Air source heat pump vs oil - high install cost and higher running costs ?

Ryan_Holden

I went through a quote recently with Octopus (and I have mains gas, not even as expensive as your oil). 

Basically, by the time I'd paid for it and it had broken even on the cost of running against my existing set up, it would already be due for replacement. I wanted to do my part, but at the moment it's not viable.

matt_drummer

Ryan_Holden said:

I went through a quote recently with Octopus (and I have mains gas, not even as expensive as your oil). 

Basically, by the time I'd paid for it and it had broken even on the cost of running against my existing set up, it would already be due for replacement. I wanted to do my part, but at the moment it's not viable.

A lot of the initial cost is in changing the existing system. The replacement of the heat pump in the future will be much less, basically disconnect two pipes and some electrical connections, should be similar to a boiler replacement.

At the moment, it can't just be about cost, it's about stopping burning stuff. It will have to change at some point and it will come at a financial cost.

I would expect the price of gas and oil to increase substantially over the coming years, we need to look forward rather than focussing on today's costs.

I have managed to `design' a system whereby my heat pump will cost me nothing to run over its lifetime. It has involved a significant capital outlay on the heat pump, solar panels and batteries.

But, I have fixed my energy costs for the next ten years and hopefully a bit beyond. My capital outlay is equivalent to 10 years energy costs at today's prices, after that I am in profit.

I do appreciate that not everybody can do what I have done though.

matt_drummer

QrizB said:

Fizz1981 said:

 I currently have an oil boiler and use about 2000 litres oil a year

2000 litres of oil contains about 20,000kWh of energy. Assuming a modern 90% efficient boiler, that means a heat demand of 18,000kWh per year.

Fizz1981 said:

I’ve had quote for ASHP to replace  upgrade most of the radiators , install a 13kW air source heat pump & a new hot water system.

A 13kW ASHP costs about £6k, so the remaining £18k is for everything else.

I agree with others who say this seems a high quote for the job.

Fizz1981 said:

Heating & h/w demand is approx 22700kWh/yr. Which they reckon will translate into about 7500 kWh/yr of actual elec consumption for hot water and heating. They have calculated this as £2596 / year @ 0.34p /kWh (which as we all know is far from certain given energy volatility).

Last year I paid about £1900 for the oil to do the same job.

The 18000kWh of heat you used last year might need 6000kWh of electricity to provide via your new heat pump. At 34p/kWh that would be £2040.

34p/kWh is historically a very high price for electricity, but then so was 95p/litre for oil.

I think there is a lot more to this installation than just a straight boiler swap, it sounds like significant upgrades to an old, tired and inefficient heating and hot water system.

In assessing the cost it needs to be compared to an equivalent fossil fuelled alternative.

Some heat pumps are more expensive than others, a Stiebl Eltron ASHP doesn't come cheap. I was quoted over £20,000 for the same system Octopus are installing for £11,000. Most of the difference is in the price of the heat pump. Octopus use Daikin and the price I am paying for it is less than half of what I can buy it for online.

Fizz1981

matt_drummer said:

I have managed to `design' a system whereby my heat pump will cost me nothing to run over its lifetime. It has involved a significant capital outlay on the heat pump, solar panels and batteries.

But, I have fixed my energy costs for the next ten years and hopefully a bit beyond. My capital outlay is equivalent to 10 years energy costs at today's prices, after that I am in profit.

I do appreciate that not everybody can do what I have done though.

Have you got any details you can share on how you successfully achieved this ? I have been trying to do the same but the quotes I’ve got for 8kW PV +  battery and the ASHP system are approx £45K all in. Which is a massive outlay and like you not something everyone can do.
The install /running costs I have been given add up for the PV/Batt, giving a pay off in about 7yrs, but not for the ASHP which although it has the massive carbon saving benefit, never pays off in this example. (The PV+battery approx covers the existing house electricity usage) 

Fizz1981

What also concerns me is the cost (& time/hassle) to research & install these climate benefitting solutions is so high , that it is out of reach of most and so will not make a difference at scale. 

Rodders53

Fizz1981 said:

Energy rating is D with good/average insulation and we can’t put any more in due to the construction. 

There's your big issue. D is not especially good nowadays.

There will be ways of improving your insulation (plus draught-proofing / sealing and heat recovery ventilation, possibly).
They'll just be more expensive, disruptive, space-consuming and possibly ugly solutions.
Only listed building conservation issues should prevent something being done.

