‘The heat pump mistakes that cost me hundreds, and how to avoid them’

David Strahan is a writer and editor specialising in clean energy. He reveals the lessons he learned after installing his heat pump.

It’s not normal, I know – but these days I rather look forward to the arrival of my energy bills. In the year just gone, my third with a heat pump, they show my total outlay came to just £1,218.

That paid for all the energy needed to run a three-bed terraced house heated to a steady 20C. Had I consumed the same amount of heat and power using an averagely efficient boiler and standard tariffs, it would have cost £1,722. Against that benchmark, I saved £503, or 29pc.

Admittedly, it hasn’t always been this way. In the previous year, I paid roughly £2,260, about £50 more than the Ofgem price cap.

So, why the turnaround? I’ve since discovered the unit had been underperforming because of mistakes I made when it was first installed. Rectifying those has helped cut the costs – and my story shows how you can avoid the pitfalls altogether.

How much you could save

This year’s savings came from several sources, but the heat pump was the largest – as shown in the table below.

It provided a year’s heat and hot water for just £576, a saving of £162, according to figures from my energy bills and heat pump data for the year to March 20.

The boiler costs are calculated using the same consumption data, but assuming an average efficiency boiler and standard tariffs at the prevailing Ofgem cap rates. All figures include VAT.

The next largest saving came from my non-heat pump electricity consumption, which shrank after I switched to the Agile Octopus tariff last April.

Agile tracks the wholesale electricity market, meaning the price changes every half hour, and each day is different. When demand is low and renewable generation high, prices can drop sharply or even go negative – meaning the company pays you to consume electricity.

The average Agile tariff over the last year has been a shade lower than the Ofgem cap, but most of the savings came from keeping an eye on the mobile app and shifting clothes and dish washing to cheaper times. That saved £140, and the Agile standing charge, which is 40pc lower than the Ofgem cap, another £87.

I saved another £115 because I had asked a previous energy supplier to remove the redundant gas meter, meaning I no longer pay standing charges for gas. If you add this to the heat pump savings, it comes to £277, equal to one third of what the gas units and standing charges would have cost.

But, as I found, the heat pump savings did not come easy.

The ‘hidden’ function that could make big savings

The trouble started when I asked the installers if I could keep my old WiFi-connected heating hub and thermostatic radiator valves that had previously controlled the boiler – and they said yes.

Nobody explained – or if they did, it failed to register – that controlling a heat pump with even a single thermostat, never mind half a dozen, is not a great idea.

Compounding this issue, I recall that as the heating engineer was finishing up, he offered to turn on a function called “weather compensation”.

It was Friday night, sounded complicated and, in my ignorance, I declined. It was only when the bills started to mount that I began to investigate.

One problem is that a thermostat is a crude way to control any heat pump or boiler. It works simply by turning the entire unit on and off. This can never keep the temperature comfortably steady, nor is it energy efficient.

It is far better to run the heat source almost continuously and to control the amount of heat coming into the home by varying the temperature of the radiator fluid.

With weather compensation, the system is guided by an outdoor temperature sensor, and adjusts the radiator fluid temperature to compensate the amount of heat the home will lose.

When the temperature outside drops below freezing, for example, the radiator fluid might rise to 45C – when the weather warms to a mild 10C, the radiator fluid could fall as low as 30C.

By anticipating changes in the home’s heat loss, weather compensation keeps the indoor temperature much steadier. And because the radiator fluid is heated only as high as the weather demands, the heat pump consumes less energy overall.

But here’s the catch. It’s not just a question of switching on the weather compensation and getting on with your life. The settings must be adjusted differently for every home – depending on radiator sizes, the level of insulation and so on – and it can take several attempts to get it right.

I started tinkering towards the end of 2023, and that winter, the heat pump achieved about 270pc efficiency. That’s more than three times higher than the average combi boiler (83pc), but not enough to offset the fact that electricity in the UK is roughly four times more expensive than gas, the biggest “spark gap” in Europe.

So, as the table below shows, I was still paying for my mistakes.

It turns out my experience is typical.

