It’s a comforting story. Unfortunately, the evidence just doesn’t back it up.

We recently did some analysis  on real-world installation cost data from MCS accredited installers. And what it shows is pretty stark. Since 2022, average heat pump installation costs have not followed any clear downward trend. In cash terms, costs remain stubbornly high. Adjust for inflation and the picture doesn’t improve much - any modest early reductions have faded, and costs are now creeping back up again.

That matters, because government policy assumed something very different. Official modelling baked in real-terms cost reductions of around 20–25% by the mid‑2020s, with heat pumps eventually approaching cost parity with gas boilers. By early 2026, reality is nowhere near that. By March 2026, real-terms costs are down less than one percent.

So, what’s going on?

The simple answer is that installing a heat pump isn’t like rolling smartphones off a production line. Most of the cost sits in installation, not the kit itself. UK homes are hugely varied, often old, and rarely heat‑pump‑ready. That means bespoke pipework, new radiators, upgraded hot water systems and lots of skilled labour. There’s only so much you can “standardise” that away.

More volume alone doesn’t magically fix that. Subsidies have increased activity, but they haven’t unlocked the big efficiency gains policymakers hoped for but were warned would be unlikely to occur.

The implications are uncomfortable. If costs don’t fall, heat pump uptake remains grant‑led, not market‑led. Capital subsidies start to look permanent rather than transitional. And the long‑term bill to the public purse gets bigger, not smaller.

Perhaps most importantly, net zero relies on honest assumptions. It does always seem that assumptions made were always conveniently in favour of the all-electric scenario favoured by some.

None of this means heat pumps don’t have a role. They absolutely do. But a credible path to decarbonising heat needs realism, not wishful thinking and a genuinely technology‑neutral approach that recognises heat pumps won’t be the right or affordable option for every home.