Mind you, that work would save oil consumption, too.  With oil at under 55p a litre today it's a no brainer to continue with oil until such time as ASHP installers are more commonplace and compete for the work.

Govt. should not be subsidising this work any more than they do with zero rated VAT on such installs. IMHO.  I think the 'subsidy' is attracting horse-riding, masked characters.

CSI_Yorkshire

Rodders53 said:

Fizz1981 said:

Energy rating is D with good/average insulation and we can’t put any more in due to the construction. 

There's your big issue. D is not especially good nowadays.

There will be ways of improving your insulation (plus draught-proofing / sealing and heat recovery ventilation, possibly).
They'll just be more expensive, disruptive, space-consuming and possibly ugly solutions.
Only listed building conservation issues should prevent something being done.

Mind you, that work would save oil consumption, too.  With oil at under 55p a litre today it's a no brainer to continue with oil until such time as ASHP installers are more commonplace and compete for the work.

Govt. should not be subsidising this work any more than they do with zero rated VAT on such installs. IMHO.  I think the 'subsidy' is attracting horse-riding, masked characters.

AKA the FiT-era solar panel installers.  Half the time it's the same characters with a new business name auto generated by the eco-ai.

matt_drummer

I have around 13 Kw of solar panels, not all perfectly orientated south. They are south west and north east. I also have some shading issues on our garage so I have optimisers fitted everywhere which also enable me to monitor the performance of all panels.

The panels and batteries cost £30,000

We have 38 kWh of battery storage

The heat pump is costing me £6,700 net of the grant.

Our electricity and gas would cost around £3.600 per year at the current rates.

If I can make it so we pay nothing each year to an energy company then we have broken even in ten years.

Our heat pump is being installed in just over a weeks time so some of this is estimated, but I have put some effort into making sure it all adds up, more or less! I'm an accountant so I should be ok.

The idea is that what we export in the summer pays for what we need to import in the winter. My export rate is similar to my current E7 night rate.

The final part of the solar and batteries was completed in March 2023 and I haven't imported any electricity since then. There is a small amount each day as the system needs to recognise a load to start powering the house from the battery. Our electricity import for May was around 4 kWh.

We exported over 1 mWh in May.

The large battery storage is enough to cover all but the very worst days in winter (obviously including the heat pump) which means we can live almost entirely on electricity at E7 night rates.

Its not all completely tested as we don't have the heat pump and it's not winter but I don't think I'll be far out.

Even if it costs a little more than expected we are not burning anything.

On top of this, we live pretty well, we use stuff with little care for the cost and we are able to heat a hot tub (smallish, inflatable, but our son loves it)


This is probably not for everyone but it is not as unachievable as it may sound at first.


Maybe you have to consider how efficient you heating and hot water system is now, how comfortable your life is, what you get out of the upgrades and how you could make it work financially both now and in the future.

Fizz1981

Interesting insights  on the unintentional side effects of subsidy ! Agree it’s really important to be able to get quality companies on the job.

Fact remains that we are not reducing emissions fast enough (read today that we are breaking most planetary limits for emissions already and it’s getting worse by the day) and these installs are big ticket items. Most can’t afford these. How else do we get the solutions rolled out at scale quickly enough to make a difference reducing emissions?

matt_drummer

Rodders53 said:

Mind you, that work would save oil consumption, too.  With oil at under 55p a litre today it's a no brainer to continue with oil until such time as ASHP installers are more commonplace and compete for the work.

Govt. should not be subsidising this work any more than they do with zero rated VAT on such installs. IMHO.  I think the 'subsidy' is attracting horse-riding, masked characters.

Its always about cost.

Why should cleaner be cheaper?

The air we breath in places is filthy, it's ok because it's the cheapest way of running our cars and heating our homes?

These systems will eventually improve our lives, improvements come at a cost.

Burning stuff has to stop at some point, it's all going to run out. Burning stuff is crude and inefficient, it may be cheap but it's really not good!

There may be some cowboys but if you look at what is actually involved in fitting an ASHP, its never going to be cheap.

I never see why we are so against people making a profit in this country. It's ok if we do well ourselves but we don't want anybody else to.

If you get a good product that works well, installed well and supported well, why worry about how much profit the installer made?

The replacement of the heat pump will be ok but the initial install is not so easy.