Is An Air Source Heat Pump Cost Effective?

There’s a wide range of options for heating and cooling a home but if you want to change your home’s heating system to help save money in the long term, an air source heat pump can be a great choice.

An air source heat pump can be a cost effective way to heat and cool a home when costs are considered over the life time of the system. However, due to typically high purchase and installation costs for a whole air source heat pump system, they may not be cost effective in the short term.

Our air source heat pump (ASHP) was installed when the house was built in 2017 and so didn’t replace an existing heating system. The cost of the air source heat pump heating system was reflected in the price of the house, however.

Air Source Heat Pump
The longer we stay in our home the more cost effective our air source heat pump can become

We’re looking to stay in this house for the foreseeable future and so this air source heat pump can personally be considered a cost effective way to heat our home.

To help understand whether an air source heat pump can be considered cost effective we discuss the following through the rest of this article:

  • What an air source heat pump is
  • How they work
  • Their cost-effectiveness
  • Air source heat pump advantages and disadvantages
  • How to choose the right air source heat pump

Is An Air Source Heat Pump Cost Effective?

An air source heat pump is an appliance that can provide both heating and cooling for a home (or another building) and transfers heat stored within the outside air rather than converting it from another source of energy, like traditional forms of heating systems do (helping to make them very efficient).

An air source heat system takes the warmth from the air outside, even if the air outside is extremely cold, and turns it into heat to warm a building internally. As the heat stored within the outside air is a renewable source of energy, installing an air source heat pumps can be considered a cost-effective move, along with multiple other reasons.

Air source heat pumps have been used for years in many locations, except those with extreme temperatures, as a heat pump may not be able to extract sufficient amounts of heat from very cold air.

There are two main types of air source heat pump:

  • Air to air heat pumps, which transfer outside air heat to use inside as warm air.
  • Air to water heat pumps, which transfer outside air to use within water in a home, such as central heating and domestic hot water.

We have another article covering all the differences between air to air and air to water heat pumps here.

There are a few different forms of air to air heat pumps:

  • Ductless
  • Ducted
  • Short-run ducted

Ductless systems don’t require much construction and are often installed in addition to the home. These systems use ductwork that is likely preexisting in any ventilation system. Short-term ducted systems use an extensive ductwork system and ductless units throughout the rest of the building.

See our article comparing ducted and ductless air source heat pumps for more information.

An air to air source heat pump installation can be cost effective when you have preexisting ventilation systems that would be suitable for an external air source heat pump unit that won’t need too many upgrades internally inside a house.

Our air source heat pump is the air to water type and is the sole supplier of heat for our home for use in central heating and domestic hot water.

Air Source Heat Pump Back
Our heat pump is the air to water type and delivers heat energy into our home through refrigerant in pipes

As this heat pump was installed new with the house, the internal equipment suitable for use with an air source heat pump was installed from the start.

Heat pumps extract and generate heat more slowly compared to traditional gas or oil heating systems and so the right internal apparatus is required to release this lower-temperature heat more effectively and efficiently over time.

This apparatus can include large and numerous radiators, and underfloor (radiant) heating, both of which have large surface areas for releasing heat more efficiently.

Our home uses underfloor heating across the lower floor and radiators on the upper floor to release heat extracted from our air source heat pump most effectively.

Air Source Heat Pump Radiator
Air source heat pumps can be more cost effective when the right means of releasing the heat is provided across the home, such as large surface area radiators

See our articles on using air source heat pumps with radiators and using air source heat pumps with underfloor heating for more information.

Air to water heat pumps can also be used to supply domestic hot water for a home and a water heater storage tank is typically required to achieve this.

Our hot water tank is located in our utility room cupboard along with all of the other necessary heating equipment, and the tank has an immersion heater to help top up the water temperature when necessary.

Air Source Heat Pump Hot Water Tank
If looking to use an air source heat pump for domestic hot water like we do, you’ll need the right storage tank and associated apparatus

Installing an air to water heat pump can therefore be more cost effective when:

  • Radiators don’t need major updates (such as replacing all single radiators with larger double or triple radiators).
  • Pipes don’t need replacing (microbore pipes may need to be replaced to work with an air source heat pump system)
  • Any existing hot water tank is suitable for use with a heat pump.
  • There is a good level of insulation within the house (poorly insulated houses will struggle to keep the warmth us as the heat pumps deliver heat over longer periods of time).

If you would need to replace an entire existing heat system to make way for an air source heat pump system, you have a poorly insulated home and aren’t looking to stay in that house for long then it may not be cost effective to have a heat pump installed.

However, if you need to have a heating system replaced anyway then installing an ASHP can be worth it.

A local installer will be able to take you through all of the required upgrade works and costs, and is always worthwhile if you’re serious about installing a more renewable source of heat for your home.

If you’re looking to move to zero carbon heating, then installing an air source heat pump may be the best option for you even if it isn’t a cost-effective choice at this moment in time.

