Heat pump install cost vs gas boiler running cost saving

Where the Running-Cost Advantage Comes From

A heat pump with COP 3 delivers 3 kWh of heat per 1 kWh of electricity. A gas boiler at 90% efficiency delivers 0.9 kWh of heat per 1 kWh of gas. When electricity is 3x the per-kWh price of gas, the two fuels cost roughly the same to run; when electricity is 2x or less, heat pumps win; above 3.5x, gas wins on running cost.

The Install Premium Matters

Heat pump installs typically run 8,000-15,000 (less government grants of 7,500 via BUS). A new gas boiler averages 2,500-4,500 installed. The premium is 3,000-10,000 after grants. That premium sets the hurdle the running-cost saving must clear over the appliance's 15-20 year life.

What This Calculator Does Not Model

Emissions savings are not priced. Building fabric upgrades (insulation, larger radiators) are not included. Heat pump output varies with outside temperature — cold snaps reduce COP. The calculator uses a single flat COP as an illustrative number rather than a full dynamic model.

Run it with sensible defaults

Using heat pump installed cost of 10,000, gas boiler installed cost of 3,500, annual heating demand of 12,000, heat pump cop of 3, the calculation works out to approx 15 yrs. Nudge the inputs toward your own situation and the output recalculates instantly. The defaults are meant as a starting point, not a recommendation.

The levers in this calculation

The inputs — Heat Pump Installed Cost, Gas Boiler Installed Cost, Annual Heating Demand, Heat Pump COP, and Electricity Rate — do not pull with equal force. Not every input has equal weight. Flip one at a time toward extreme values to feel which ones move the needle most for your situation.

How the math works

Heat pump running cost equals heat demand divided by COP times electricity rate. Boiler running cost equals heat demand divided by boiler efficiency times gas rate. Payback divides install premium by annual saving. Results are estimates for illustration purposes only. The working is transparent — you can verify every step yourself in the formula section below. No black box, no opaque "proprietary model".

When the result says "wait"

If the payback is longer than you expect to keep the item, the math says no. That's useful information — not everything has to earn its keep financially, but knowing when something doesn't means the decision to buy it anyway is deliberate.

What this doesn't capture

Purchase decisions rarely come down to payback alone. Reliability, time saved, enjoyment, and alternatives outside the calculation all matter. The figure gives you the money side cleanly so you can weigh it against everything else honestly.