Heat Pump Installation Guide UK: ASHP, GSHP, MCS, and the BUS Grant Explained
The mistake that costs homeowners the most money with heat pumps isn't picking the wrong model. It's installing one before the house is properly insulated. A heat pump running in a poorly insulated home will technically work — it'll just run constantly, deliver mediocre comfort, and produce electricity bills that make your old gas boiler look economical. The grant doesn't cover the remedial insulation work you should have done first.
Here's what you need to understand before you pick up the phone to an installer.
ASHP vs GSHP: What's the Difference?
Air Source Heat Pump (ASHP) Extracts heat from outdoor air — even at temperatures as low as -15°C — and transfers it inside via a refrigerant cycle. The outdoor unit typically sits on a wall bracket or ground pad adjacent to the property. Installation is relatively straightforward compared to GSHP: no groundworks, no specialist drilling rig, usually one to two days on site for a domestic property. The downside is efficiency: as outdoor temperatures fall, the Coefficient of Performance (COP — the ratio of heat output to electricity input) drops. A well-specified ASHP will average a seasonal COP of 2.5–3.5 in UK conditions, meaning 2.5–3.5 kWh of heat for every 1 kWh of electricity consumed.
Noise is worth considering: modern ASHPs run at 40–50 dB at one metre, roughly equivalent to a quiet conversation. Planning rules require the unit to be at least one metre from the property boundary and not on a wall or roof facing a highway.
Ground Source Heat Pump (GSHP) Extracts heat from the ground via buried pipework — either horizontal trenches (requires significant garden area, typically 300–600m of pipe) or vertical boreholes (50–150m deep, drilled by a specialist rig). Ground temperatures in the UK stay relatively stable at around 10–12°C year-round, so GSHPs achieve higher and more consistent COPs: typically 3.5–4.5 seasonal average. They're quieter (the noisy component is underground or in a plant room), but installation cost is significantly higher due to the groundworks, and the garden disruption can be substantial for horizontal loops.
For a deeper technical comparison including the full fabric-first preparation sequence and how heat pump flow temperatures interact with radiator sizing, see our heat pump installation guide.
MCS Certification: Non-Negotiable
To qualify for the Boiler Upgrade Scheme grant, your heat pump must be installed by an MCS-certified installer (Microgeneration Certification Scheme). MCS certification covers both the installer and the equipment — both must be on the MCS register for the installation to qualify. You can verify an installer's certification at mcscertified.com before you engage them.
MCS also requires the installer to carry out a heat loss calculation to BS EN 12831 to properly size the system. If an installer quotes you without doing a room-by-room heat loss assessment, walk away — under-sizing leads to poor performance, over-sizing leads to short-cycling and premature wear.
The Boiler Upgrade Scheme (BUS) Grant
The BUS grant, administered by Ofgem, provides a £7,500 voucher for eligible installations of:
- Air source heat pumps
- Ground source heat pumps
- Water source heat pumps
As of 2025, the grant amount is £7,500 for both ASHP and GSHP (they were equalised in the 2023 Autumn Statement). Biomass boilers are also eligible in limited circumstances at £5,000. For the full BUS eligibility rules and the application process in detail, see our Boiler Upgrade Scheme guide.
Eligibility rules:
- Property must be in England or Wales
- Must have a current, valid EPC (within the last 10 years)
- The EPC must not show outstanding recommendations for loft insulation or cavity wall insulation (if those cavity walls are technically suitable for insulation) — if it does, you must complete the insulation before the installer can apply for the grant
- No existing heat pump — replacement of an existing heat pump does not qualify
- Your current gas or oil boiler can remain in place up to the point of replacement; having a gas boiler does not disqualify you
- The property must be a domestic dwelling (not commercial)
How the application works: You don't apply to Ofgem directly. Your MCS-certified installer applies on your behalf through the Ofgem portal, receiving a voucher code before installation begins. The voucher is deducted from your installation invoice — you pay the net amount, not the gross and wait for a rebate. Vouchers are valid for three months from issue; if the installation isn't completed within that window, a new application is required.
Suitability Checklist: Is Your Home Ready?