Should You Use An Air Source Heat Pump?

An air source heat pump can be cost effective in many situations, even when installation and maintenance costs are taken into consideration. A heat pump can save three times as much energy as conventional electric heating.

Air source heat pumps are typically very efficient appliances and most modern units are able to generate over 3 units of heat energy from every one unit of electricity consumed.

This is often to referred to as the coefficient of performance (COP) or the SEER (seasonal energy efficiency ratio) or HSPF (heating seasonal performance factor).

The COP for our own ASHP is highlighted below.

Air Source Heat Pump Plate
The high performance coefficient of our air source heat pump helps make it more cost effective to use

The more energy-efficient the system, the greater the long-term savings can be on energy costs.

Electricity is the only power source required for running an air source heat pump and so electricity bills will be the only costs.

Air source heat pumps are particularly cost effective if you’re building a new home.

The installation costs of a heat pump system can be lower than the gas furnace or central air conditioning alternatives, especially if installing a ductless air source heat pump.

Typically, heat pumps also require less maintenance than combustion heating systems, so you’ll likely save on maintenance costs.

Additionally, air source heat pumps can have a long lifespan, so even though there’s a high initial installation cost, once the unit is installed, it’s likely you won’t have to replace it for a long period of time.

Air Source Heat Pump
Our heat pump is still going strong after 5+ years of use

How Does An Air Source Heat Pump Work?

An air source heat pump uses the same technology that keeps your refrigerator cold but uses that technology in reverse. It consists of a compressor and two coils with fins that aid heat transfer.

When in heating mode, the refrigerant in the outside coil takes heat from the air, turns it into a gas as it warms it up, and compresses it to further increase temperatures.

This heated gas is passed through a heat exchanger to deliver heat to a home and an expansion valve lowers the pressure and turns the gas back into a liquid, and the cycle is started over again.

See our main article on how air source heat pumps work for more information.

Air Source Heat Pump Cost Advantages

There are some other advantages of air source heat pumps and their cost-effectiveness.

Air source heat pumps are a great way to reduce your carbon footprint.

For every 3 to 4 units of energy produced from your heat pump, only one unit of electricity is used, making it a more energy-efficient option, as well as using significantly less energy than coal or an electricity-based system.

These pumps also eliminate the need for a central air conditioning system, as they can be used for both heating and cooling.

Finally, heat pumps can be safer than other heating alternatives, as no combustion or gas emission is involved.

Air Source Heat Pump Cost Disadvantages

These systems certainly have plenty of advantages, including their cost-effectiveness, but there are some disadvantages to having an air source heat pump installed in your home.

Air source heat pumps typically have a higher installation cost and can be fairly challenging to install. Installation may require some serious disruption to your house and property.

Air Source Heat Pump Water Heater Tank
Purchase and installation costs can be high, especially if the existing heating setup isn’t fit for purpose

Air source heat pumps have a lower heat supply, so it’s essential that you either live in a moderate climate or have a well insulated home.

Another disadvantage is that these systems can be noisy. However, there are ways to minimize the sound.

Additionally, if you live in a very cold location, an air source heat pump may be unable to retrieve enough heat from the air to efficiently change the temperature in your home.

See all of the pros and cons of air source heat pumps here.

Tips On Choosing the Right Air Source Heat Pump

When making a big purchase and significant changes to your home, consulting a professional is always a good idea. A heating engineer can calculate how much heat your house will require and help you select a heat pump that will meet those needs.

A heating and cooling professional can help you determine the size of the air pump you’ll need, taking your home’s foundation, walls, windows, and air filtration into consideration. If you get a heat pump too big for the space you’re heating, it can be too underutilized to be efficient and cost effective.

After you know how much heat you need and the approximate size air pump you’ll need, consider the structure of your house as well as your specific needs.

Do you have an existing duct system? Are you only looking to heat and cool one room? Are you building a new home? It’s essential to find a heat pump that meets your particular requirements.

See all of our air source heat pump tips here.

Are Air Source Heat Pumps Cost Effective?

Air source heat pumps are an excellent option for heating a home.

How cost effective an air source heat pump installation will be can depend on a number of factors including your existing heating setup, its age and whether it needs replacing, how well insulated the house is, local electricity costs and how long your planning in staying in that house.

Air source heat pumps need to be considered over the long-term lifecycle of the unit/system. They may not be cost effective in the short-term but can be in the long-term when installation costs are recuperated.

If you live in a relatively moderate climate and are willing to pay for a higher installation cost, getting an air source heat pump for your house is likely to be one of the best financial and environmental decisions for your home.

Further Reading

How Long Air Source Heat Pumps Last

Are Air Source Heat Pumps Worth It?

Are Air Source Heat Pumps The Future?

Will Air Source Heat Pumps Get Cheaper?

Parts Of An Air Source Heat Pump Explained