Heatpump payback calculator (total cost of ownership)

[TrystanLea]

One of the key criticisms of HeatpumpMonitor.org that I often hear is that SCOP does not necessarily reflect low running costs, or total cost of ownership. Some have even suggested that by encouraging optimising for SCOP among installers and customers we could actually be doing the industry a disservice that could hold back wide scale adoption!

That’s certainly an uncomfortable suggestion given that part of the intention behind HeatpumpMonitor.org is to show with real world data, not sales, how well heat pumps can work if installed, designed and commissioned well and that this should help increase confidence in the technology, aiding adoption.

Many have made the case that it is total cost of ownership that we should be optimising for. SCOP is just one variable alongside the price of electricity, installation cost and other factors. This does of course make total sense, though it does get more complicated to measure and define!

A while back Lewis Bowick who works at Energy Systems Catapult, shared a heat pump whole life cost calculator that is a great starting point for exploring this question. This calculator can be accessed here: Heat Pump Whole Life Cost Shared - Google Sheets (Lewis has shared this in a personal capacity, this is not an ESC work output).

The tabs at the bottom give different examples, current contex, unsubsidised, financed etc:

I think it would be great to extend this tool to breakdown installation cost into:

• Cost of outside unit
• Cost of hot water cylinder
• Cost of any pipework and radiator upgrades

It would be great to allocate labor based on these categories and include an estimate for replacement lifetimes.

When would the gas boiler comparison case require replacement pipework and radiators and how does the cost of upgrading that compare at that point to a lower temperature system?

The cost of equipment also varies considerably by brand, A samsung gen 6 costs about £2k, A vaillant ~£4k and a Viessman around ~£6k I think. How does longevity vary and long term servicing costs? The cost of labor, the amount of time and attention to detail given to the project and service level also varies by installer. How do we avoid boiling everything down to an oversimplified installation cost with a race to the bottom. The amount people decide to spend on cars for example varies significantly based on make/model/brand even if in a basic sense they all do the same job…

Should we include a form entry option for installation cost on HeatpumpMonitor.org? I wonder if we could explore a couple of examples in this thread before we do that. E.g installation cost, running cost and SCOP and the interaction between these?

My own example is complicated by the fact that I did the work myself and didnt count how many hours I spent installing the system Equipment cost was ~£4.8k in 2017 (5 kW Ecodan £1.8k, Cylinder £1k, Radiators and pipework ~£1k, other bits ~£1k) I get a SCOP of 4.1 and unit cost of heat last 12 months of 4.4 p/kWh (18 p/kWh electric).

I explore in my blog here https://trystanlea.org.uk/original-heating-system how the annual saving from upgrading my radiators (without which my SCOP would probably have been ~3.4) likely makes for a surprisingly long payback, e.g only a saving of £84/year or £1680 over 20 years. At some point a radiator system will need replacing anyway and the cost difference in going for a low temperature system at that point will of course be much lower! Understanding the point at which that needs to happen and taking that into account is probably a key part of this question.

Hopefully this is useful as a starting point for a discussion, it would be great to explore what we could do as part of HeatpumpMonitor.org to provide more insight on total cost of ownership and how to balance SCOP/SPF against the other factors.

[TrystanLea]

Please post below, if your happy to share:

• Installation cost (breakdown if available between heat pump and radiator upgrades).
• SCOP/SPF
• Unit price of heat and electric
• kWh heat and electric

Any other comments also welcome of course!

[TrystanLea]

Damon Blakemore has already publicly shared the details for the top performing system:

• Linked in post, £17.5k before grant for the heat pump. £33k including solar PV and batteries (Everything you need to know about installing a heat pump in your home).
• SPF: 5.0
• Unit price of heat on Agile 3.77 p/kWh (not including solar PV and battery)
• Unit price of electric for heat pump 19.0 p/kWh (based on HeatpumpMonitor.org agile calculator) (not including solar PV and battery) .
• Actual total household electricity bill -£32 a year, yes minus! Based on exporting at high export rate agile tariff times I assume? So actual cost of elec and heat is zero if you assume export earnings offset import costs at other times.
• Heat pump heat demand: 17868 kWh/year
• Heat pump elec demand: 3542 kWh/year
• Total house electric demand: ?

