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How does a heat pump work and is it cheaper than a gas boiler?

A heat pump moves heat instead of burning fuel, so it can be more efficient than a gas boiler, but whether it costs less to run depends on efficiency, fuel prices and the heating system it works with.

Updated 2 hours ago6 min readVersion 2
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Covers: Explains the basic refrigeration cycle behind air-source and ground-source heat pumps, then compares running costs with a gas boiler using current efficiency figures, electricity and gas prices, and typical UK home heating demand. Covers running costs and efficiency, not installation quotes, grant eligibility, or detailed system sizing.

Also answers: Are heat pumps cheaper to run than gas boilers? · Heat pump vs gas boiler running costs · How does an air source heat pump work? · Is a heat pump worth it compared to a gas boiler?

Outdoor heat pump unit next to a brick building
Photo: alpha innotec

The short answer

Interpretation AI-prepared starting map

A heat pump moves heat rather than burning fuel to create it, so it can deliver more heat energy than the electrical energy it consumes. In a vapour-compression cycle, a gaseous refrigerant is compressed so its pressure and temperature rise; the warmed gas gives up heat to the indoor space and condenses to a liquid; the liquid then passes to an outdoor heat exchanger where the pressure falls, it evaporates, and its temperature drops, ready to absorb heat from outside again. Because it transfers rather than generates heat, it is more energy-efficient than heating by gas boiler. Whether it is cheaper to run than a gas boiler depends on the system's coefficient of performance (COP), the electricity price relative to gas, and the heating system it is paired with. One modelled transcritical CO2 air-source system in a solid-wall semi-detached UK house reached full-year system COPs above 3 in four UK locations, rising to 5.1 with solar panels, at a levelised cost of energy of 22p/kWh with a heat pump grant — lower than a gas boiler.12

What this rests on4 independent sources
  • Evidence 18
  • Interpretation 1

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In brief

  1. A heat pump moves heat with a compression cycle instead of burning fuel, which is why it is more energy-efficient than a gas boiler.1

    Evidence-backed
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  2. A modelled CO2 air-source system in a UK solid-wall semi-detached house reached full-year system COPs above 3, or 5.1 with solar panels, at 22p/kWh levelised cost with a grant — below a gas boiler.2

    Evidence-backed
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  3. Running costs are not fixed by the hardware: optimised control of a ground-source system cut operational costs by 19% and raised winter system COP by 27%.3

    Evidence-backed
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  4. CO2 heat pumps need heating return temperatures of 30 °C or less to work effectively, so the existing heating system affects whether the efficiency and cost figures are reachable.2

    Evidence-backed
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  5. Ground-source heat pumps have broader modelled economic potential than thermal energy networks, which concentrate in dense population areas.4

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At a glance

The picture in numbers

Live · updated just now

One modelled system in a UK solid-wall semi-detached house
  • Without solar panels3 COP
  • With solar panels5.1 COP
Full-year system COP of a modelled CO2 air-source heat pump2
Modelled transcritical CO2 system in a UK solid-wall semi-detached house

22 p/kWh

Levelised cost of energy with a heat pump grant2
Field study of one heat-recovery ground-source system

−19%

The line marks the baseline it's compared with

Cut in operational costs from optimised control of a ground-source system3
Field study of one heat-recovery ground-source system

+27%

The line marks the baseline it's compared with

Rise in average winter system COP from optimised control3

The evidence behind it

4 sources
  • Other studies and data3
  • Background1

Published in 2024 and 2026

Sources on this page by kind and year
SourceKindYear
Heat pump (Wikipedia)BackgroundUnknown
Application of transcritical CO2 heat pumps to boiler replacement in low impact refurbishment projects.Other studies and data2024
Geothermal heat pumps and thermal energy networks: Technical feasibility and market adoption.Other studies and data2026
Sustainable performance enhancement of a heat recovery ground source heat pump system using field data and machine learning.Other studies and data2026

The community around it

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Before you decide

Which fits you?

Pick the situation closest to yours. Each answer says what it rests on.

If you want the simplest explanation of the technology

the vapour-compression cycle is the key: refrigerant is compressed to release heat indoors, then expands outdoors to absorb heat, and the same machine can run in reverse for cooling.1

Evidence-backed

If you are comparing running costs and have a well-insulated home with low-temperature heating

a modelled CO2 air-source system in a solid-wall semi-detached house reached full-year system COPs above 3 and a levelised cost of 22p/kWh with a grant, below a gas boiler.2

Evidence-backed

If your existing radiators run at high return temperatures

note that CO2 heat pumps need return temperatures of 30 °C or less to work effectively, so the system may need modifications such as using return fluid to defrost the outdoor exchanger and pre-heat inlet water.2

Evidence-backed

If you can add solar panels alongside the heat pump

the modelled system COP rose from above 3 to 5.1, improving the running-cost case further.2

Evidence-backed

If you are willing to invest in optimised controls and setpoint tuning

a ground-source field study saw winter system COP rise 27%, summer system efficiency ratio rise 21%, and operational costs fall 19% after optimisation.3

Evidence-backed

If you are considering ground-source rather than air-source

ground-source heat pumps are the more established geothermal option with widespread modelled economic potential, while thermal energy networks are concentrated in dense population areas.4

Evidence-backed

If you are weighing up a heat pump on environmental grounds as well as cost

the modelled CO2 system was calculated to save 9.45 tonnes of CO2 over a fifteen-year life compared with a gas boiler.2

Evidence-backed

The full story · 2 chapters

01

How a heat pump works

AI summary:A heat pump uses a compression cycle to move heat from outside into the home rather than burning fuel to create it.

