Ground Source Heat Pump Prices

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Green Homes Grant - Extended until 31 March 2022
Last updated: 14 January 2021

How Much Do Ground Source Heat Pumps Cost in the UK?

Ground Source heat pumps

The ground source heat pump cost will differ from one project to another. The average ground source heat pump prices and installation costs are around £13,000–£35,000. The price would naturally vary depending on the system you select. Generally speaking, a horizontal system is cheaper than boreholes, as specialised equipment is not required. 

Ground source heat pumps (GSHP), also known as geothermal pumps, are widely known as environmentally-friendly investments that can help you save up £790 - £1425 per year on your heating bill when replacing an old electric system.

Despite the high cost compared to conventional heating systems, the Renewable Heat Incentive payments in the UK will help downplay the impact of the high initial price. The RHI payments are earned over the first 20 years of installing ground source heat pumps for commercial use, and over the first 7 years in the case of domestic use. 

The tariff rates are set at 10.18 p/kWh for air to water heat pumps, and 19.86 p/kWh for GSHP with payments made on a quarterly basis for 7 years.

If you want an estimation of the ground source heat pump costs, we recommend you to fill out the form on top of this page. You will receive up to four quotes from four different suppliers of heat pumps that fit your description. This service is free, without obligation, and takes only a few minutes.

Green Homes Grant Extended Until 2022

The Green Homes Grant, which provides homeowners and landlords with £5,000 - £10,000 vouchers for energy-saving renovations, has been extended for a year until 31 March 2022.

Ground source heat pumps are included under the primary measures of the grant scheme.

Read our guide about the Green Homes Grant for full details about how to apply.

Note: the Green Homes Grant is only available in England, and works can continue in all tiers under the current restrictions.

How Is the Total Price Determined?

The ground source heat pump prices vary on a range of factors, from the system design, the dwelling, and your energy use. The following key factors all affect how the total price is determined:

  • The size of the dwelling and its insulation level
  • The size of the heat pump system
  • The existing radiators or underfloor heating system
  • If it's a vertical or horizontal system
  • RHI payments

The heat pump installer will design a heat pump system based on the dwelling's level of heat loss, the level of energy consumption, the soil type of the property, and the domestic hot water requirements. This will help in choosing the accurate size of the heat pump and piping system design.

A well-insulated house will require a smaller heat pump and a smaller ground loop system, and therefore will be less pricey. 

In addition, the conditions of existing radiators or underfloor heating systems can affect the overall installation cost. If they are suboptimal, they may need to be replaced with new equipment entirely and this can increase the costs significantly. For this reason, GSHPs are typically more suited to new-builds rather than retrofits.

During the ground source heat pump installation, the piping for the ground heat exchanger may be laid in horizontal trenches if space is available, or in vertical boreholes if there is a limited amount of space.

Ground source heat pump costs and installation prices are generally higher compared to an air source heat pump. For example, the price to install an air source heat pump ranges from £8,000 to £18,000, while the total GSHP price including installation should range between £20,000 – £40,000.

Even if the ground source heat pump cost might place a strain on your budget, you still may save a great deal of money by ensuring your house is properly insulated. This will cut down the heating system operational costs, as well as reduce the capital cost, given that the capacity of the ground source heat pump, or the size of the ground collectors, can be scaled down in line with the reduced heating load.

However, it is important to evaluate the long-term value of this investment. The running costs of a heat pump, such as a ground source heat pump, are lower compared to other renewable heating systems. Once installed, the ground source heat pump piping system has an estimated lifespan of 50-100 years, while the heat pump itself can run for 20-25 years. Finally, ground source heat pumps require low maintenance after installation.

The table below outlines rough price estimates of vertical and horizontal GSHP systems.

Vertical vs. Horizontal GSHP Price and Installation
Number of bedrooms Capacity of GSHP (kW) Price of heat pump and installation  Price of Horizontal Groundwork Price of Vertical Ground
3 11 kW £15,750 £3,750 £9,750
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Price Breakdown: Equipment vs. Non-Equipment Costs

In a report by the Department of Energy and Climate Change, an illustration of the ground source heat pump price structure was developed.

The illustration considers a 90 kW ground source heat pump as a base case for scoping the equipment vs. non-equipment price breakdown. This example is used to also compare smaller projects and larger-scale project costs.

The non-equipment prices for a 90 kW retrofit ground source heat pump are slightly higher than the equipment price, mainly due to the drilling, boreholes, and groundwork (~60% of this cost) as well as the added complexity in the design and specification process.

GSHP Prices

As you can see in the figure above, 51% of the total price of ground source heat pump installation is non-equipment costs, of which 60% is the price of drilling and groundwork. The price of the heat pump itself and complementary equipment accounts for 49% of the total ground source heat pump price.

Below is a detailed breakdown of the ground source heat pump installation cost in the UK.

GSHP Price and Cost

Source of cost breakdown: Department of Energy and Climate Change, 2016 

Considering smaller ground source heat pump installations, let's say 12 kW system, the overall price will be approximately 10-20% per kW higher than the 90 kW system. 

The ground source heat pump price per kW will be higher than for 90 kW in this case because many of the same parts, such as sensors & transducers, are used in a smaller system as in a large one – but are then proportionally a larger part of the total price.