Before spending a penny on quotes, work through this list:
| Check | Why it matters | Typical cost to fix |
|---|---|---|
| Loft insulation (≥270mm mineral wool) | Reduces heat loss, may be needed for EPC eligibility | £300–£600 (often free via ECO4) |
| Cavity wall insulation (if applicable) | Same — EPC check requirement | £400–£800 (often free via ECO4) |
| Radiator sizing | Heat pumps run at 45–55°C flow temp vs 70–80°C for boilers; undersized radiators won't heat the room | £150–£600 per radiator replacement |
| Hot water cylinder | ASHPs need a well-insulated indirect cylinder, typically 200–300 litres | £600–£1,200 supply + fit |
| Electrical supply | Heat pumps require a dedicated 32–50A circuit; older properties may need a consumer unit upgrade | £500–£2,000 |
| UFH (underfloor heating) | Ideal for heat pumps; runs efficiently at 35–45°C flow temperature | If retro-fitting: £60–£100/m² |
Cost Table
| System type | Supply + installation | After £7,500 BUS grant |
|---|---|---|
| ASHP (standard domestic) | £8,000–£15,000 | £500–£7,500 |
| ASHP (large property or complex install) | £15,000–£20,000 | £7,500–£12,500 |
| GSHP (horizontal loop) | £15,000–£22,000 | £7,500–£14,500 |
| GSHP (vertical borehole) | £20,000–£30,000+ | £12,500–£22,500+ |
These figures include the heat pump unit, controls, pipework connections, and commissioning. Hot water cylinder and electrical upgrades are typically additional. For a comparison against a standard boiler replacement, see our boiler replacement costs guide.
Running Cost Comparison
At 2025 energy prices (Ofgem price cap: electricity ~24p/kWh, gas ~6.3p/kWh):
| Heating system | Typical annual cost (3-bed semi) | Notes |
|---|---|---|
| Gas boiler (90% efficient) | £900–£1,400 | Assumes 12,000–15,000 kWh gas |
| ASHP (COP 3.0 seasonal) | £1,100–£1,700 | Assumes same heat demand, electricity pricing |
| ASHP (COP 3.5 seasonal, insulated home) | £900–£1,400 | Well-insulated home, optimised system |
| GSHP (COP 4.0 seasonal) | £800–£1,200 | Higher upfront, lower running cost |
The electricity-to-gas price ratio (currently about 3.8:1) means heat pumps are at a disadvantage compared to their theoretical efficiency. The UK government's Energy Price Guarantee and future pricing reforms are expected to narrow this ratio, improving heat pump economics significantly.
Payback Period: Worked Example
Property: 3-bed semi, replacing gas combi, ASHP installed at £12,000, grant applied:
- Net cost after grant: £4,500
- Annual gas bill saved vs ASHP running cost: assume breakeven in year one, £200/year saving from year two as insulation improves
- Payback on net cost at £200/year: ~22 years
- Payback at £500/year saving (as gas/electricity ratio improves): ~9 years
Heat pumps are a long-term infrastructure investment, not a quick-win bill reduction. The financial case strengthens considerably as gas prices rise relative to electricity.
Planning Permission
ASHPs are Permitted Development for most domestic properties under Class G, Part 14, Schedule 2 of the GPDO 2015, provided:
- The unit is not on a wall or roof that faces and is visible from a highway
- It's at least one metre from the property boundary
- It's not on a listed building or in its curtilage
- The property isn't in a conservation area (or if it is, check with your LPA — some conservation areas allow ASHPs with conditions)
- Only one unit per property under PD rights
GSHPs do not require planning permission for the borehole or horizontal loop themselves, but always confirm with your LPA if in a designated area.
Ready to find out whether your home is heat pump-ready and what it'll cost in full? Upload your property details and photos at renovate-me.madethis.app for a personalised renovation roadmap.
For a broader picture of the finance schemes available for low-carbon home improvements — including the history and collapse of the Green Deal, the current ECO4 and GBIS pathways, and how to combine the BUS grant with insulation support — see Green Deal Finance UK: History and What Has Replaced It.