replace the cylinder as well. That's likely to cost over £10,000 in materials which makes the idea nonsensical from a financial point of view. It will also entail massive disruption.

 

As to boiler longevity, the gas boiler in our flat has a sticker with 2004 on it, so it's at least 18 years old and still working properly.

[JamesPa]

38 minutes ago, Green Power said:

I´m not sure even that is true. If the grid is a mix of gas and renewables, surely it is a cleaner than gas. (There is hardly any coal.)

Couldn´t quite find the answer in your source, although I only had a couple of minutes to spare to check.

But, this is a question about whether heat pumps are 70% better on climate change or 85% better, but it´s clear that they are better. I have done a calculation for my specific case which I can share another day in a separate article.

As you say electricity is a is largely of renewables and gas, so prima facie you might expect it to be cleaner than gas.  I'm guessing, however, that electricity system losses are much bigger, so by the time its delivered to the consumer that counteracts the 'at source' benefit.  The official conversion factors are on the 'fuels' tab (natural gas - gross -  0.182 kg(e) per kWh and on the 'UK electricity' tab ().191 kg(e)/kWh.  The electricity figure has come down (got better) in each of the four years I have had a reason to look at these numbers.

 

As you say this makes a difference between heat pumps being something like 70% better or something like 85% better.  At this stage that's not a material difference, what is material is that this is a factor of 3 or 4 and will improve during the lifetime of the unit, because the electricity grid is decarbonising.  

 

My personal calculations on relative lifetime cost have gas and heat pump coming out roughly equal to within the quite considerable uncertainty on the figures (even more uncertainty since energy prices are essentially artificial).  'Roughly equal' is definitely good enough given the environmental benefits, particularly as the gas boiler is reaching the end of its useful life.   Mind you I'm doing some of the work myself!

[Dillsue]

1 hour ago, Green Power said:

Thanks for the feedback on gas boiler lifetime. Mine was falling apart and in desperate need of replacement after 10-11 years.

If youre relying on the advice of others I think you need to be cautious with gas boiler lifetime as its not uncommon for plumbers to advise on replacement prematurely. A friend had his boiler condemed with a replacement quote for £2500. With the cover off in 2 mins it was quite obvious the fan impeller had failed. It was £80 for a replacement OEM fan delivered the next day and 15 mins to fit. Not sure if this was revenue generating or lack of ability, but its not good. My wifes uncle had a similar instance with a leaking condensate drain.

 

[HughF]

2 hours ago, Green Power said:

 

Thanks for the feedback on gas boiler lifetime. Mine was falling apart and in desperate need of replacement after 10-11 years. What have others experiences been? 

 

Baxi Bermuda installed in '86, still going just fine... It's had a new thermocouple, and a new click-click lighter, that's about it. 72% efficient though...

 

Same, 120ltr vented cylinder, same single panel rads. New circulation pump 15yrs ago and a new 3 port valve head and new tank stat 5yrs ago.

Edited October 27, 2022 by HughF

[Green Power]

Steamy Tea, thanks for the carbon intensity graph. However, it shows carbon intensity now or tomorrow. What would be more useful would be the average for 2021, and the average for 2022 so far.

Hugh F, Your 86 Baxi lasted longer than my 2011/2012 Baxi.

Thanks for all the comments on boiler longevity. I may have been pessimistic on my gas boiler longevity by the look of all your feedback.

But note that however long gas boilers last will have a minimal effect on the relative cost vs heat pump, since the running costs are the majority of the costs.

[Green Power]

6 hours ago, billt said:

Running costs very much depend on what your rates are. At the moment here peak rate electricity is 44p per kWh, gas is 11p per kWh. i can't see any practical system getting a SCOP of 4.

It doesn´t have to be 4 though, it only has to be about 3.4 when you allow for gas boiler efficiency. Maybe 3.2 if we accept some reduced repair costs with heat pump.

 

Also, where do you get 44p per kWH?

 

My source is https://www.moneysavingexpert.com/utilities/what-are-the-price-cap-unit-rates-/#tool

which has electricity at 34p not 44p.

 

At 34p, that´s a difference of about 3.4, or 2.9 after allowing for gas boiler efficiency. If we accept some reduced repair costs with a heat pump, even a 2.7 COP might be cost parity.

[HughF]

Target scop of 2.3 for us, 72% boiler efficiency means a kWh of heat from our boiler costs us 14.76p as we pay 10.63p/kWh on prepayment.

Edited October 27, 2022 by HughF

[JohnMo]

The only thing to say in defence of a gas boiler is the 80% efficiency, is not always the case. 

 

If you compare it on a like for like basis i.e. on low flow temperatures, a part load efficiency is being quoted for our boiler (Atag A325ECX) of 109.2%, with a flow temp of 36/30 return.  When looking at DHW with flue gas heat recovery it is being quoted as annually 95%.

[HughF]

22 minutes ago, JohnMo said:

The only thing to say in defence of a gas boiler is the 80% efficiency, is not always the case. 

 

If you compare it on a like for like basis i.e. on low flow temperatures, a part load efficiency is being quoted for our boiler (Atag A325ECX) of 109.2%, with a flow temp of 36/30 return.  When looking at DHW with flue gas heat recovery it is being quoted as annually 95%.

Yep, but we need to remember the great condensing boiler con 🤣 I would wager that 80% of condensing boilers are installed on rads that require deltaT50 and they’ll be setup with on/off controls. They for sure won’t be running at your exemplary 109.2%