Heat pumps are not coming. They are here. The government’s push to decarbonise home heating means air source heat pumps are quickly becoming mainstream. If you are a heating engineer who has not started quoting for them, your competitors are building a lead you will struggle to close.
But here is the problem. Too many heating businesses are quoting heat pumps like boiler swaps. They look at the equipment cost, add a day’s labour, and send the quote. Then they wonder why the job took three days and the margin vanished.
Heat pump installations are more complex and more profitable than boiler replacements — but only if you price them properly.
Why Heat Pump Jobs Are Not Boiler Swaps
If you have spent years fitting gas boilers, you know the rhythm. Strip out, hang the new one, connect gas and flue, fill, commission, done. A competent engineer can do a like-for-like combi swap in a day.
Heat pumps are a different animal entirely.
The survey is more involved. A heat pump installation requires a full heat loss calculation — room by room. Measuring every wall, window, and door, understanding insulation levels, and designing a system that keeps the house warm at the lower flow temperatures a heat pump operates at. This is skilled, technical work that takes time.
The installation takes longer. A straightforward retrofit typically takes 2 to 4 days, compared to one day for a boiler swap. You are dealing with an outdoor unit, pipework runs, an unvented cylinder, potentially a buffer tank, new controls, and modifications to the existing radiator circuit.
You need MCS certification. This is essential if your customers want the Boiler Upgrade Scheme grant. Getting MCS certified involves training, assessment, and ongoing compliance — all of which cost money that should be reflected in your pricing.
The electrical work adds complexity. Heat pumps need a dedicated electrical supply. If you are not Part P qualified, you will need an electrician on site — another cost to account for.
None of this is a reason to avoid heat pumps. It is a reason to price them properly.
The Biggest Mistake: Pricing Heat Pumps Like Boiler Replacements
An engineer who has been quoting boiler installs at £2,000-£2,500 starts offering heat pumps and quotes them at £6,000-£7,000. More money, so more profitable, right?
Wrong. The equipment costs more. The materials list is longer. Labour takes three or four times as long. Add survey work, design work, and MCS compliance on top, and if you have not built every one of those costs into your quote, you are earning less per hour than you would fitting a boiler. As I cover in our guide to pricing plumbing and heating jobs, your quote needs to start with your true costs, not with what you think the customer expects to pay.
Understanding Your True Costs on a Heat Pump Install
Let’s break this down properly. Here is what a typical air source heat pump retrofit actually costs you.
Worked Example: 9kW Air Source Heat Pump Retrofit
This is a straightforward retrofit to a three-bedroom semi-detached house. The existing system has radiators and a conventional boiler. The property has reasonable insulation. No major structural work required.
| Cost Element | Amount |
|---|---|
| Equipment & Materials | |
| Air source heat pump unit (9kW, trade price) | £4,200 |
| Unvented hot water cylinder (200L) | £850 |
| Buffer tank | £350 |
| Controls and programmer | £280 |
| Pipework, fittings, insulation, glycol | £420 |
| Electrical materials (cabling, isolator, MCB) | £180 |
| Sundries (brackets, fixings, base tray, condensate) | £220 |
| Total Materials | £6,500 |
| Labour & Overheads | |
| Installation labour (3 days × 8 hours × £45/hour fully loaded rate) | £1,080 |
| Electrician (0.5 day) | £250 |
| Survey, heat loss calculation, and system design (4 hours) | £180 |
| MCS paperwork and compliance administration | £120 |
| Commissioning and customer handover | £90 |
| Travel, waste removal, consumables | £80 |
| Total Labour & Overheads | £1,800 |
| Total Job Cost | £8,300 |
| Profit margin (15%) | £1,245 |
| Your Quote to Customer | £9,545 |
Round that to £9,500 and you have a quote that covers every cost and leaves you with a genuine profit of over £1,200 on the job.
Now look at what happens if you quote £7,500 because you think the customer will not pay more. Materials: £6,500. Labour and overheads: £1,800. That is a loss of £800 on three to four days of skilled work. You would earn more fitting two boilers in the same time.
Costs You Must Not Forget
Survey and design time. A proper heat loss calculation takes 3 to 5 hours of skilled work. Some engineers give this away for free. Charge for it, or at minimum build it into the installation price.
MCS certification costs. Annual fees, inspections, ongoing training — these are real business costs. Spread across your annual installations, they add to your cost per job.
Training investment. Heat pump training courses typically cost £1,000-£3,000. Your pricing needs to recover that investment over time.
The Boiler Upgrade Scheme: A Pricing Opportunity, Not a Margin Squeeze
The Boiler Upgrade Scheme offers homeowners a £7,500 grant towards the cost of a heat pump installation. This is brilliant for your business — if you use it properly.
You price the job at what it is worth. The grant reduces what the customer pays out of pocket.
