DATA-BACKED GUIDE · UPDATED JULY 2026
Air source heat pump cost before and after the grant
An air source heat pump costs more upfront than a gas boiler, but the £7,500 Boiler Upgrade Scheme grant takes a large chunk off the price before you pay a penny, and 0% VAT on the installation trims it further. What you actually hand over depends on your home size, how well it is insulated, and whether the radiators need upgrading to run at lower flow temperatures. The real prices on this page show what people paid, with the grant already factored in by the installer rather than claimed back afterwards.
The quick version
- The £7,500 Boiler Upgrade Scheme grant in England and Wales is deducted by your MCS certified installer at the point of quoting, not claimed back later.
- 0% VAT applies to heat pumps and related insulation work until 2027, which lowers the headline price on top of the grant.
- A well insulated home needs a smaller heat pump and fewer radiator swaps, so the job costs less and the grant covers a bigger share of it.
- Poorly insulated or larger homes often need bigger radiators, extra pipework, or a hot water cylinder, all of which add to the bill before the grant is applied.
- Quotes for the same house vary a lot between installers because the system is designed around your specific heat loss, not sold off a shelf.
- National installers tend to quote higher than local ones for comparable work, so it is worth getting more than one price before deciding.
What people actually paid
Real prices, in people's own words
- £2,200“Mine was £2.2k after BUS from Octopus, 8 rads.”
- £2,900“I paid £1300 (ASHP), £1000 for cylinder and another £600ish for stuff.”
- £3,000“I paid roughly £10500 for a 7kW aurotherm plus with 300l UVC, no buffer tank as one zone and full install. Minus the Home Energy Scotland Grant (£7500) I paid £3000”
- £6,500“My Octopus install cost around £11,500 and I paid £6,500 after the grant”
- £8,500“I got a full package from coolenergy, heatpump, buffer, 300l HWC, carel controller, glycol, the works. That was £6300 after vat reclaim.”
- £12,000“We where charged 12k minus the grant for an 11 KW Mitsubishi”
Genuine amounts posted publicly. We publish the price and the quote, never the person.
Why the price varies so much
Heat pump prices move around far more than boiler prices because the system has to be designed around the specific house rather than dropped in as a like-for-like swap. An installer works out the property's heat loss and sizes the unit to match, so a draughty older home with solid walls needs a bigger, more expensive heat pump than a newer, well insulated one of the same floor area. Radiators are often the next variable. Heat pumps run at lower flow temperatures than boilers, so some homes need larger radiators to give out the same warmth, and that is extra parts and labour on top of the unit itself. A hot water cylinder is sometimes added or upgraded too, which pushes the job further. Then there is who does the work. A national installer generally quotes above a local one for a comparable job, so the same house can come back with genuinely different prices depending on who you ask. The £7,500 grant and the 0% VAT both reduce what you actually pay, but they are applied to the gross price, so a bigger, more complex job still ends up costing more even after both are taken off.
How to pay less
- Use an MCS certified installer, since only their quotes qualify for the £7,500 Boiler Upgrade Scheme grant.
- Sort out loft and wall insulation before the heat pump goes in. A warmer home needs a smaller unit, less pipework, and often no radiator upgrades at all.
- Get quotes from more than one installer, including a local firm, and compare them against the real prices on this page for a similar sized home.
- Check the quote explicitly states the 0% VAT rate and that the grant has been deducted, rather than assuming both are baked in.
- Ask whether your existing radiators will cope with a lower flow temperature before agreeing to a full radiator swap, since that is often where extra cost creeps in.
- Avoid rushing into a hot water cylinder replacement if your current one can be adapted. Ask the installer to justify it against your actual heat loss survey.
Common questions
How much does the £7,500 grant actually take off the price?
The Boiler Upgrade Scheme grant is £7,500 in England and Wales, and your MCS certified installer deducts it directly from the quote rather than you claiming it back afterwards. The real prices on this page reflect the full job cost, with the grant applied on top to bring down what you actually hand over.
Is VAT charged on a heat pump installation?
No. Heat pumps and related insulation work carry 0% VAT until 2027, so no VAT is added to the installation during that window. It is worth checking your quote explicitly shows the zero rate rather than assuming it has been applied.
Will I need new radiators as well as the heat pump?
Not always. Heat pumps run at lower flow temperatures than a gas boiler, so some homes need larger radiators to keep rooms warm, while others cope fine with what is already fitted. This is one of the biggest swing factors in the final price, so ask your installer to explain why any radiator changes are needed rather than accepting a blanket recommendation.
Does a heat pump cost more in an older or poorly insulated house?
Generally yes. An older home with more heat loss needs a bigger unit to keep it warm, and may also need extra pipework or insulation work alongside the pump itself. Insulating the loft and walls first, where practical, can bring the required unit size down and reduce the overall cost.
Should I get quotes from a national firm or a local installer?
It is worth getting both. National installers tend to quote higher than local ones for comparable jobs, so a local MCS certified installer can often work out cheaper for the same size and type of system. Compare more than one quote against the real prices on this page before deciding.
Do I need a new hot water cylinder with a heat pump?
Sometimes, but not always. It depends on what you already have and whether it is compatible with how the heat pump heats water. Ask the installer to justify any cylinder replacement against your actual heat loss and hot water usage rather than treating it as a standard part of every job.