Historically, the conventional way of heating buildings has always involved the burning of a solid fuel (wood or coal). During the last century oil, gas and electricity have also played their part. It was not until the oil crisis of the '70s that we started to think of ways of reducing our reliance and over-consumption of energy, as it was realised that fossil fuels were not an infinite resource. Another factor that has currently become a major concern is the fact that the burning of these fuels on such a vast scale is almost certainly causing global temperature rises.
There has been a very slow adoption of renewables from solar, wind etc. but these technologies have only relatively recently become more developed and hence more affordable.
Heat pumps are not a true renewable as they
require an energy input, this seldom comes from
a truly renewable source since it is usually
from the mains electricity supply. However,
the total heat energy output is several times
that of the power input, so a large proportion
of the available heat is derived from the renewable
source outside. Even when the ineficiencies
of power stations are considered, the overall
picture can be advantageous. Therefore they
are often referred to as renewable and have
become a major player in the quest to reduce
CO2 emissions.
To assess the viability of a heat pump system we need to evaluate the actual efficiency of the heat pump system (which can vary greatly) and compare it to the running costs of heating with other fuels. We then need to evaluate this against the capital cost of the system. It should be noted that a heat pump's working lifetime should significantly exceed that of a boiler, this is due to its inherent internal cleanliness, and low working temperatures.
HOW EFFICIENT IS MY HEAT PUMP GOING TO BE?
We usually use the term "coefficient of
performance" (COP) to describe a heat pump's
efficiency. A COP of 3.5 is typical i.e. 1 kilowatt
(kW) of power input will provide 3.5 kW of useful
output. This is equivalent to 350% efficiency.
(Remember, we are extracting heat from outside
to make this possible). Efficiency (COP) will
depend to a large extent on the type of application.
In general, the closer the difference in temperature
between the source and the sink, the higher
the efficiency. e.g. a COP of 5 can be attained
with a good heat pump with a spring source feeding
well designed underfloor heating in an ECO-insulated
house. However, COP as low as 2 may result if
you heat bath water from an air source system
in winter.
EFFICIENCY GRAPH.
This is very important.

It is VITAL to understand how the efficiency is affected by the water temperatures as shown on this graph.
The above graph shows how important it is to keep the heated water temperature as low as possible. To attain a COP of 4, it is necessary to keep the heated water down to 35°C. This is only possible with a good underfloor heating system. If radiators are used, then they must be significantly oversized (e.g. doubled) to keep the temperature down as far as possible. The red line shows how much the efficiency improves if spring water is used. Unfortunately, this is not commonly available. The difference between the two lines demonstrates how important it is to have a large ground collector area that will keep the source water as high as possible.If you happen to have ground that has a lot of ground-water, especially if it is moving, then a heat pump system is likely to be very viable for you.
The maximum temperature limit that a heat pump can reach is sometimes misunderstood. Heat pumps could actually reach 75°C or more if we design them to do so (hot enough for standard radiator sizing). However, when reaching such high temperatures the efficiency drops dramatically. This is true for all heat pumps, there is no way around this physical constraint.
To make an analogy, it would be easy to make a car that is capable of going up very steep inclines, but it would have terrible energy efficiency whilst doing so, it would be more sensible to avoid the necessity to go up such a steep slope.
The point we are trying to emphasise is that the lower the temperature of the water you heat, the cheaper it will be to run.
HEATING HOT WATER (Domestic Hot Water - DHW)
The above paragraph may lead you to believe that heating bath water etc. is going to be energy inefficient. It will be much less efficient than what's possible with space heating using underfloor heating, however, one must consider what the alternatives are for heating. An immersion heater, for example, would be much less efficient than any heat pump system. (equivalent to a COP of 1). So a heat pump will be far more efficient than an immersion heater. For this reason, most heat pump units have the facility to produce hot water.
In the past, the major heat demand for buildings has been for room heating, however, as buildings become more highly insulated, then the room-heating requirents drop. The hot water(DHW) demand is now becoming a larger 'chunk' of the total, so it becomes more important to optimise this operational part of the heat pump. Good cylinder designs with very large heat-exchangers and careful sensor positioning are key to ensuring the best efficiencies in this area.
WHAT ABOUT RUNNING COSTS?
Nearly all heat pumps use electricity to drive them. This is a relatively expensive fuel. Currently, in the UK, you will need an overall COP of 3.5 to break even on fuel costs using day-rate electricity compared to a very good gas heating system. Using a percentage of cheaper "off-peak" electricity can make the figures more attractive for the heat pump. The recent rise in oil prices has meant that a heat pump is a viable replacement for an oil boiler.

Notes and assumptions.
It is now quite difficult to compare fuel prices
due to 2-tier pricing. Furthermore prices are
changing rapidly. please check your local supplier.
Oil cost 55p/ litre.( 2008), LPG, 39p/ lit.
Electricity 12.5p/unit
Gas condensing boiler efficiency 90%
Oil boiler efficiency 85%
LPG condensing boiler efficiency 88%
Electricity 100% efficient at point of use. Off peak 85% at point of use. (Note, the efficiency for off-peak heating is less than 100% since unnecessarily high temperatures at night are inevitable. This varies from 60% in a badly insulated house to 95% in a super-insulated house.)
Boiler efficiencies are probably a little optimistic for real-life conditions.
The COP (coefficient of performance) of a heat pump is the ratio of input to output.
It is really the last decade's cheap fuel prices that have hindered the growth of this technology here in the UK. Scandinavia, Germany and Canada are among the many countries where heat pumps are commonplace. The number of installations world-wide runs into millions, including some as big as 50 megawatts in countries such as Sweden. For the future, we may see gas-powered heat pumps becoming viable alternatives to conventional boilers. These are still in the development stage.