UK commercial heat pumps — May 2026

Commercial heat pumps UK — cost, funding, solar integration realities.

UK commercial heat pumps are £80k-£600k assets that bundle materially better with solar PV than either does alone. Salix loans, Local Growth Fund, Welsh Industrial Decarbonisation, Scottish IETF for high-temperature industrial — the active 2026 stack still works.

Three commercial heat pump types — different costs and applications

Air-source heat pumps (ASHP) — most common

Extract heat from outdoor air. Lower install cost — typically £80,000-£250,000 for 200-500kW thermal output. Output temperature 50-65°C. Suitable for most UK commercial space heating and DHW. Performance falls in cold weather — UK COP typically 2.8-3.5 in winter. Major UK ASHP brands: Mitsubishi Ecodan, Daikin Altherma, Vaillant aroTHERM, Samsung EHS, LG Therma V.

Ground-source heat pumps (GSHP)

Extract heat from boreholes or horizontal ground loops. Higher install cost (£120,000-£600,000) due to drilling but lower running cost (COP 3.5-4.5 consistent). Suitable for sites with available land. Standard for new-build large commercial estates. Major UK GSHP brands: Kensa, NIBE, ECOFOREST, Ground Sun.

High-temperature industrial heat pumps

Output 75-100°C+ for process heat applications (food processing, pharma, distilling, ceramics, paper). Higher cost (£150,000-£500,000) and lower COP than space-heating heat pumps. Major UK suppliers: Mitsubishi Heavy Industries, Hitachi, Star Refrigeration, Mayekawa.

For the full price breakdown — cost per kW thermal by capacity, what drives the bill, running cost vs gas and net cost after funding — see our dedicated commercial heat pump cost guide.

UK commercial heat pump funding stack 2026

Salix BAU loans — interest-free loans for public sector heat pump retrofit, repaid from energy savings. Salix detail.
Local Growth Fund — 11 Mayoral Strategic Authority areas. Detail.
Scottish IETF (SIETF) — still active for Scottish industrial high-temperature heat pumps
Welsh Industrial Decarbonisation programmes — Welsh Government, active
Full Expensing — heat pump plant qualifies, 25% effective tax saving
Boiler Upgrade Scheme (BUS) — primarily domestic, some non-domestic micro-business eligibility
Closed (existing awards delivering only): PSDS Phase 4, English IETF

Why bundle commercial heat pumps with solar PV

For commercial sites considering decarbonisation, bundling solar PV + heat pump retrofit + (sometimes) battery storage typically delivers materially better outcomes than either alone:

Carbon scoring on grant applications

PSDS (when active) scored on tCO2e per £100k of grant. Solar alone typically scored 4.0-5.5 tCO2e/£100k — below threshold. Heat pump alone scored 8-12 tCO2e/£100k — above threshold. Solar + heat pump bundled scored 7-9 tCO2e/£100k — comfortably above threshold and politically easier than heat-pump-only because the package is incremental. Same scoring logic applies to Salix BAU loans, Scottish IETF, Welsh Industrial Decarbonisation.

Self-consumption uplift on solar

Commercial heat pumps draw continuous electricity from the grid (or from solar). This raises solar self-consumption rates from typical 65-75% to 80-90% on sites where solar capacity is well-matched to demand. Higher self-consumption = better solar economics.

Integrated DNO procurement

One G99 application covering both solar PV export and heat pump electricity demand is typically 8-15% cheaper per kW than two separate applications.