Perhaps the whole lifetime cost calculator needs to have the option to include Solar PV and batteries…

[meatballs (Ben)]

Solar/battery aren’t reflected in the energy costs from the heatpump monitoring and subject to their own payback periods so I wouldn’t include tbh.

https://emoncms.org/app/view?name=Altherma&readkey=dfb6fbf82b5eb4f396ba1e8acb146d66

£8328 for UFH install
£13476 for HP ( £8860 HP/labour, £2250 cylinder, £2200 upstairs rads )

-£5000 BUS
-£2000 Barclays Greener Home Reward

3.76p/kWh on Agile
SPF: 4.05

[TrystanLea]

Thanks Ben!

[Timbones (Tim)]

System #1 - Mitsubishi Ecodan 11.2 kW - installed Dec 2021, metered from Feb 2022

• Air Source Heat Pump £12,988 + Radiator Upgrades £2,594 (total £15,582)
• RHI will pay me around £9,000 over 7 years, based on metered heat
  (13p per renewable kWh - adjusted for CPI)

Stats for last 365 days: consumed 3,316 kWh, produced 12,509 kWh, SPF 3.77.

Total running cost £482 at 14.5p/kWh electric, 3.85p/kWh heat (on Agile with battery)
compared to current price cap cost of £780 (23.5p/kWh electric, 6.23p/pkWh heat)
vs. equivalent gas cost £990 @ 6p/kWh + 30p/day (assuming 85% efficiency)

There’s an additional cost for metering but that’s covered by MMSP scheme.

[TrystanLea]

Thanks @Timbones

Anyone with any <£3k after BUS grant Octopus installs on here? @KnightPhoenix @matt-drummer @scanfer @Rob-G?

@Rachel would be interesting to hear your thoughts on the above too!

[matt-drummer (Matthew Gregory)]

I wish

Mine was £11,600 before the grant and I got BUS grant of £5,000

I paid for a 9kW and ended up with an 8kW, not really sure whether I have underpaid or overpaid!

Radiator upgrades cost me £6,000

Monitoring, maybe £1,000

I have solar and a large amount of battery storage.

My net energy cost after paying for imports, standing charge, my wife’s car charging and heat pump servicing is (minus) £450pa - that is an income.

I buy practically all my electricity at 7p on Intelligent Octopus Go

My SPF is currently 5 and rising, I would expect the SPF for 12 months to be over 5

So, my heating cost is 1.4p per kWh and if I take into account battery charging and discharging losses maybe 1.8p per kWh

[scanfer (Simon Canfer)]

Our Octopus install cost £2100, quoted in June and installed in December 2022. Certainly the first one they did in Swindon and a loss-leader I expect. The grant was £5000 back then.

[KnightPhoenix (Zak Wilcoxen)]

Same sort of boat here

£7,584.58 for my install and the breakdown is below

Also add on £1k for the OEM equipment and another £200 for the cabling and meter to make this into full smart grid (no labour as I got octopus to do it).

The additional radiator swaps (to allow us to run at 38°@ -3) and re-pipe to fix the issues post install were all free from octopus as was the swap out for the 8kW unit. This is potentially offset by the lower cost of the smaller unit up front has the survey been correct.

Over the last month my cop has been 5.1 for space heating and 3 for DHW but I do not always aim to maximise cop or run in the cheapest tariff.

During winter with limited excess solar we will run space heating in weather compensation (maximising cop) and DHW based on a 15°c hysteresis and reheat only. If we have excess solar and the battery is full we will go into buffering mode and overheat the DHW and house (reducing COP but using as much of our generation as possible).

