Homeowners could save £7,000 on the cost of fitting a heat pump

Homeowners looking to upgrade their heating could save a total of £7,000 on the cost of fitting a heat pump to replace an old gas boiler, says Halifax.

Key points to consider:

Halifax offers up to £1,000 cashback on borrowing for energy efficiency improvements
Government Boiler Upgrade Scheme – offers grants up to £6000 for ground source heat pumps fitted from 1st April
Less than 1% of homes use a heat pump
Improving EPC rating could save £300 per year on energy bills for each band improvement

With the cost of heating our homes set to rise from tomorrow, as the energy price cap goes up from £1,277 to £1,971 for an average household*, many homeowners will be looking at ways to reduce their energy use.

With just 40% of British homes having an Energy Performance Certificate rating of C or better, improving the energy efficiency of our homes is essential to mitigate rising fuel costs. Halifax estimates that improving your home’s EPC rating could save over £300 on bills each year for each band it moves up – helping offset the cost of the work needed.

For many, the immediate action will be addressing the areas where heat is lost. Draft prevention, double or triple glazing, and loft or wall insulation can all help reduce the amount of energy it takes to keep a home warm.

For those that have already addressed their homes’ insulation, how it is heated will be one of the next things they can look at changing. Across the country, most homes rely on mains gas for their heating, with fewer than 1% choosing a heat pump.

Country or region name	Community heating scheme	Electricity	Heat pump	Mains gas	Oil	Other and unknown
England	4.21	11.89	0.80	78.58	3.04	1.47
Wales	1.35	8.57	0.71	77.75	7.75	3.87
North East	2.64	6.70	0.28	87.35	1.55	1.48
North West	2.47	11.56	0.33	83.27	1.26	1.10
Yorkshire and The Humber	2.17	10.28	0.47	83.38	2.17	1.53
East Midlands	1.82	8.62	0.84	83.16	3.80	1.76
West Midlands	1.79	11.98	0.58	81.11	2.87	1.67
East of England	2.09	12.53	1.37	75.91	6.67	1.42
London	16.45	12.63	0.72	69.17	0.02	1.00
South East	2.43	13.06	0.83	79.69	2.74	1.24
South West	2.02	15.35	1.56	71.71	6.85	2.51

For well-insulated homes, a heat pump that uses the warmth in the atmosphere or under the ground can be a good option. The cost of a heat pump is higher than that of a replacement gas boiler and some may see this as a financial barrier. However, the combination of two schemes could reduce the cost by as much as £7,000, making a heat pump much closer to the cost of a gas boiler.

For homeowners and buyers, who are borrowing against their property to fund energy efficiency improvements, Halifax is currently offering cashback on a range of work through its Green Living Rewards offer, including £1,000 for those installing a heat pump. And from tomorrow, homeowners could qualify for a grant of up to £6,000 to fit a heat pump with the launch of the Government’s Boiler Upgrade Scheme (see Editors’ Notes).

Andrew Asaam, Mortgages Director, Halifax, said:

“The cost of heating our homes has risen dramatically this year, and people will be looking at how they can reduce that both quickly and over the long term. Simple changes like extra loft insulation and draft exclusion can make a difference for relatively little outlay.

“For those who need to make more significant improvements, are at the point where they need to update windows or a boiler, or just want to lower their carbon footprint, the investment can be more significant.

“With our Green Living Rewards cashback offer, we hope to support these homeowners with some of the bigger energy efficiency improvements they might want to make, like better insulation, solar panels, or a heat pump.”

Kindly shared by Halifax

Main article photo courtesy of Pixabay