New study – Heat pump or gas boiler: what is the most cost-effective choice today?
In winter, the same question comes up every year. Is a heat pump an affordable alternative for heating a home? VITO looked at the numbers and analysed different energy price scenarios and energy labels.
VITO’s experts assessed when an individual air-to-water heat pump, without any additional renovation works, becomes economically attractive compared with a new gas or oil boiler. The analysis compares total costs over 25 years (2025–2050) across different energy price scenarios and energy labels, and also considers the role of grants and a possible tax shift.
The study was commissioned by the Flemish Energy and Climate Agency (VEKA) and carried out in preparation for the Flemish Energy and Climate Plan (VEKP).
What is the main conclusion
A previous study (Dutch only) shows that the tipping point for the cost-effectiveness of an air-to-water heat pump lies at an electricity-to-gas price ratio between 3.5 and 2.5. However, when, as in this new study, investment costs and real-world energy use are also systematically taken into account, a heat pump turns out to be economically attractive in many homes only at significantly lower price ratios than 2.5.
Under favourable ratios, such as 2.2, a heat pump becomes economically attractive for almost all homes with a B label and for more than half of homes with a C label. Under less favourable scenarios, such as 2.9 or higher, the share of homes for which a heat pump is cost-effective remains limited.
Concrete figures: what does this mean in the study scenarios
- With a price ratio of 2.9, a heat pump is cost-effective, with an average grant of €3,000, for 5 to 7 per cent of existing single-family homes where the heating system is replaced. With an average grant of €4,500 to €5,000, this share rises to 16 to 18 per cent.
For these energy prices and with a renovation grant of €3,000, a heat pump is economically attractive for 24 per cent of homes with a B label and 11 per cent of homes with a C label.
- With a price ratio of 2.2, the share rises to 26 to 41 per cent of existing single-family homes with a grant of €3,000, and to 32 to 50 per cent with a grant of €4,000 to €5,000.
With these energy prices and a grant of €3,000, a heat pump is economically attractive for almost all homes with a B label, 72 per cent of homes with a C label and 37 per cent of homes with a D label. A grant of €4,000 to €5,000 also makes the switch to a heat pump economically feasible for 75 per cent of homes with a C or D label.
This study builds on earlier analyses
This study builds on earlier VITO research, including the position paper “Winter is Coming – where are the heat pumps”, the VEKA study on hybrid heat pumps (Dutch only), the “Factcheck rendabiliteit warmtepompen” (Dutch only), and the study for Luminus on carbon constraints and EPCs.