This is neither the most COP efficient or the most financially efficient but I feel is a greener alternative and should help to minimise the effects of the duck curve during peak solar.

We are on the flux tariff so

02:00 - 05:00 - 15p
05:00 - 16:00 - 25p
16:00 -19:00 - 35p
19:00 - 02:00 - 25p

Based on 25p average and a cop of 4.5 my cost per kWh is 5.5p (it is almost always lower than this as I run if battery fully during peak and most days).

If I had an EV and maybe a second battery I could drop this further however, I do find the whole ROI / payback discussion a bit backwards.

I would want a low temperature heating system (new rads and pipework) regardless of if I got a boiler / ASHP / nuclear reactor so the cost of radiators/ re-pipe and the DHW cylinder was needed anyway.

Our boiler was a non condensing one who was continuing to make noises suggesting it would soon be “pining for the fjords” and the old 1970’s radiators were sub optimal at best so there was going to be expense either sooner or later.

The one thing to remember here is if the system is designed and installed by skilled engineers your home should be more comfortable and a more stable temperature so what price / ROI do you allocate to that.

When asked I compare my ASHP to my bathroom renovation a year previous. It cost us a chunk of cash but it is an investment in the house that was needed.

Will either pay for themselves fully, honestly unless I sell the house before they need replacing probably not. Do I like the outcome and will I get enjoyment from it, Yes.

What really gets me is if I asked for ROI figures on a combi boiler or a new system boiler I would likely be laughed off by the same folk who complain about “poor ROI” on an ASHP.

[MikeEvans]

My Octopus install was £1270 all in (after the £7500 grant), for a 4kW Daikin, 7 new rads, new cylinder, volumiser, 3 port valve etc. I didn’t get a complete breakdown.
Installed mid January this year, so I don’t have the full year for SCOP/SPF, but I’m getting a COP > 4/4.5 for DHW/heating over the last month

Annual electric use before the heat pump was around 2800kWh/annum, and since the end of March the heat pump has apparently used around 330kWh for 1170kWh of heat.

I’m less interested in the SCOP and more interested in £/annum, and personally don’t like it too warm - I’m sure my figures would be better if I was prepared to pay for and live in an uncomfortably warmer house. Having a solar/battery system, I’m on a tariff that gives me cheap electricity 00:00-07:00, and am currently in the early days of experimenting with trying to run the heat pump hard during the cheap period and letting the house cool down again during the day. If that works out, it’ll only be 6.7p/kWh electricity, and <1.7p/kWh for heat.

[ectoplasmosis]

ASHP: Vaillant Arotherm Plus 7kW, 250L Vaillant tank, no buffer or volumiser, ~3m outdoor primary pipes buried under patio.

Total cost: £4.3K after £7.5K BUS grant.
Installer: Next Step Heating

Radiator upgrades: this was part of the extension and retrofit works, so the entire previous ancient gas heating system, including all radiators and pipework, was condemned and ripped out. Wet UFH installed in the new kitchen extension and 1st floor bathroom, included in the cost of renovation. 10x new rads (Stelrad K2/K3) were installed by a third party plumber based on a spec devised by the ASHP installer and myself, with all-new insulated pipework throughout, at a cost of ~£3.5K including labour. Whole-house MVHR system installed as part of retrofit works.

Tariff: Octopus Tracker, ~20.5p/kWh average.

Monitoring limited to Vaillant app, which is showing a combined heating and DHW CoP of 6 since late August. Not sure if I trust this figure so far.

Indoor temp setpoint: 21degC, running in pure weather compensation mode 24/7, no setback periods. Actual indoor temp hovers ~22degC, which is too high but the house needs drying out after the building work.

Total electric energy consumed by ASHP system for both heating and DHW since 20th August 2024: 492kWh

Comfort levels are off the charts compared to the draughty, unheatable old iteration of the house with a creaky old gas boiler, and monthly bills are less than half so far. I would however have gladly accepted an increase in running costs to achieve the comfort and quality of life upgrades.

