The Real Cost of Heat Pumps

We’re publishing a guest post by Guy de la Bédoyère, historian and long-standing contributor to the Daily Sceptic about the exorbitant cost of installing a heat pump. He reckons that if you factor in set-up costs and running costs, it would cost him around £40,000 over the next 10 years.

Listening to someone who has just had a heat pump installed and is banging on like a religious zealot – as I have done – is like coming across a man dancing for joy because he has just had his wallet stolen and lost his life savings.

Several years ago we started investing in a solar panel system. It was a no-brainer. We had the money earning nothing in the bank and we are fortunate enough to live in a suitable house with a large outbuilding on which the (nominal) 4KW system was fitted. It cost about £5,000, having dramatically come down in price as soon as government grants were ended. Fancy that?

We noticed the reduction in electricity bills immediately and to that we could add the Feed-In Tariff (FIT) which is, sadly, no longer available to new installers. Under its terms, you get paid for the power you generate, whether or not you’ve used it yourself. In 2020 we added two batteries because, after all, a solar power system without batteries is like filling the bath without the plug in. That cost about another £3,000 (including the additional inverter and wiring), but we have since added a third (£900) and will have a fourth fitted next month. That represents a practical limit to our setup.

The bottom line is that the system is paying for itself. The annual return on the capital is about 16% so most of the outlay has been recovered. The electricity is free and – crucially – harvesting it is free too. The system runs the house for nothing most of the day, as well as diverting spare power via a special device to heating our water and charging the batteries. We can now run all evening and most of the night for free as well. Even better, the higher electricity prices rise, the more we’re saving.

Heat pumps are, as it turns out, an entirely different story, but the way some politicians and journalists bang on, you could be forgiven for thinking they’re going to save the planet and your bank balance by using all that free energy from Mother Nature. No, they won’t and I’m not even going to discuss how well they heat a house.

I’ve just had a quote for a heat pump, in this case an ‘air source’ version. It would cost us £11,000 for the pump, topped up by a government grant of £5,000 to cover the full price of £16,000. That does not take into account potential extra costs for enhanced insulation to make up for the relatively low heating capability of the system, and possibly having to replace the radiators.

And then there’s the cost of running it, something most people do not realise. The estimated power consumption of our putative heat pump was to be just over 10,500 KWh per annum. That’s just under 29 KWh per day, or about £7–£8 at present prices (factoring in that daily use in winter would be far higher). You can work that out from your electricity bill, but in my case that represents a 400–500% increase in my bill by £3,000 per annum on top of what I already pay.

Although the heat the pump extracts from the atmosphere is ‘free’, the pump requires a huge amount of additional power from the grid to run the system, unlike a solar panel setup, and there’s no feed-in tariff of any sort – obviously, because it isn’t generating any new power. The system was to be guaranteed for 10 years which therefore means at current prices you are looking at around £40,000 over that period (running costs + initial outlay).

I might add that our solar panels are on a roof and don’t get in anyone’s way. One of the inverters is in the outbuilding and the one for the batteries is in the utility room. An air source heat pump, by contrast, is a large appliance that looks like an air conditioning unit suitable for a small block of flats being parked outside your house and connected with large pipes. A ground source pump means ripping up quite a lot of your garden (if you have one).

Now, it’s pretty obvious that the oil we are using for our existing boiler has gone up hugely in price and it may get worse. But I can’t see any basis for dumping an existing system that works perfectly well for one that costs just as much (or more to run) and might cost me as much as £15,000 to install.

And let’s not forget: manufacturing all these new heat pumps comes with its own massive carbon footprint. But apparently, heat pump fanatics are perfectly happy to overlook that, as well as the gigantic Ioad that heat pumps will impose on the grid and all the installations and infrastructure necessary to cover that as well as to charge all the electric cars we’re being encouraged to buy. To put it into perspective, I’d have to have four times as many solar panels and batteries as I already have just to run the heat pump if I was to cover its needs myself.

As so often with government initiatives and especially Net Zero, one just has to wonder: how stupid do they think we are? I’m all for saving energy, but I’m not going to change my heating system for one that replaces being ripped off for oil by being ripped off for electricity and paying out well over 10 grand for the privilege.

The difference in the maths between the solar panels and the heat pump is enormous. One makes sense because it pays for itself, cuts bills, and ends up returning a profit, but still depends on having the room and the funds. The other under present circumstances is lunacy – unless, and only if, you are having to replace the heating system anyway. But it will still cost far more than a conventional replacement.

This may be settled in the future. Heat pumps are at an early stage of development. The most likely prospect is that they will become far cheaper and far more efficient. The worst thing that could happen now is millions of people being coerced and rushed into installing, or convincing themselves to install, existing inefficient and costly systems and then being obliged to scrap them in favour of newer, ‘greener’ heat pumps in a few years.

Or could that be the plan all along – to empty out people’s savings on the latest moral crusade? The moment one understands the Net Zero cult to be just as much about making money and futile gestures as anything else it all finally makes sense.

If we rush into this, it’s almost inevitable we’ll make things worse and then we, like most past generations, will be cursed by our descendants.

I sent some of this to Roger Harrabin, the soon-to-retire BBC’s Energy and Environment Analyst, whom I used to know when I worked there. He told me he’d “filed it”. Hmmm. I bet he did.