Evidence-backed

Evidence-backed: A heat pump uses mechanical or thermal energy to move heat from one place to another rather than generating it by combustion. The common domestic design is a vapour-compression machine driven by electricity. A gaseous refrigerant is compressed, raising its pressure and temperature. When the unit is heating, that warmed gas flows to a heat exchanger in the indoor space, where some of its thermal energy is transferred to the room and the gas condenses into a liquid. The liquid refrigerant then flows to an outdoor heat exchanger, where the pressure falls, it evaporates, and its temperature drops — so it is cold enough to absorb heat from the outside air or ground. The cycle then repeats. In winter the machine moves heat from the cool outdoors into the house; in summer the same hardware can run in reverse to move heat from the house to the warmer outdoors, acting like an air conditioner.1

Evidence-backed

Evidence-backed: Air-source units take their heat from outdoor air; ground-source (geothermal) units take it from the ground or from thermal energy networks. Ground-source heat pumps are the more established of the two geothermal approaches and the modelling suggests they have widespread economic potential, while the newer thermal energy network approach is concentrated in densely populated areas. A field study of a heat-recovery ground-source system paired a conventional condenser with a heat-recovery condenser in one heat pump, recovering excess condenser heat to supply 50 °C hot water in summer while limiting soil temperature rise to about 0.45 °C.43

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02

Running costs compared with a gas boiler

AI summary:Efficiency and running costs depend on the system's COP, electricity versus gas prices, the heating system, and how the controls are set.

Evidence-backed

Evidence-backed: The core reason a heat pump can undercut a gas boiler is efficiency: it transfers heat instead of generating it, so it is more energy-efficient than heating by gas boiler. The practical measure is the coefficient of performance (COP) — heat delivered per unit of electricity used. A modelled transcritical CO2 air-source heat pump with a hydronic heating system in a solid-wall semi-detached house achieved full-year system COPs over 3 in four UK locations, and solar panels boosted this to 5.1. The levelised cost of energy for that system, calculated with a heat pump grant, was 22p/kWh — lower than a gas boiler — with 9.45 tonnes of CO2 emissions saved over a fifteen-year life.2

Evidence-backed

Evidence-backed: Efficiency is not fixed at installation. In the ground-source field study, a multi-objective optimisation framework combining a genetic algorithm and a backpropagation neural network with TOPSIS was used to predict performance and set optimal operating parameters. The optimised system raised average winter system COP by 27% and heat-pump COP by 11%, raised summer system and heat-pump energy efficiency ratios by 21% and 11% respectively, and cut operational costs by 19%. That suggests running costs depend heavily on how the system is set up and controlled, not only on the hardware chosen.3

Evidence-backed

Evidence-backed: One design constraint matters for the cost comparison: transcritical CO2 heat pumps need heating return temperatures of 30 °C or less to function effectively, which has held back their adoption with hydronic heating systems that run at high return temperatures. The study addressed this with system modifications external to the refrigeration cycle — using space-heating return fluid to defrost the air-source heat exchanger and to pre-heat inlet water, and recovering remaining excess return heat as a source for the heat pump.2

Evidence-backed

Evidence-backed: At a wider scale, the US modelling projects ground-source heat pump adoption reaching 251 GW-thermal by 2050 and thermal energy network adoption 31 GW-thermal by 2050 under high incentives and tax credits, with the authors noting that changes to costs and incentives can shift adoption and that uncertainty in cost structure produces large variations. This is a scenario projection for the US, not a UK running-cost estimate.4

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What to remember

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  1. A modelled CO2 air-source system in a UK solid-wall semi-detached house reached full-year system COPs above , or 5.1 with solar panels, at 22p/kWh levelised cost with a grant — below a gas boiler.

  2. Running costs are not fixed by the hardware: optimised control of a ground-source system cut operational costs by and raised winter system COP by 27%.

  3. CO2 heat pumps need heating return temperatures of °C or less to work effectively, so the existing heating system affects whether the efficiency and cost figures are reachable.

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When new evidence or a better source comes in, this page is updated (it's on version 2, last changed 2 hours ago). Follow it to be told when that happens.

Outdoor heat pump unit next to a brick buildingUp nextHeat pump or gas furnace: which should heat your home?For a typical home, is it worth replacing a gas furnace or boiler with a heat pump, and when does it make sense?

