Cost of Living: Butcher on how energy price rise has affected him

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Britons looking to instal heat pumps to save on bills could be in for a shock as industry experts warn soaring energy prices for businesses have made heat pumps more expensive.  As the spiralling cost of wholesale gas is passed onto customers in their energy bills, many Britons have been looking towards installing heat pumps, which use electricity, which has seen a relatively less sharp increase in prices. 

While the energy bills for households have been softened slightly through measures like the price cap, and the various discounts rolled out by the Government, businesses and industries have until recently had no such protections from the volatile fossil fuel prices. 

As a result, soaring energy bills have pushed inflation to record levels, which industry experts warn is now also affecting the costs of installing energy-efficient heat pumps. 

Speaking to, Jon Bonnar, the Director of Cotswold Energy group, which installs heat pumps for households, said: “We’ve seen some price rises.

“We install 500 heat pumps a year, give or take, and what we’ve seen is that some prices have increased. What we’re seeing is that our cost base has increased by about probably 15-20 percent in the last 18 months.

“What that’s meant for the customer is that their cost has gone up less than that, maybe 5-10 percent.

“In the last three years, the average sale price to consumers has gone up from 12,000 to 14,000. Over three years, it’s been a significant jump.”

He noted there have been a number of reasons why prices have been rising over the past few years, noting: “Covid made the supply chain more difficult and as a result, prices went up. Prices went up because of Covid, and then prices went up because of the war in Ukraine, inflation and other factors.”

However, he noted that while the upfront costs of heat pumps were increasing, he found that for many who could afford the installation, the soaring of gas meant that they were finding the heat pump more affordable. 

He added: “But where the energy prices have gone up as well, it’s making heat pumps more affordable for people because what we’re seeing is that the gas prices are increasing and the alternative is to use heat pumps that run on electricity.

“I think it’s more sense for customers now, whereas before it used to be a marginal difference in terms of running costs.

“The running costs are becoming more affordable right now because what you can do is you can pair a heat pump with solar PV for example, while solar panels won’t pay for all the heat pumps, they will pay for some of it.”

Heat pumps generally have a high upfront cost, which the Government has looked to mitigate through the Boiler Upgrade Schemee, that offers households up to £5,000 in subsidies to install a heat pump in place of a boiler. 

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However, Mr Bonnar noted the £5,000 subsidy will bring the average heat pump price down to around £7,000-£8,000, which could still be unaffordable for many Britons. 

He continued: “The key thing about the Boiler Upgrade Scheme is that the 5000 is a useful contribution to a system installation cost, but it still relies on the homeowner having a spare £7-8000 to invest in a system, and just not everybody is having that kind of money lying around.

“It’s a difficult conundrum for everyday people who are hit by the cost of living crisis, and rising energy bills. What the Government really needs to do is to increase the BUS from 5k-10,000. I think if they did that, it would be a much more meaningful effort and contribution to getting to net zero.

“I think if you raise the BUS to 10,000, it would make the opportunity to instal heat pumps much more realistic for everyday people.”

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