Additionally, in the case of ground source heat pump borehole cost for installation, the price per metre of groundwork for the 12 kW system will also be higher than for a 90 kW system. This is because the costs to start up the drilling are the same whether for a small or large ground source heat pump installations. However, the costs of the groundwork needed for installing horizontal trenches is lower than for boreholes.

In the case of larger ground source heat pump installations, let's say 600 kW system, the overall price will be approximately 15% per kW higher than the 90 kW system. The split between equipment/non–equipment cost is 45:55 in this case.

In larger ground source heat pump installations (i.e., above ~250 kW), the non-equipment price will include groundworks (including drilling), design, project management, commissioning, and labour.

What Are the Costs with RHI Payments Included?

In order to illustrate the actual cost and installation prices, we use the example of a 3-bedroom house with an annexe. Let's assume that the house requires a heat load figure of 32,000 kWh per year for space and hot water heating. This house would need a GSHP with a capacity of 12kW and a mix of fan-assisted radiators and underfloor heating. This system would cost around £33,000 - £37,500.

However, the owner would earn £19.64 for every renewable kWh (minus the initial electrical input) under OFGEM’s Renewable Heat Incentive (RHI) scheme. 

The RHI's estimated annual payments are £2,630 - £4,070 per year. This scheme is a measure of the UK government's Green Deal, which is a financing mechanism that incentivises people to adopt energy-efficient means of generating energy - and saving on their bills, too!

Renewable Heat Incentive (RHI) Payback on GSHP Installations
Traditional Fuel Replaced Payback Period with RHI Payback Period without RHI Estimated Annual Payments 
Direct Electric Heating  6-8 years 12-18 years £2,610-3,940
New Oil Boilers 12 years 29 years £2,610-3,940
New Gas Boilers 14 years 47 years £2,610-3,940

Source: Local Government Association (2016)

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What Are Excavation and Borehole Costs?

The ground source heat pump cost of installation is high due to the expensive excavation work required. To install the heat pump loops, deep trenches or boreholes need to be dug.

The heat pump loops are buried either horizontally in a shallow trench (at a depth of 1.0m – 2.0m) or vertically in a borehole that can be 50m-150m deep.

The ground source heat pump cost for drilling and lining a borehole might range from £60 to £100 per metre, depending on the local geology.

If the ground source heat pump system design requires the installation of vertical loop system, one or several boreholes need to be installed. The total costs of the ground work and borehole installation depend on the following factors:

  1. The borehole depth.
  2. The underlying geology and hydrogeology of the site.
  3. The design and construction method of the borehole.
  4. The proposed location of the borehole on the site.
  5. The borehole pipes diameter.
  6. The borehole fitting materials.
  7. The type, make and model of the heat pump selected.

Ground Source Borehole Drilling

How Much Can You Save on Bills with a GSHP?

According to the UK’s Energy Saving Trust, the extent of savings on your heating bills will depend on which heating system you are switching from. Hence, your savings will be affected by:

  • The heat distribution system you will be using
  • The costs of fuels you are replacing
  • Replacing an outdated heating system with a new and more efficient one
  • The way you operate the heat pump

Below we present the savings you can expect to get by replacing an old heating system with a new ground source heat pump system in an average 4-bedroom detached house.

England, Scotland, and Wales
Existing system Fuel bill savings (£/year) Carbon dioxide savings (kgCO2/year)
Gas older (noncondensing) £440-660 2,100-3,300 kg
Electric (old storage heaters) £790-1,425 6,700-11,700 kg
Oil older (noncondensing) £130-220 3,000-4,700 kg
LPG older (noncondensing) £960-1,500 2,800-4,500 kg
Coal £590-990 7,600-12,100 kg

*Source: UK Energy Saving Trust

Northern Ireland
Existing system Fuel bill savings (£/year) Carbon dioxide savings (kgCO2/year)
Gas older (noncondensing) £210-355 2,100-3,300 kg
Electric (old storage heaters) £765-1,440 6,700-11,700 kg
Oil older (noncondensing) £25-35 (loss) 3,000-4,700 kg
LPG older (noncondensing) £1,115-1,735 2,800-4,500 kg
Coal £500-860 7,600-12,100 kg

*Source: UK Energy Saving Trust 

New Customer Protection Regulations

Ofgem introduced new customer protection regulations on 15 December 2020 that will support customers that are struggling to pay for their energy bills.

The regulations will protect those that are vulnerable and temporarily unable to pay their energy bills in the form of more appropriate credit management policies and sustainable repayment plans.


Are You Ready to Invest in a GSHP?

If you have decided to purchase a ground source heat pump, but you are not sure which type you would like, we are ready to help you. Fill out the form on this page with your personal preferences and information, and we will provide you with up to four different ground source heat pump quotes from top suppliers. It is free and without obligation! 

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Written by Attila Tamas Vekony UX Manager Attila is the UX Manager at GreenMatch. He holds a degree in international business with four years of coordination experience in marketing, user experience, and content creation. Attila likes to write about solar energy, heating technology, environmental protection, and sustainability. His and his team's articles appeared in well-known sites such as The Conversation, Earth911, EcoWatch, and Gizmodo.
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