Using our worked example:
- Your quote: £9,500
- BUS grant: -£7,500
- Customer pays: £2,000
The customer gets a brand new heat pump system for £2,000. That is outstanding value. And you get your £9,500 with a healthy margin built in. Everyone wins.
Here is where it goes wrong. Some engineers see the grant and think: “The customer should not pay much on top.” So they quote £8,000, the customer pays £500, and the engineer has given away their profit to look competitive.
The grant is for the customer’s benefit, not an excuse to cut your margin. Price the job at what it genuinely costs plus a fair profit.
Be aware: there is a cash flow gap between completing the installation and receiving the BUS payment. Make sure you have planned for this — our article on cash flow management for heating businesses covers how to build a buffer for exactly these situations.
Tiered Quoting for Heat Pump Installations
If you have read The Quote Handbook, you will know I am a strong believer in offering customers choices rather than a single take-it-or-leave-it price. Tiered quoting works brilliantly for heat pump installations because there is so much scope to add value.
Example: Three-Tier Heat Pump Quote
Package 1 — Standard Installation: £9,500
- Air source heat pump supplied and installed
- 200L unvented hot water cylinder
- Full heat loss calculation and system design
- MCS certification and BUS grant application
- System commissioning and customer handover
- Manufacturer warranty registered
Package 2 — Complete Package: £10,800
- Everything in Standard, plus:
- Smart thermostat with zoning controls
- 12-month service plan included
- Priority callout for the first year
- Weather compensation setup and optimisation visit after 4 weeks
Package 3 — Premium Package: £12,500
- Everything in Complete, plus:
- Extended 5-year parts and labour warranty
- Annual service included for 3 years
- 24-hour emergency cover
- Annual system performance review and optimisation
- Remote monitoring setup
With the £7,500 BUS grant applied, your customer’s out-of-pocket cost for each tier becomes:
- Standard: £2,000
- Complete: £3,300
- Premium: £5,000
Most customers will seriously consider the Complete package. The jump from £2,000 to £3,300 feels manageable when they are getting smart controls, a service plan, and priority support. And the ones who pick Premium hand you an extra £3,000 of high-margin revenue on a single job.
This is not upselling for the sake of it. Customers genuinely benefit from aftercare and optimisation. You are selling peace of mind — and it is worth paying for.
Stop Racing to the Bottom
There will always be someone willing to quote cheaper. In heat pumps, that is a dangerous game.
A badly installed heat pump does not just lose the customer money — it damages the reputation of the technology. When a system cannot keep the house warm because someone skipped the heat loss calculation, that customer tells everyone heat pumps do not work. Bad for the industry. Bad for your business.
Your value proposition is not “we are the cheapest.” It is this:
- Proper heat loss calculations — so the system is correctly sized
- MCS-certified installation — so the customer qualifies for the grant and has proper consumer protection
- Quality equipment from reputable manufacturers — not the cheapest unit you could find online
- Professional commissioning — so the system runs efficiently from day one
- Aftercare and support — because heat pumps need optimising, especially in the first winter
- Warranty you will actually honour — because you will still be in business in five years
That last point matters. An engineer who underprices every job will not survive long enough to honour a warranty. Your healthy margin is not greed — it is a guarantee you will be around when the customer needs you.
How Your Accountant Fits Into All of This
Heat pumps introduce financial complexity most heating businesses have not dealt with before. Higher job values, higher material costs, different cash flow timing because of the BUS payment cycle, and upfront investment in training and MCS certification.
This is where an accountant who understands your trade makes a real difference.
Tracking profitability by job type. Are your heat pump installations genuinely more profitable than boiler swaps, or are hidden costs eating the margin? Properly set up books give you the answer, job by job.
Managing the BUS cash flow gap. Multiple installations per month means the delay between completing work and receiving grant payments can create a real shortfall. Your accountant should help you forecast and cover this.
Understanding the VAT position. Heat pump installations currently benefit from 0% VAT on certain energy-saving materials in residential properties. Getting this right on your invoices matters for your customer’s cost and your own returns.
Making training costs work for you. Heat pump training, MCS fees, and new equipment are business investments. Your accountant should ensure these are claimed correctly and factored into your pricing.
At Together We Count, we work with plumbing and heating businesses across Sheffield and beyond. The businesses that get pricing right from the start build sustainable, profitable heat pump operations. The ones that guess? They learn expensive lessons.
The Bottom Line
Heat pumps are a genuine growth opportunity for heating businesses. The demand is there, the funding is there, and customers are ready. But the opportunity only works if your pricing works.
Do not quote heat pumps like boiler swaps. Understand every cost. Build in a real profit margin. Use tiered pricing to increase your average job value. And do not let the BUS grant squeeze your margin.
If you want to go deeper on structuring profitable quotes, The Quote Handbook covers the whole process. I wrote it for trades businesses exactly like yours.
Want to make sure your heat pump quotes are actually profitable? Let’s review your numbers together.