Alt: UK home with solar panels on roof and air source heat pump at ground level
A 4kW solar panel system saves £600-£900 per year on electricity bills and costs £5,000-£7,500 installed (Energy Saving Trust). An air source heat pump saves £200-£400 per year compared to a gas boiler and costs £10,000-£16,000 before the £7,500 Boiler Upgrade Scheme grant (Ofgem). Solar panels pay back in 6-9 years. Heat pumps pay back in 10-15 years after the grant. If you can only afford one, install solar panels first. If budget allows, install both: solar powering a heat pump can cut total energy costs by 70-80%.
How do solar panels and heat pumps compare in 2026?
| Feature | Solar Panels (4kW) | Air Source Heat Pump |
|---|---|---|
| Installed cost | £5,000-£7,500 | £10,000-£16,000 |
| Government grant | 0% VAT (until March 2027) | £7,500 BUS grant |
| Net cost after grant | £5,000-£7,500 | £2,500-£8,500 |
| Annual savings | £600-£900 | £200-£400 vs gas boiler |
| Payback period | 6-9 years | 10-15 years (after grant) |
| Lifespan | 25-30 years | 20-25 years |
| Lifetime savings | £15,000-£25,000 | £4,000-£10,000 vs gas |
| Maintenance cost | £0-£100/year | £100-£200/year |
| Planning permission | Usually not needed | Usually not needed |
| Works with existing system | Yes | Replaces boiler |
Solar savings assume 35-40% self-consumption without battery, 25p/kWh electricity rate, plus Smart Export Guarantee income. Heat pump savings versus a gas boiler at 7p/kWh gas and 25p/kWh electricity with COP of 3.0-3.5. Sources: Energy Saving Trust, Ofgem.
Which saves more money: solar panels or a heat pump?
Solar panels deliver higher annual savings and faster payback than a heat pump for most UK homeowners in 2026. The numbers are straightforward: a 4kW solar system generates 3,400-3,700 kWh per year. At current electricity rates of around 25p/kWh, self-consuming 35-40% of that generation saves £300-£370 directly on your electricity bill. The remainder exported under the Smart Export Guarantee earns another £150-£250 per year, with the best SEG tariffs now paying 12-15p/kWh (Ofgem).
Adding a battery (£2,500-£5,000 for 5-10kWh) increases self-consumption to 60-80%, pushing total annual savings to £700-£1,000.
Heat pump savings are more variable and depend heavily on what you are replacing:
- Replacing an old gas boiler (60-70% efficient): Save £300-£400/year
- Replacing a modern gas boiler (90% efficient): Save £100-£250/year
- Replacing oil heating: Save £400-£600/year
- Replacing direct electric heating: Save £500-£800/year
The heat pump savings calculation is sensitive to the gas-to-electricity price ratio. With gas at 7p/kWh and electricity at 25p/kWh, a heat pump with a COP (Coefficient of Performance) of 3.0 effectively heats at 8.3p per kWh of heat, barely cheaper than gas. If electricity prices fall relative to gas, heat pumps become significantly more attractive.
What does each one actually cost after grants?
The Boiler Upgrade Scheme grant of £7,500 dramatically closes the cost gap, making heat pumps competitive with solar on upfront investment. Here is the real-world cost comparison for a typical 3-bed semi-detached home:
Solar panels
- 4kW system: £5,000-£7,500 installed
- VAT: 0% (until March 2027)
- Battery (optional, 5kWh): £2,500-£4,000
- Total without battery: £5,000-£7,500
- Total with battery: £7,500-£11,500
Air source heat pump
- Installation: £10,000-£16,000
- BUS grant: -£7,500
- Potential radiator upgrades: £0-£3,000
- Total after grant (no radiator work): £2,500-£8,500
- Total after grant (with radiator upgrades): £5,500-£11,500
Off-gas grid properties can claim an enhanced grant of £9,000 from July 2026 to March 2027 (GOV.UK). The heat pump must be installed by an MCS-certified installer and your property needs a valid EPC.