[TrystanLea]

Thanks all, great examples!

[Rob-G (Robert)]

You might regret asking me this question. I could talk for days on this topic.

Let’s address my install 1st.

So it was about £7k after the £5k BUS grant. So with the current £7.5k grant under £4.5k. There are lots of extra’s I needed that I’m not sure it’s fair to include.

1. The hot water tank. Is it fair to include the cost of this, it’s a one off that I would have needed if I swapped from a combi to a system boiler?
2. Increase in radiator size, again a one off. According to part L any new heating systems should be designed to run at low flow temps. Also, condensing boilers need to be below 50 degree flow to condense and have weather compensating controls(cost £150 for my old Greenstar) so if people are going to throw around the 90% efficiency figure when comparing to heat pumps then theses cost should be added in.
3. On initial install I had a long exterior run of 28mm pipework which has been removed when I moved the heat pump so was unnecessary extra cost that hopefully most would not need.
4. I think the 8kW is probably about £500 cheaper than the 9kW?

When you add all those together and take them off you could be talking about a sub £3k install.

To address my running costs. My home needs about 6000 kWh of heat annually.
So with a gas boiler at 90% efficiency that’s 6,666kWh(pretty close to my actual usage) of gas at 5.8p per kWh = £386 a year.

With regards electricity cost I do have a home battery and smart tariff.

I charge off-peak at 7p per kWh hour so if I hit my target SCOP of 4 about £105 in electricity.

The extra cost of the battery to cover the heat pump usage is offset by extra export in the summer and additional demand flexibility payments.

I’m not even sure if we should include battery costs as when V2H is common place we will all have 40-60 kWh batteries sat on our driveways.

To address the more general question about whether focusing on SCOP is the wrong approach.

The answer is like most of life’s big questions ‘it depends’.

If you are an average UK consumer you will probably be on a price cap tariff (Only 60% of UK properties even have a smart meter). In this situation a good SCOP is the only way your HP can be cheaper than a gas boiler.

I would say most HP owners currently are not an average consumer and will be on a smart tariff of some type, probably have solar, storage, and possibly an EV this will affect their average unit price significantly.

Another thing to consider is govt. policy. I suspect there will be a significant move by policy makers in the UK that will impact UK gas and electricity prices.

For example if they extended the carbon pricing on gas to include homes to reflect the impact gas boilers have on climate change, but I suspect this is unlikely. I suppose they could remove the carbon cost from the price of gas burned in CCGT to provide power for technologies like heat pumps but again I suspect this would be unlikely.

What I think is more likely is regional pricing for electricity which will bring down electricity prices significantly and make heat pumps a no brainer.

Well as I said I could talk about this for days but will stop here

[Timbones (Tim)]

One way to make COP more relatable is to turn it upside down: 1/COP represents how much electricity is needed for 1 kWh of heat. This much more clearly shows the diminishing returns of chasing performance.

• 1/3.0 = 0.33
• 1/4.0 = 0.25
• 1/5.0 = 0.20

Simply multiply by unit price to get cost of heat, multiply again by annual heat for total cost.

[dmajwool (David Woolley)]

@KnightPhoenix

What really gets me is if I asked for ROI figures on a combi boiler or a new system boiler I would likely be laughed off by the same folk who complain about “poor ROI” on an ASHP.

I feel the same: Like many here who spend money on this kind of tech, we do so without looking to maximise ROI. My motivation is to reduce my fossil fuel consumption as far as I can.

Perhaps ROI conversations aren’t the best starting point. If challenged, I reply asking what was the ROI on your last holiday / theatre trip / restaurant meal? Some activities are put in different parts of a budget and escape scrutiny.

As I see it the bigger challenge is for HP manufacturers to wake up and deploy control systems that can continuously self-configure to operate more and more efficiently. These next-gen systems would survive contact with the mass-market in a way that HPs discussed in this forum do not seem to be doing. We end users are forever tinkering with settings and menus, doing things that the HP could and should be doing for itself - adapting to the installed emitters, the internal environment and the weather in real-time. Surely, continuing iteration is what AI is designed to do - but I don’t see evidence of any AI in my Daikin system. Shame.