A government funded study published late last year monitored the performance of 700 heat pumps and found their average efficiency was just 280pc – almost as bad as mine.

It wasn’t immediately clear why the average performance was so poor. But a new analysis of the same data by heatpumpmonitor.org, an online community of heat pump owners and installers, suggests that poorly calibrated weather compensation was a key culprit.

The analysis found that 55pc of all the heat pumps sampled were cycling to higher temperatures than needed. And among the heat pumps operating at less than 330pc efficiency – the minimum level needed to beat a boiler’s running costs at current electricity prices – 73pc showed this behaviour.

“It’s not the only factor,” says Trystan Lea, a physicist and co-founder of openenergymonitor.org, “but it does strongly suggest that when heat pumps don’t perform as well as they should, poorly adjusted controls are one of the major causes. It is clearly a widespread problem.”

But why is this happening so much?

Some industry experts, such as podcaster Nathan Gambling, argue the three-day training courses that qualify a boiler installer to upgrade to heat pumps are inadequate, meaning some installers simply may not know about weather compensation.

Others point out that since weather compensation needs to be adjusted for each home individually, some installers may be reluctant to make time-consuming repeat call-outs to tweak the settings.

Ken Bone, a veteran heating engineer and training manager for Ultimate Renewables Supplies, based in Oxfordshire, has seen plenty of evidence of both. The company oversees and guarantees the work of newly qualified heat pump installers and has a sideline rescuing poorly performing systems.

“Weather compensation has been available on boilers for decades but nobody ever bothered because historically gas was cheap,” says Bone. “That means many installers are unfamiliar with weather compensation and others may not want to spend the time.”

Bone estimates that had Britain installed weather compensation on all the boilers replaced over the last decade, the annual savings in gas would now be enough to heat four million homes.

An extra cost-cutting gadget

Despite the problem being pervasive and complicated, I found it can also be surprisingly easy to solve.

Last spring, I was invited to test a new heat pump optimiser from a start-up called Havenwise which, in effect, automates weather compensation using machine learning.

The results are just in, and show my heat pump efficiency has jumped to 330pc this winter (up from 270pc).

That’s a big improvement, and almost matches the 340pc performance my installers originally predicted. Yet that level of efficiency by itself should generate only around a £20 saving against the Ofgem cap, and my total heat pump savings of £162 were eight times bigger.

Much of the difference is explained by the fact the optimiser does far more than set basic weather compensation.

Optimisers typically also integrate a 24-hour local weather forecast and details of a time-of-use electricity tariff, such as Economy 7 or Agile Octopus, to make smart decisions about when and how hard to run the heat pump – Agile tariffs change every half hour but are published a day in advance.

“If you want the biggest savings out of a heat pump, you need to raise efficiency and exploit time-of-use tariffs,” says Henri Casteleyn, co-founder of Havenwise, “and the optimiser does both”.

So not only do you consume fewer kilowatt hours of electricity, but also pay less for each one on average. Over the winter, for example, I paid an average of just 19p/kWh compared to the average Agile tariff of 23p/kWh and the Ofgem cap rate of 25p/kWh.

An optimiser is not a magic wand, however. It operates within the physical efficiency of a heating system and that is determined by the installer’s system design and workmanship, so it really matters who installs your heat pump.

But because it’s so tricky to fine-tune weather compensation manually, installing an optimiser makes it more likely you’ll get the best possible performance out of your system – with the smart tariff savings on top.

Havenwise works through a simple mobile app that costs £50 per year. Other optimisers from Homely and PassivUK require a small electrical device to be attached to the heat pump costing around £200 plus fitting.

Had I known all this when I started out, I probably would have made big savings over the past three years, rather just the most recent. But now it’s set fair.

The savings could increase further next year if the Government acts to reduce the impact of Britain’s high electricity prices. The Department for Energy Security and Net Zero (DESNZ) has consulted on the issue and will publish its response this summer, and officials suggest the most likely policy outcome is a £200 bill discount for those with electric heating.

Had that been in force this year, my total energy bill would have come to just over £1,000, a saving of £700. Or slightly more than I’ve just paid for a week’s holiday in Cyprus.