Comparing prices from multiple installers?
Should you install solar panels or a heat pump first?
Install solar panels first if you are choosing one at a time. Solar panels are non-disruptive, work with your existing heating system, and start generating returns from day one. A heat pump is a larger project requiring potential radiator upgrades, hot water cylinder installation, and changes to your heating controls.
The strategic case for solar first:
1. Faster payback funds the heat pump later: 6-9 years vs 10-15 years
2. No disruption to your current heating: solar bolts onto your roof without changing anything inside
3. Solar prepares the ground for a heat pump: once installed, solar electricity can power the heat pump, making the combined system far cheaper to run
4. Electricity prices matter most for heat pump economics: solar reduces your effective electricity cost, improving the heat pump business case when you add it later
The exception is if your gas boiler is about to fail. Replacing a broken boiler is urgent; solar panels can wait. In that scenario, claim the £7,500 BUS grant for a heat pump now and add solar when budget allows.
What happens when you install both?
Combining solar panels with a heat pump can reduce total home energy costs by 70-80%, approaching near-zero energy bills in summer and drastically lower bills in winter. This is the optimal long-term setup for UK homeowners.
A typical combined system for a 3-bed home:
- 5kW solar array + 10kWh battery + air source heat pump
- Total cost: £18,000-£26,000
- After BUS grant: £10,500-£18,500
- Annual savings: £1,200-£1,800 compared to gas boiler + grid electricity
- Payback: 8-12 years
- 25-year savings: £30,000-£45,000
The solar panels generate free electricity during the day. The battery stores excess for evening use. The heat pump uses this free or stored electricity to heat the home and hot water at a COP of 3.0-3.5, effectively tripling the value of every kWh of solar generation used for heating.
In summer, solar generation typically exceeds total household demand including hot water heating via the heat pump. In winter, solar covers 20-30% of the heat pump’s electricity demand, with the grid supplying the rest.
FAQ
Can solar panels power a heat pump directly?
Not directly in real time, because a heat pump draws 2-4kW continuously while solar output fluctuates. However, a battery storage system bridges the gap. Without a battery, solar still offsets the grid electricity your heat pump consumes, reducing your bills. The system works through your meter, not through a direct physical connection.
Do I need planning permission for solar panels or a heat pump?
Solar panels on a pitched roof fall under permitted development for most houses and do not need planning permission. Air source heat pumps also have permitted development rights provided the unit is at least one metre from the property boundary and meets noise limits of 42dB at the nearest neighbour’s window (GOV.UK). Listed buildings and conservation areas may have additional restrictions.
What is the Boiler Upgrade Scheme and how do I apply?
The Boiler Upgrade Scheme provides a £7,500 grant towards air source, ground source or water source heat pumps in England and Wales. Your MCS-certified installer applies on your behalf and the grant is deducted directly from your invoice. You need a valid EPC and must be replacing a fossil fuel heating system. The scheme runs until at least 2028 (Ofgem).
Are heat pump running costs really cheaper than gas?
At current UK energy prices (gas 7p/kWh, electricity 25p/kWh), a heat pump with a COP of 3.0 delivers heat at around 8.3p per kWh. A 90% efficient gas boiler delivers heat at 7.8p per kWh. The margin is tight. Heat pumps become clearly cheaper when powered partly by solar panels, when electricity tariffs drop (e.g., Octopus Agile off-peak rates), or if gas prices rise.
How long do solar panels and heat pumps last?
Solar panels are warranted for 25 years and typically produce 80%+ of original output at that point, often lasting 30-35 years. The inverter needs replacing once at 10-15 years (£500-£1,000). Air source heat pumps last 20-25 years with annual servicing. Both outlast a gas boiler (12-15 year average lifespan).
Ready to find out what solar panels, a heat pump or both would cost for your home?
Planning this upgrade? Estimate your costs with the free savings calculator or join the waitlist to be first when installer quote comparison launches.