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Sources

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  1. 1
    Heat pump (Wikipedia)
    WikipediaPublished Oct 10, 2026Checked Oct 11, 2026
    “A heat pump is a device that uses mechanical or thermal energy to transfer heat from one space to another. The mechanical heat pump uses electric power to transfer heat by compression. Specifically, it transfers thermal energy by means of a heat pump and refrigeration cycle, cooling one space and warming the other. In winter, a heat pump can move heat from the cool outdoors to warm a house; in summer, it may also be designed to move heat from the house to the warmer outdoors, functioning in the same manner as an air conditioner. As it transfers rather than generates heat, it is more energy-efficient than heating by gas boiler. In a typical vapor-compression heat pump, a gaseous refrigerant is compressed so its pressure and temperature rise. When the pump operates as a heater in cold weather, the warmed gas flows to a heat exchanger in the indoor space, where some of its thermal energy is transferred to that space, causing the gas to condense into a liquid. The liquified refrigerant flows to a heat exchanger in the outdoor space, where the pressure falls, the liquid evaporates, and the temperature of the gas falls.”
  2. 2
    Application of transcritical CO2 heat pumps to boiler replacement in low impact refurbishment projects.
    Heliyon (Lambert & Dehouche)Published Mar 6, 2024Checked Oct 11, 2026
    “Transcritical CO2 heat pumps can achieve higher efficiencies, with higher output temperatures, than current, Carnot limited, synthetic gas heat pumps, with less environmental impact. Widely deployed in water heating and supermarket chilling systems, CO2 heat pumps need heating return temperatures of 30 °C or less to function effectively. This has impeded their adoption with hydronic heating systems which have high return temperatures. This study identified system modifications external to the refrigeration cycle that address return temperatures. It modelled a transcritical CO2 air source heat pump with a hydronic heating system in a solid wall semi-detached house. Full year system coefficients of performance over 3 were achieved in four UK locations by using space heating return fluids to defrost the air source heat exchanger and to pre-heat inlet water, recovering any remaining excess return fluid heat as a source for the heat pump. Solar panels boosted this to 5.1. The levelized cost of energy for the system was calculated (with heat pump grant) at 22p/kWh, lower than a gas boiler, with 9.45 tonnes CO2 emission savings over a fifteen-year life.”
  3. 3
    Sustainable performance enhancement of a heat recovery ground source heat pump system using field data and machine learning.
    Scientific reports (Cui et al.)Published Mar 31, 2026Checked Oct 11, 2026
    “The system parallels a conventional condenser and heat recovery condenser within a single heat pump, recovering excess condenser heat to provide 50 °C hot water during summer operation. Results demonstrate that the HRGSHP effectively limits soil temperature rise to ∼0.45 ℃ while meeting the air conditioning demand. To further enhance efficiency, a multi-objective optimization framework combining a genetic algorithm and backpropagation neural network (GA-BPNN) model with a technique for order preference by similarity to ideal solution (TOPSIS) is developed. This enables accurate energy performance prediction and optimal operational parameter setpoint determination. The optimized system achieved improvements, with average coefficients of performance for system (COPs) and heat pump (COPu) increased by 27% and 11% in winter, respectively, the energy efficiency ratios for system (EERs) and heat pump (EERu) increased by 21% and 11% in summer, respectively, and operational costs were reduced by 19%. This work provides experimental evidence and optimization guidelines for implementing HRGSHP systems in building applications.”
  4. 4
    Geothermal heat pumps and thermal energy networks: Technical feasibility and market adoption.
    iScience (Simpson et al.)Published Sep 9, 2026Checked Oct 11, 2026
    “Geothermal technologies, including geothermal heat pumps (GHPs) and thermal energy networks (TENs), are gaining traction as methods to efficiently meet heating and cooling loads. Changes to costs and incentives may impact adoption and can help support decision-making in effectively deploying GHPs and TENs. In this work, the updated distributed geothermal market demand (dGeo) model is used to analyze scenarios across the US demonstrating a range of economic potential and adoption for GHPs and TENs. We find that the more established GHP technology has widespread economic potential and adoption, while the newer TEN technology has economic potential and adoption concentrated in areas with dense populations. GHP adoption was projected to 251 GW-th by 2050 with high incentives and tax credits, while TEN adoption was projected at 31 GW-th by 2050. Uncertainties in cost structure translate to large variations in adoption, pointing to the importance of demonstration projects and cost-tracking efforts.”

How it changed

Published 1 time since Oct 11, 2026.

  1. Version 2Oct 11, 2026Live now

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  • How does the 22p/kWh levelised cost compare with a gas boiler under today's UK electricity and gas tariffs, and how much does the result move when the heat pump grant is excluded?

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  • What full-year system COPs are achieved in ordinary UK homes with existing radiators and high return temperatures, rather than in the modelled solid-wall semi-detached case?

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  • How much of the 19% operational cost reduction from optimisation is achievable in a typical installation without specialist machine-learning setpoint tuning?

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