Heat pump payback: how to calculate it
A heat pump costs more to buy than a gas boiler, but it has lower running costs. The payback period shows how long it takes to recover that difference.
A simple formula
yearly saving = yearly cost of the old heating − yearly cost of the new heating
payback (years) = cost of the investment ÷ yearly saving
This is a simplified calculation: it doesn't account for changing energy prices, maintenance or the lifetime of the equipment.
Worked example: from gas to a heat pump
Assume a house that needs 15,000 kWh of heat a year and a quote of €12,000 for a heat pump. At the calculator's default prices:
- Yearly cost of gas: €1,708
- Yearly cost of the heat pump: €667
- Yearly saving: €1,041
- Payback in years: 12,000 ÷ €1,041 ≈ 11.5
What affects the payback
The payback gets shorter when:
- the existing heat source is expensive (electricity, gas, or pellets at higher prices),
- the house needs a lot of heat, for example because it is larger or less insulated,
- the real COP is high thanks to a low-temperature system such as underfloor heating,
- subsidies and grants are available (check the current conditions).
It gets longer when:
- the fuel the pump replaces is cheap,
- the real COP is lower than the calculator assumes,
- the heating system needs to be modified (radiators, pipework),
- maintenance or replacement of components adds up over the lifetime.
How to work it out in the calculator
In the last step of the calculator you can enter a quote for a new system. The calculator compares your current yearly costs with the costs of the new system and shows the payback. You can adjust energy prices to match your own bill.
The numbers in the tables and examples are based on the calculator's default values (rough average prices for Slovakia). Real costs differ with your prices, equipment and house.
Frequently asked questions
How many years until a heat pump pays for itself?
It depends on the cost of the investment, your heat demand and energy prices. The worked example above shows how to calculate the payback for your own numbers.
Is maintenance included in the payback?
The simplified formula leaves it out. For a more accurate picture, add yearly maintenance and the expected replacement of components to the yearly cost.
Does the payback still hold if energy prices change?
The calculation assumes constant prices. If the ratio of electricity to gas prices changes, the yearly saving changes too, so repeat the calculation after prices move.