Heat pumps can be a great choice for businesses that want to improve their energy efficiency, especially when it comes to the heating and cooling of your buildings. You may have heard of heat pumps before, but never really looked into how they work.

They basically take natural heat from the air, ground, or water and turn it into energy that can then be distributed to provide heating and hot water around your building. This makes them a smart and more energy-efficient alternative to traditional gas boilers, which are more commonly used in homes and businesses across the UK.

Can your business get help with the cost of a heat pump?

Upfront cost is the main drawback of a heat pump, as we explain below, and in England and Wales the Boiler Upgrade Scheme can take a slice off it. Business-owned properties are eligible:

  • Air source or ground source heat pump: a £7,500 grant.
  • Building heated by oil or LPG with no mains gas: a further £1,500 until March 2027.

A single system can be no bigger than 45kWth, so the scheme suits smaller premises, and hybrid systems don't qualify. The Budget on 28 October 2026 held its funding at £400m for 2027/28.

New buildings are a separate matter. From 24 March 2027, new non-domestic buildings in England will need low-carbon heating, such as a heat pump, to meet the Future Buildings Standard. Because a heat pump moves your heating from gas to electricity, check your business electricity rates before you budget for one.

How do heat pumps work?

A heat pump works a bit like a fridge in reverse. It extracts low-grade heat from outside, compresses it to raise the temperature, then releases it into your building. Because it moves heat rather than creating it, a heat pump can deliver three to four units of heat for every unit of electricity it uses. A gas boiler, by comparison, produces less than one unit of heat per unit of gas burned.

There are three types of heat pumps available for commercial use.

Air source heat pumps extract heat from the outside air. They work even in cold weather, down to around minus 15 degrees. They're the most common choice for businesses because installation is simpler and cheaper. The units sit outside the building, similar to air conditioning units.

Ground source heat pumps draw heat from the ground through buried pipework. Ground temperatures stay stable all year, so these systems are very efficient. The trade-off is cost and space. You need either land for horizontal pipe loops or the budget for vertical boreholes.

Water source heat pumps take heat from a nearby river, lake, or other water source. They're highly efficient, but only an option if your site sits close to suitable water.

What size heat pump do you need?

The size of a heat pump depends on how much heat your building needs. The system must be the right size to meet this demand.

For example, a small office will usually need a smaller, lower-cost heat pump than a large building such as a school. Insulation also plays an important role. If your building is well insulated, it will lose heat more slowly, meaning a smaller heat pump may be suitable compared to a building with poor insulation.

Installation

The more complex the installation, the higher the overall cost. Installing heat pumps is not cheap, and this is a major consideration for businesses when assessing whether they would benefit from the technology. The upfront cost of installing a heat pump system on site can be quite expensive, but the improved energy efficiency can reduce heating costs by up to 40%, leading to lower energy bills in the long run.

Newer buildings may integrate with the installation more easily, as the pipework and radiators may already be up to standard, making the process more straightforward. In older buildings, however, the pipework or radiators may need upgrading to maximise efficiency and ensure the heat pumps operate effectively.

What are the benefits of a heat pump?

Installing heat pumps for your business can be a cost-effective and more sustainable way to heat your buildings.

If you are looking for more sustainable and predictable energy bills, a heat pump could be the right solution. Heat pumps run on electricity, which can greatly reduce your gas usage, and they are much more energy efficient than traditional gas boilers. In some cases, businesses can see energy savings of up to 40–60%.

For businesses looking to reduce their carbon emissions, heat pumps support cleaner heating and help move away from fossil fuels. They are also safer to use, as there is no risk of carbon monoxide leaks.

What are the drawbacks of heat pumps

With heat pumps offering plenty of benefits, what would be the reasons you might choose not to have this system installed for your business?

The main drawback is the costly upfront investment you would need to pay. If this is something that would work for your business, it may be a great investment. However, the high cost may be too much, once you factor in installation and how well it integrates with your current systems. You may find that major upgrades are required in order for the heat pump system to function properly and for you to see a return on investment. In that case, the benefits are ultimately outweighed by the cost.

How can we help?

We can help you find the best gas and electricity rates for your business. Sign up for our daily market report to stay updated on the energy market.

If you’re looking for more ways to cut down on energy use, enquire today about Insights, our energy monitoring software. It tracks your energy usage in real time and can help reduce your bills by 20–30 per cent.

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Contact us on 0161 521 3400 or email us at info@purelyenergy.co.uk