Energy efficiency
Heat pumps and EPC ratings: what you need to know
6 min read · Updated May 2026
Heat pumps are increasingly appearing on EPC improvement recommendations — and for good reason. They can push a property's EPC rating into the A or B band more reliably than almost any other single improvement. But they're also the most expensive and most misunderstood improvement on the list.
Here's what a heat pump actually does to an EPC rating, when it makes sense, and when it doesn't.
How heat pumps affect EPC ratings
Heat pumps run on electricity rather than gas. Because electricity is a “higher quality” energy source in the SAP methodology — and because heat pumps are typically 2–4x more efficient than gas boilers (they move heat rather than generating it) — the EPC calculation rewards them heavily.
The typical rating improvement from replacing a gas boiler with an air source heat pump in a well-insulated property is 15–25 SAP points — often enough to jump two bands. A C-rated property can reach A or B.
However: a heat pump in a poorly insulated property will perform less well and the rating improvement will be lower. The SAP methodology accounts for this — insulation quality affects the calculation.
Is your property suitable?
Heat pumps work best in properties that meet most of these criteria:
- Well insulated — loft and walls insulated, ideally to modern standards. Heat pumps run at lower temperatures than gas boilers and need a well-insulated envelope to work efficiently.
- Adequate outdoor space — an air source heat pump unit is roughly the size of a large air conditioning unit. It needs to be sited outside with good airflow, away from neighbours' windows.
- Larger radiators or underfloor heating — heat pumps work at lower flow temperatures (45–55°C vs 70–80°C for gas). Standard radiators sized for a gas boiler may be undersized and need upgrading.
- Detached or semi-detached — harder to install in flats or terraces with restricted outdoor access
- Not on gas, or planning to come off gas — the financial case is strongest where there's no gas connection to maintain
What it costs
| Item | Typical cost |
|---|---|
| Air source heat pump (supply + install) | £8,000–£15,000 |
| Radiator upgrades (if needed) | £1,000–£3,000 |
| Hot water cylinder (if not already present) | £500–£1,000 |
| Boiler Upgrade Scheme grant | −£7,500 |
| Net cost after grant | £2,000–£10,000 |
The running cost question
This is where heat pumps get complicated. Gas currently costs around 6p/kWh; electricity around 25p/kWh. Even though a heat pump uses electricity 3–4x more efficiently than a gas boiler uses gas, the electricity price premium can eat into those efficiency gains.
A well-installed heat pump in a well-insulated home will typically cost similar to or slightly more than a modern gas boiler in running costs at current tariffs. The government's target is to bring electricity prices closer to gas over time, which will improve the running cost case significantly.
Combined with solar panels, the running cost picture improves substantially — you're running a heat pump partly on free solar electricity.
The Boiler Upgrade Scheme grant
The government's Boiler Upgrade Scheme (BUS) offers a £7,500 grant towards the cost of an air source heat pump. It's available regardless of income, applied directly by the installer (you don't need to claim it yourself), and currently funded through at least 2028.
The only requirement is that the property must have a valid EPC with no outstanding recommendations for loft or cavity wall insulation. If the EPC recommends insulation improvements, you'll need to make those first before the grant is available — which is also the right order of operations anyway.
When a heat pump doesn't make sense
- Poorly insulated properties — efficiency suffers and EPC impact is reduced
- Flats with no outdoor space for the unit
- Properties with very old radiators that would all need replacing
- Where the primary goal is purely financial ROI — the payback period at current electricity prices is long
In these cases, fixing insulation first and replacing with a modern gas boiler is the more pragmatic short-term approach — with a heat pump as a longer-term upgrade.
The short version
- Heat pumps have the highest EPC rating impact of any single improvement — often 2 bands
- They work best in well-insulated properties with outdoor space
- The £7,500 Boiler Upgrade Scheme grant significantly reduces the cost
- Running costs are currently similar to gas — the case improves with solar panels and as electricity prices adjust
- Sort insulation first — it's a requirement for the grant and improves heat pump efficiency
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