A new report by the Regulatory Assistance Project (RAP) has shown that the ever-increasing prices of fossil fuels means that gas boilers are become more expensive to run. The analysis below shows that, with an efficient heat pump, households can now save up to 27% on their heating bills compared to a gas boiler.
Key Findings
Household gas prices are on the rise and increased by another 84% in April. Electricity prices have risen too, but not as much as gas. This means that renewable heating technologies such as heat pumps are now much more competitive. The analysis below shows that, with an efficient heat pump, households can now save up to 27% on their heating bills compared to a gas boiler. Heating with a gas boiler will cost households £934 per year, up from £579. A very efficiency heat pump will only cost £723 per year, up from £536 per year. For an average household, this is a saving of £261 per year. With government looking to shift green levies from electricity to gas, heat pumps will become even more financially attractive.
Analysis
Ofgem Price Cap
Following Ofgem’s price cap announced in February, domestic gas and electricity prices increased significantly in the UK in April. The maximum unit costs for gas increased by 84% and electricity by 35% (£0.07kWh for gas and £0.28/kWh for electricity, up from £0.04/kWh and £0.21/kWh, respectively). Electricity prices are now four times higher than gas whereas, under the current price cap, electricity is about five times more expensive than gas. This has clearly affected the running costs of heat pumps compared to gas boilers.
Importance of Efficiency
The most important parameters that determine the running costs of a heating system are the overall heat demand, the efficiency of the system and the price paid for fuel.
Using the most recent figures available, the graphic below shows when it is cheaper or more expensive to heat with a heat pump compared to a gas boiler. The figures are based on the coefficient of performance, or COP, a measure of the ratio of electricity used to the heat extracted from the environment. A COP of 3, for example, means that you get three units of heat from one unit of electricity. The data shows that, with a COP of about 3, a heat pump starts to become cheaper to run than a gas boiler, which in most cases runs at an efficiency of about 85% as explained below. In the past, a COP of around 3.7 was required to achieve the same running costs as a gas boiler
Image from ‘Analysis: Running costs of heat pumps versus gas boilers’, by Jan Rosenow of the Regulatory Assistance Project
Design & Quality Installation Are Key
What this report shows is that in order to delivery energy cost savings it is important that the heat pump achieves a critical level of efficiency. This is where Alto Energy can help. In order to deliver efficient performance, a heat pump needs to be properly designed and well installed.
Design
Every single heat pump commissioned by Alto Energy has been designed and approved by our highly-experienced technical team. Alto Energy’s technical director Dave Webb has nearly two decades experience designing heat pump systems, making him one of the most experienced heat pump designers in the entire heat pump industry. Dave personally signs off on every heat pump project that we do, which gives customers entire peace of mind that the heat pump has been designed with optimal efficiency in mind.
Installation
Alto Energy’s unique network of local installers ensures that you get all the benefits of a local installer, alongside all the benefits of a nationwide company. All installations are completed by an Alto Assured Partner Installer, who was been trained and vetted by us. Installers work to Alto Energy’s specification and schematics, with as much telephone support as they need through the process. This provides the customer with assurance that the installation is being carried out properly.
Set To Work & Commissioning
One of Alto Energy’s employed engineers will complete the installation, set the heat pump to work and commission it. This involves a thorough quality control inspection, as well as optimising all of the settings on the heat pump so that it performs as efficiently as possible.
Contact Us Today
Contact us today to find out how much you can save on your heating bills.