Heat Pump Payback Calculator
Calculate the payback period for a heat pump, based on installation cost, current heating cost and coefficient of performance (COP).
How to use the heat pump payback calculator
- Enter the installation cost of the heat pump (including labor).
- Enter what you spend on heating today, per year (assuming direct electric heating).
- Enter the coefficient of performance (COP) of the heat pump — check the product specification, typically 2.5-4 for air-to-air heat pumps.
- The payback period and savings update automatically.
What is coefficient of performance (COP)?
The coefficient of performance (COP) tells you how much heat energy a heat pump produces per unit of electricity it uses. A COP of 3 means the heat pump delivers 3 kWh of heat for every 1 kWh of electricity it consumes — far more efficient than direct electric heating (resistance heaters), which has an efficiency of about 1 (1 kWh of electricity gives 1 kWh of heat). This calculator assumes you currently heat directly with electricity, and calculates how much lower your electricity use becomes with a heat pump: new cost = current cost ÷ COP.
Frequently asked questions
Why is the coefficient of performance higher than 1, if energy can't be "created"?
A heat pump doesn't create energy — it moves heat from the outdoor air (which contains thermal energy even at low temperatures) into the building, using a compressor driven by electricity. The electricity is used to move heat, not to produce it directly, which makes the process more energy-efficient than pure electric resistance heating.
Why does the coefficient of performance drop when it gets colder outside?
The lower the outdoor temperature, the less thermal energy there is to extract from the outdoor air, and the compressor has to work harder to achieve the same heating effect — this reduces efficiency (COP) in severe cold compared to milder weather.
Does this calculation apply to all types of heat pumps?
The principle (cost ÷ COP) applies to all types, but the actual COP value varies a lot between air-to-air, air-to-water and ground-source heat pumps — always check the specification for the specific model you're considering.