Heat Pump Payback Calculator
Find out how long your heat pump takes to pay back its installation cost through heating savings. Enter your current annual heating cost, expected heat pump running cost and installation price to see payback period, lifetime ROI and net savings.
Don't know your expected running cost yet? Use the Heat Pump Running Cost Calculator to estimate it first →
Quick Start
Tip: Get your expected heat pump running cost from an installer or from the Heat Pump Running Cost Calculator. This calculator handles the financial payback only — no COP or system sizing.
Project
System & Installation
Heating Costs & Savings
Inflation applies to the annual saving difference. Both current heating costs and heat pump running costs are assumed to rise at the same rate, preserving the saving differential over time. Annual maintenance is kept flat and is not inflation-adjusted.
Common heat pump payback questions
How long does a heat pump take to pay back?+
Typically 5 to 15 years, depending on the fuel being replaced, installation cost, grants and local electricity prices. Switching from oil or LPG in a well-insulated home often achieves payback in 6 to 10 years. Switching from gas may take 10 to 15 years without grants.
What grants are available for heat pump installation?+
In the UK, the Boiler Upgrade Scheme offers up to £7,500 for air-to-water installations. In Germany, the BEG covers up to 70% of eligible costs. In Norway, Enova offers household grants. In Sweden, ROT-avdrag provides a 30% labour cost tax deduction. Always verify current eligibility before signing contracts.
Does payback depend on what fuel I am replacing?+
Yes, significantly. Oil and LPG are expensive fuels, so switching to a heat pump often produces a large annual saving. Replacing gas produces a smaller saving because gas is cheaper per kWh in most markets. Replacing direct electric heating produces little saving, since both systems run on electricity.
How do I estimate my expected heat pump running cost?+
Your annual heat pump running cost depends on your home's heat demand, the system's COP and your electricity tariff. A qualified installer will give you a site-specific estimate. The Heat Pump Running Cost Calculator gives a starting figure based on home size and local electricity price.
How heat pump payback is calculated
What this calculator does — and does not do
This calculator handles the financial payback analysis only. It does not calculate COP, size the system or compare heating technologies. For running cost estimates, use the Heat Pump Running Cost Calculator first, then bring the annual figure here. For a technology comparison, use the Boiler vs Heat Pump Calculator.
Year-by-year model
Annual saving = current heating cost − expected heat pump running cost. Both costs are assumed to rise at the same inflation rate each year, so the saving differential is preserved. For each year:
- Year saving = annualSaving × (1 + inflationRate)year−1
- Annual maintenance is kept flat (not inflation-adjusted)
- Year net = year saving − annual maintenance
- Cumulative net = sum of year net values − net cost
Payback is the first year where cumulative net savings reach zero. If this does not happen within the selected lifetime, the calculator shows "No payback within lifetime."
No annual saving
If your expected heat pump running cost equals or exceeds your current heating cost, the calculator shows "No annual saving." This can happen when switching from cheap gas to a heat pump in a poorly insulated home, or when electricity prices are high relative to the displaced fuel. In this case, review the running cost estimate with a qualified installer before proceeding.
Is a heat pump worth it for your home? Read Heat Pump ROI: Is It Worth It?