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Heat Pumps Paybacks

There are two parts to look at when considering paybacks on Air Source or Ground Source heat pumps. The first part to look at how much will be saved by getting rid of an old oil/electric/LPG boiler and replacing it with a new, efficient heat pump system. Efficiency can best be explained by looking at the comparisons between Electric heating. The second part is the RHI payments.

Running costs

Electric heating is considered 100% efficient. Where this looks good initially, it is actually pretty poor when you compare it to Air or Ground source which are approx. 400% efficient, so four times more efficient than electric. The more efficient your heating system is, the lower your running costs are.  

Payback on the RHI (Renewable Heat Incentive).

Our initial survey will give a very good estimate of return on the RHI which will then be confirmed by the Energy Performance Certificate (EPC) that is required in order to claim the RHI. The Energy Performance certificate must be no more than 2 years old.  

An example of how the RHI is calculated is below:

Page 4 of your Energy Performance Certificate will detail estimated Space heating and hot water to be used over the period of a year, e.g.:

  • Space heating: 28,000kWh
  • Hot water: 4,000kWh 
  • Total heat demand: 32,000 kWh 

From these figures, a calculation will be made to show how much renewable heat will be generated to satisfy the demand. 

Exterior Heat Pump Cornwall

RHI (Renewable Heat Incentive)

RHI (Renewable Heat Incentive)

The Renewable Heat Incentive is the amount paid to you from the government for having a renewable heat source installed instead of using fossil fuels.

A typical calculation would be both Air Source and Ground Source:

  • ASHP – 20,000 ÷ 3 (SPF of the system at 4* or 45°C) = 6,666kWh (yearly electric consumption of the heat pump). 20,000 - 6,666  = 13,334kWh × 10.18p = £1,357 per annum × 7 years (life of the RHI) = £9,499
  • GSHP – 30,000 ÷ 3.7 (SPF of the system at 4* or 45°C) = 8,108kWh (yearly electric consumption of the heat pump). 30,000 - 8,108 = 21,892kWh × 19.85p = £4,346 per annum × 7 years (life of the RHI) = £30,422

See our RHI page for more information.