ROI Calculator for Air Source Heat Pump with Solar Panels

Air source heat pumps and solar panels are often talked about together. Solar generates electricity, and a heat pump uses electricity to heat your home, so it seems like a perfect match. But the real return depends on your heating demand, energy prices, grants and, crucially, when your solar panels actually produce power.

Our ROI Calculator for Air Source Heat Pump with Solar Panels brings all of this together to estimate your yearly savings, payback period and return on investment. This guide explains the numbers so you can make an informed decision.

How an air source heat pump works

An air source heat pump takes heat from the outside air, even in cold weather, and upgrades it to heat your home and hot water. Instead of burning fuel, it uses electricity to move heat. A well-designed system typically delivers about 3 to 4 units of heat for every unit of electricity. This efficiency over a year is called the SCOP (seasonal coefficient of performance).

Why add solar panels?

Solar panels generate free electricity during daylight. Any you use in your home saves buying electricity from the grid, and the rest can be exported for payment under the Smart Export Guarantee. Pairing solar with a heat pump can cut the heat pump's running costs, but there's an important catch.

The seasonal mismatch

Solar panels produce most of their electricity in late spring and summer. Heat pumps use most of their electricity in winter. So the share of solar that directly powers your heat pump is usually modest, often around 15% to 25%, unless you add a battery or a smart tariff. The rest of your solar is still valuable for other appliances and exports.

How to use the calculator (ROI Calculator for Air Source Heat Pump with Solar Panels)

1. Enter your yearly heating and hot water demand in kWh. Your gas bills show annual usage; multiply by your boiler efficiency to estimate heat demand, or use the gas figure as a rough guide.
2. Add your boiler efficiency, gas price and electricity price from your bills.
3. Enter the heat pump's SCOP and installed cost, and the Boiler Upgrade Scheme grant if you're eligible.
4. Add your solar panel size, cost and expected output.
5. Estimate how much solar the heat pump uses and how much other solar you use at home.
6. Enter your export rate and the number of years to compare.

The calculator compares your current gas heating cost with the heat pump's running cost, adds solar savings and export income, and works out payback and return.

A worked example

Using the default figures, a home with 12,000kWh of heat demand and an 85% efficient boiler spends about £889 a year on gas heating at 6.3p per kWh. A heat pump with a SCOP of 3.2, using some solar power, costs about £788 in electricity. Adding savings from solar used elsewhere in the home and export income, the total benefit is about £624 a year.

After the £7,500 grant, the combined investment is about £11,400, giving a payback of around 18 years at these prices. Change the assumptions in the calculator and you'll see the result is very sensitive to the electricity price, SCOP and how much solar you use.

The Boiler Upgrade Scheme

In England and Wales, the Boiler Upgrade Scheme offers a grant of £7,500 towards an air source heat pump, paid to your installer and taken off the price. The property must have a valid Energy Performance Certificate, and the installer must be MCS certified. Scotland has its own Home Energy Scotland grants and loans.

What affects the return?

• Electricity and gas prices: the ratio between them matters most. Cheaper electricity, or a heat pump tariff, improves savings.
• SCOP: a well-designed system with properly sized radiators and low flow temperatures runs much more efficiently.
• Insulation: lower heat demand means a smaller, cheaper heat pump.
• Solar self-use: a battery or smart controls can shift more solar into heating and hot water.
• Export rates: these vary widely between suppliers.
• What you're replacing: replacing oil, LPG or electric heating usually saves more than replacing mains gas.

Planning and installation

Many domestic air source heat pumps and solar panels are permitted development in England, with conditions about size and position. Listed buildings and conservation areas may need permission. Always use an MCS-certified installer, which is required for the grant and the Smart Export Guarantee.

Non-financial benefits

Return on investment isn't the only reason people switch. Heat pumps produce far lower carbon emissions than gas boilers, especially as the grid gets greener, and solar panels reduce reliance on energy price changes. Many people also value steady, even warmth from a heat pump.

Smart tariffs and batteries

Heat pump and time-of-use tariffs can make a big difference to running costs. Some tariffs offer much cheaper electricity overnight or at set times, which can be used to heat a hot water cylinder or charge a battery. A battery can also store spare solar power from the day for use in the evening.