Worked example — typical UK commercial heat pump + solar package

A UK SME manufacturing site replacing a 220kW gas boiler with ASHP and adding 350kWp solar PV:

Heat pump capex: £180,000 (ASHP + hydronic retrofit + plant room work)
Solar PV capex: £245,000 (350kWp turnkey)
Combined capex: £425,000
Full Expensing tax saving (25%): £106,250
0% VAT applied at install
Net cost: £318,750
Annual gas savings (post heat pump): £62,000 (against £42,000 of additional electricity, net £20,000)
Annual electricity savings (post solar PV): £85,000
Combined annual savings: £105,000
Payback: 3.0 years
Annual carbon savings: ~410 tCO2e

Sector-specific heat pump fit

Manufacturing — high-temperature process heat may exceed heat pump capability; hybrid systems common
Food processing — pasteurisation, sterilisation, evaporation often above heat pump range; lower-grade processes (CIP, hot water) heat-pump-friendly
Distilleries — mashing and DHW heat-pump-friendly; distillation typically not
Breweries — refrigeration heat recovery + ASHP for ancillary heat is common
NHS — major Salix-funded ASHP retrofit programme across UK NHS estate
Schools — ASHP + fabric upgrades dominant retrofit pattern
Care homes — 24/7 demand fits heat pumps well
Hotels — DHW + space heating heat-pump-friendly; PPA-funded structures emerging

Commercial solar panels — primary bundling partner
Commercial battery storage — three-way bundle PV + battery + heat pump
Salix funding — primary public sector route
Full Expensing — applies to heat pump plant

Free funding review

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Commercial heat pump FAQs

How much do commercial heat pumps cost in the UK in 2026?

UK commercial heat pump costs vary materially by capacity and type. Air-source commercial heat pumps (most common): £80,000-£250,000 for typical 200-500kW thermal capacity systems. Ground-source: £120,000-£600,000 for similar capacity (higher install cost due to boreholes/loops). High-temperature commercial heat pumps (for >75°C process heat): £150,000-£500,000. Hybrid systems (heat pump + gas backup) sit in the middle. Includes hydronic retrofit (radiators, pipework upgrades) which adds 30-60% to the heat pump capex on retrofit projects.

Are commercial heat pumps eligible for grant funding in 2026?

Yes — multiple active routes. (1) Boiler Upgrade Scheme (BUS) — though primarily domestic, some non-domestic micro-business uses qualify. (2) Salix BAU loans — interest-free loans for public sector heat pump retrofit, repaid from energy savings. (3) Local Growth Fund — capital grants in 11 Mayoral Authority areas. (4) Industrial Energy Transformation Fund (Scottish IETF — still active for Scottish sites only) for high-temperature industrial heat pumps. (5) Welsh Industrial Decarbonisation programmes for Welsh sites. (6) Full Expensing — heat pump plant qualifies for Full Expensing tax relief. The English IETF (which covered industrial heat pumps) closed Spring 2024.

Why install commercial heat pumps alongside solar PV?

Three reasons. (1) Carbon scoring — bundled PV + heat pump packages score materially better on PSDS, IETF (where active), Salix loan applications. The bundling is the difference between losing and winning grant scoring. (2) Self-consumption uplift — heat pumps are continuous electricity load that lifts solar self-consumption rates. (3) Integrated DNO procurement — single G99 application covering combined PV + heat pump electricity demand is cheaper than separate applications. Most major UK public sector decarbonisation packages now include both.

What's the difference between air-source and ground-source commercial heat pumps?

Air-source heat pumps (ASHP) extract heat from outdoor air. Lower install cost (typically £80-250k for 200-500kW thermal). Output temperature 50-65°C — suitable for most space heating but limited for high-temperature process heat. Performance falls in cold weather (Coefficient of Performance ~2.8-3.5 in UK winter). Ground-source heat pumps (GSHP) extract heat from boreholes or horizontal loops underground. Higher install cost (£120-600k for similar capacity) due to drilling. Output temperature 50-60°C. More consistent performance through winter (COP ~3.5-4.5). Better for sites with available land for ground arrays.

Can commercial heat pumps replace gas boilers fully?

For low-temperature space heating and DHW (under 65°C), yes. UK commercial buildings retrofitted with ASHP or GSHP plus appropriate hydronic upgrades typically achieve 100% heat pump operation. For high-temperature process heat (>75°C — common in food processing, pharma, distilling, ceramics, paper), full replacement is harder. High-temperature commercial heat pumps now exist (output 90°C+) but are more expensive and less efficient. Hybrid systems (heat pump for base load, gas or electric resistance for peak) are common where full electrification isn't economically viable.

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