For anyone buying or building a new home, the question of whether to opt for a heat pump may not even arise because it has become the norm. But for those in a slightly older, creakier home with a traditional oil or gas boiler, it will probably rear its head every time there is a four-digit bill for a replenished tank.
However, if you have a relatively new and functional gas or oil boiler, it doesn’t make sense to swap it for a heat pump, says Brian McIntyre, programme manager at the Sustainable Energy Authority of Ireland (SEAI). “Really you need to think about it when your boiler is eight or ten years old and nearing the end of its life.”
Where to start
The first step is to get a technical assessment to ascertain whether your home is more or less heat pump-ready. To get an SEAI grant for a heat pump you need at worst an “acceptable” level of heat loss from your home, otherwise it would not make sense to install.
“Your adviser will assess your heat loss and let you know if you need to do anything before putting in a heat pump,” McIntyre says. This might entail boosting your home’s insulation by, say, pumping cavity walls and insulating the attic.
Generally speaking, adds McIntyre, many homes built since the early 2000s will be adequate in terms of heat loss to have a heat pump installed. Anything older, however, is likely to need other preparatory work.
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Not everyone in an older home will need to do a big overhaul, according to Dominic Ó Gallachóir, founder of EcoPlus Surveyors.
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“Sometimes people will have done upgrades over the years and they add up. It might be that they just need one or two targeted measures such as attic insulation.”
A grant of €200 is available towards the cost of a technical assessment.
Installation costs
A heat pump installation typically costs anything from about €12,000 to €17,000, according to the SEAI. Your net cost will be quite a bit lower, however, once you take the grant of €6,500 for houses or €4,500 for apartments into account. But you are still looking at an outlay of €5,500 to €12,500.
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According to Bord Gais these estimates are appropriate for a home up to about 200 sq m; if you have a larger home it will inflate your bill. This also assumes you are getting the most common type of heat pump, an air-to-water device; if you choose a ground-source or air-to-air heat pump your costs will be higher.
The sizeable variation on cost depends on whether you need to get radiators or pipework replaced at the same time. “A house built in 2005 might have already replaced the original boiler for something more efficient and swapped out some radiators,” McIntyre says.
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“So you might literally just need to take out the boiler and put in the pump.”
This would be at the very lower end of the cost scale. Should you need to replace multiple radiators plus pipework, however, you will be at the upper end.
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As already mentioned, before you even touch a radiator or a pipe you may have to upgrade your home in other ways. If so, check out the “one-stop-shop” option whereby you can get everything done by one provider. You’ll find details, and a list of registered businesses, on seai.ie.
Running costs
According to Bord Gais the average running cost of a heat pump is €600 to €1,000 a year. If your bills are dramatically higher than expected, contact your installer, McIntyre advises.
Estimates on payback periods will depend on your initial outlay, how efficient your system is and energy prices. The past year or two have been particularly onerous for anyone heavily dependent on the grid. On the other hand, oil and gas users are paying more in carbon taxes year on year.
On the whole, the SEAI says, it is reasonable to expect to claw back your expenditure within about eight to ten years.
Ó Gallachóir says that with a well-designed and installed system you could get your money back in as little as six years. A poorly planned or fitted system could push the timeline out almost indefinitely, however. “If the job is not done right people can end up with the same energy bills as before, but having spent a load of money,” he says.
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Even if done right, a heat pump is not a “magic super saver”, Ó Gallachóir says, but it should be cheaper to run.
“When you read about heat pumps on forums you tend to only get the evangelists who say they are the greatest thing ever, or the people who have had problems,” he adds. The silent majority, he says, think heat pumps are “grand” and find them a bit cheaper to run.
A homeowner who bought a house in north Co Dublin in 2018 has found that their heat pump is good for heating large spaces. “It is good to always get up to a warm house when the weather is cold, and then when the weather is hot it keeps the house cool,” she says.
In terms of cost she reckons that it is definitely cheaper to run than oil-fired central heating. “However, we bought a new house with it already installed and I understand that to retrofit it can be expensive, so I couldn’t say whether it would have been a priority for us to do that or not.”
Is it worth it?
“If you have money sitting in the bank, not even keeping up with inflation, even a small saving per year by changing to a heat pump could make sense,” Ó Gallachóir says. If you would be borrowing money to do the job — and paying interest on the loan — it might make more financial sense to stay with your old boiler.
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Much depends on your assumptions about future energy prices, he adds. “The government has committed to increasing carbon taxes every year, so if you assume that oil is only going to get more expensive, even by today’s running costs [electricity prices] a heat pump does look more favourable.”
Finally, Ó Gallachóir says, you need to consider the efficiency of the system you install. “You might get efficiency of 250 to 300 per cent, but a really well-designed and installed system could yield closer to 400 to 450 per cent,” he says.
A system with a 300 per cent efficiency rate essentially means that for every unit of electricity it uses, it puts out three units of heat. A new gas or oil boiler, says McIntyre, is about 90 to 95 per cent efficient.
Green loans
Homeowners should soon be able to avail of low-cost loans off the back of an arrangement between the government and the European Investment Bank to meet the cost of heat pump installation and other energy-saving measures.
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The home energy upgrade loan scheme will offer unsecured loans of €5,000 to €75,000 over up to ten years for grant-eligible work. They are expected to come with “significantly lower” interest rates than currently available for loans of this type. The precise rates have yet to be confirmed. At the moment the annual percentage rate on Bank of Ireland’s green home improvement loan is 6.5 per cent.
The scheme will be delivered by the Strategic Banking Corporation of Ireland, which launched an open call for the expression of interest to select suitable lenders. According to the Department of the Environment, Climate and Communications, further details will be available when the scheme is launched and “it is anticipated that the loans will be available” in the first quarter of this year.