[John (John Gouk)]

@dmajwool

As I see it the bigger challenge is for HP manufacturers to wake up and deploy control systems that can continuously self-configure to operate more and more efficiently. These next-gen systems would survive contact with the mass-market in a way that HPs discussed in this forum do not seem to be doing. We end users are forever tinkering with settings and menus, doing things that the HP could and should be doing for itself - adapting to the installed emitters, the internal environment and the weather in real-time. Surely, continuing iteration is what AI is designed to do - but I don’t see evidence of any AI in my Daikin system. Shame.

Totally this. However, having suggested the use of Machine Learning (it’s not AI) for this purpose to people I know, the response was laughter followed by something on the lines of “you mean something actually hard?!”. Given their large install base and the relative ease of collecting data from Daikin HPs, you’d think it would be something Octopus could work on as a USP. I wonder how Homely works?

[billt (Bill Taylor)]

Perhaps ROI conversations aren’t the best starting point. If challenged, I reply asking what was the ROI on your last holiday / theatre trip / restaurant meal? Some activities are put in different parts of a budget and escape scrutiny.Blockquote

For you or I who are interested in the technology, possibly. But most people aren’t interested in the technology, they just want to keep their homes warm as cheaply as possible and cost is a completely justifiable consideration. If you have to pay £5,000 more for a heat pump than a replacement boiler most people will think very hard about it and ROI becomes relevant.

The justification for hoildays/kitchens is completely different from that of heating systems. Holidays and kitchens are things that people, apparently, enjoy in themselves, so cost is a secondary consideration. Most people don’t particularly enjoy heating systems so they are generally unwilling to spend large sums of money on them.

We end users are forever tinkering with settings and menus, doing things that the HP could and should be doing for itself - adapting to the installed emitters, the internal environment and the weather in real-time. Blockquote

Speak for your self. Once my system was setup it runs itself with no input from me, just using the Samsung controller. I can’t see the need for complex control systems if you can do without them. (Speaking as someone who used to use a Drayton WIser system with every room controlled separately.)

My ASHP system ended up being very costly and the money will never be recovered, just like the money spent on PV and 80kWh of batteries. But I like playing with this stuff; it’s an expensive hobby.

[greentangerine (Nick Ireland)]

I just use Auto Adaptation on my Mitsubishi and leave it alone to sort everything out.

Works for us - we want a warm house and hot water available on demand.

[Andre_K (André Kühne)]

I have a 10kW Arotherm plus + indoor unit with backup heater, 300 l DHW cylinder and 100l volumizer installed by Aira. The original quoted price was 27.5k€. As they decided after the quote that I needed the 10 kW unit instead of the 7kW (I don’t, different story), they upgraded me for free so the 27.5k was for a 7kW unit. I also got three radiators replaced.

In the initial talks they hinted at additional available subsidies from the state. As the confirmation for these took forever, they offered to lower the price by 20% if I greenlighted the install immediately. That dropped the price to 22k.

In Germany in 2023 I could get back 40% of that from the state (different program than above), so in the end I paid around 13k€ for the install.

This was by far the best offer I got. Octopus, Enpal, independent installers all quoted 30-35k€.

Running costs are pretty good. I’m looking at around 3000-3500 kWh electrical for both heating and DHW for 125 m². I don’t have sufficient data for a full view of COP, but it’s going to be around 4.5 for heating and 3 for DHW.

Electricity ia 31 cents/kWh, gas would be around 8-10 cents/kWh currently so with my COP I’m definitely running cheaper than gas.

Price for a new gas heating was also quoted around 13k€ and I had to replace it that year, so I’ll definitely save money in the long run - but probably only because I got the heat pump for a comparatively low price.