Heat Pump Payback

Free Heat Pump Payback calculator with clear step-by-step results.

About Heat Pump Payback

Heat pump economics turn entirely on the ratio between the electricity price and the fossil fuel price relative to the efficiency gain. A seasonal COP of 3.4 against an 82% boiler is a four-fold efficiency improvement, which only saves money if electricity costs less than four times the fuel it replaces.

Formulas

Existing running cost

Cost = heat demand / existing efficiency x fuel price

Heat pump running cost

Cost = heat demand / seasonal COP x electricity price

Worked example

With the default values below, Heat Pump Payback returns Simple payback of 22.53. Change any input above and every figure here is recalculated in your browser.

Inputs used

Installed cost of the heat pumpminimum 0 $: 14,000 $
Grant or rebate receivedminimum 0 $: 5,000 $
Annual heat demandminimum 0 kWh: 12,000 kWh
Efficiency of the system being replacedaccepts 20–110 %: 82 %
Price of the existing fuelminimum 0 $/kWh: 0.09 $/kWh
Heat pump seasonal COPaccepts 1–6: 3.4
Electricity priceminimum 0 $/kWh: 0.26 $/kWh

Results

Simple payback: 22.53 years
Annual running cost saving: $399.43
Net capital cost after grants: $9,000.00
Heat pump running cost: $917.65

Step by step

1Values used
2Existing running cost
3Heat pump running cost
4Simple payback= 22.53 years
5Annual running cost saving= $399.43
6Net capital cost after grants= $9,000.00
7Heat pump running cost= $917.65

Assumptions and limits

The result is derived only from the 7 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation or tax into account.
Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

Why can the saving be negative?

If electricity costs more than the efficiency ratio relative to gas, running costs rise. That is common where electricity is priced at four or five times gas per kilowatt-hour.

What SCOP is realistic?

Around 3.0-3.5 for a well-designed air source system on low-temperature radiators or underfloor heating, dropping to 2.2-2.6 if it has to serve high flow temperatures in an uninsulated house.