Heat network vs your own heat pump: an honest comparison for commercial buildings

If you're responsible for a commercial building that runs on gas, you'll eventually have to replace that heating with something low-carbon. In parts of England, heat network zoning may make the choice for you. Elsewhere, and in the meantime, you'll usually be weighing two realistic options: connect to a heat network (district heating) or install your own heat pump. Neither is always better. This guide compares them as fairly as we can.

The two options in brief

A heat network brings hot water to your building through insulated pipes from a central energy centre. A substation or heat interface unit in your plant room transfers that heat into your building's own pipework. The network operator owns and runs the heat source, which could be a large heat pump, waste heat, or something else. You pay a connection charge and then ongoing heat charges.

Your own heat pump sits on your roof, in a plant compound or in the plant room, taking heat from the air, the ground or a water source. You buy it, house it, power it and maintain it. You pay upfront and then for electricity and servicing.

Both work best with a heating system that runs at lower temperatures than a traditional gas boiler system. So many of the changes inside your building, such as upgraded emitters, rebalancing and new controls, are needed whichever way you go.

A side-by-side summary

Factor	Heat network	Your own heat pump
Upfront cost	Connection charge plus secondary-side works	Plant, installation, electrical upgrade plus secondary-side works
Space	Small substation in plant room	External units or ground loops, plus plant room space
Noise and planning	Little on site; network handles its own consents	External units may raise noise and planning issues
Grid capacity	Usually no extra electrical load at your building	May need a bigger electricity supply
Running cost drivers	Standing charge, unit rate, indexation	Electricity price, system efficiency
Maintenance risk	Mostly with the network operator	With you
Control	Shared, governed by contract	Full
Carbon	Depends on the network's heat source over time	Depends on grid electricity and efficiency
Zoning fit	Is the outcome zoning aims for	Could support an exemption if installed in time

The rest of this guide explains each line.

Upfront cost drivers

For a heat network, the main upfront items are the connection charge and the works inside your building. The connection charge depends on distance from the main, the route, and the size of your demand. Our guide to connection costs breaks these down.

For a heat pump, you pay for the heat pump itself, installation, any structural work to support it, buffer vessels and controls, and potentially a new or larger electricity connection. Larger buildings may need several units in a cascade, and hot water may need a separate solution if the main units can't reach the temperatures your system needs.

We don't quote prices because they vary so much. Get real quotes for both options from people who have seen your building.

Space, roof and plant room

This is often where heat pumps struggle in dense city centres. Air source units need open air around them, which means roof space or a ground-level compound. Ground source systems need boreholes or ground loops, which need land and a ground investigation. Water source needs access to a river, canal or aquifer.

A heat network substation is comparatively compact and sits indoors. Removing boilers can free up plant room space, and you avoid putting new equipment on the roof. For a hotel, office or hospital where roof space is already taken by chillers, plant and solar panels, this can be decisive.

Noise and planning

External heat pump units have fans and compressors. In residential neighbourhoods or near bedrooms, noise needs careful design and may attract planning conditions. Larger installations, listed buildings and conservation areas may need planning permission or listed building consent. Check with your local planning authority early.

With a heat network, the noisy plant is in the energy centre, which the network developer consents and runs. Your on-site impact is mainly the pipe route and the substation.

Electrical grid capacity

A heat pump replaces gas with electricity, so your building's electrical demand rises, sometimes a lot. If your existing supply can't take it, you'll need to apply to the local network operator for more capacity. In some areas that can involve long waits and significant reinforcement costs. Find out your current maximum demand and supply capacity before you commit.

Connecting to a heat network generally avoids this at your building, because the electrical load sits at the energy centre. That's the network operator's problem, not yours.

Efficiency and running cost drivers

A heat pump's running cost depends on the electricity price you pay and how efficiently the system works across the year. Efficiency falls when the heat pump has to produce hotter water or work in cold weather, which is why low flow temperatures matter so much.

A heat network's running cost depends on the standing charge, the unit rate, and how both are indexed over time. Large network heat sources can be very efficient, and some networks use waste heat that would otherwise be lost. Whether that turns into a good price for you depends on the contract.

The only reliable way to compare is a whole-life cost appraisal over 15 to 25 years using real figures. Our connection costs guide walks through a clearly hypothetical example.

Maintenance and who carries the risk

With your own heat pump, you own the risk. If a compressor fails in January, you arrange and pay for the repair and any temporary heating. You'll need a maintenance contract with someone who knows the kit, and you'll face major component replacement at some point.

With a heat network, the operator maintains the heat source and usually the substation, depending on your contract. You swap plant risk for counterparty risk: you rely on the operator to perform. That's where regulation helps. Ofgem became the heat network regulator on 27 January 2026[source], and the Energy Ombudsman accepts heat network disputes, usually after 8 weeks with the supplier[source]. Technical standards are being added through the Heat Network Technical Assurance Scheme, with a planned launch in 2027, phased in[source].

Control and resilience

Owning your own plant means full control. You choose the kit, set the temperatures, pick the maintenance contractor, and can change course later. For some organisations, such as hospitals and data-heavy sites, that independence matters a lot.

A heat network means a long contract with one supplier. Within a zone, the zone developer is appointed through competition, with exclusive rights to develop a heat network in the zone delivery area[source], so there's no competing network to switch to. In return, larger networks typically have multiple heat sources and backup plant, which can make them more resilient than a single building's system. Ask any network about its backup arrangements and service levels.

Carbon

A heat pump's carbon footprint falls as the electricity grid decarbonises. A well-designed system in a well-controlled building can be very low-carbon today.

A heat network's carbon depends on its heat source. Some older schemes still run on gas combined heat and power. Newer ones use heat pumps, waste heat or energy from waste. A network can change its heat source later without touching your building, which is part of the government's case for them. The government wants heat networks to provide 7% of England's heat (27 TWh) by 2035[source]. Ask any network for its current and planned carbon intensity.

How each fits with zoning

Zoning is not law yet. The regulations are not yet laid before Parliament[source], and no zones have been designated yet. But the policy direction matters for your decision now.

If your building falls into the category of existing non-domestic buildings with a wet heating system and average heat demand above 100 MWh a year[source], it could be required to connect once your area becomes a zone. One of the proposed exemption grounds is existing low-carbon heating with an expected lifespan of more than 2 years[source]. A heat pump would normally count as low-carbon heating, though the regulations will define the term and it isn't yet clear how hybrid systems with gas top-up will be treated.

So installing a heat pump now could matter. If it's in place with plenty of life left when a heat network connection notice arrives, you may be able to claim that exemption. If you're still on old gas boilers, you're more likely to be required to connect. Our guide to exemptions and deferrals explains the grounds in full.

Don't install a heat pump purely to avoid a network, though. The exemption is tied to the plant's remaining life, so the question comes back when the heat pump wears out. If a network is coming and would be a good deal, you may end up paying twice.

When each option tends to suit

A heat network tends to suit buildings in dense urban areas near a planned or existing network, with limited roof or outdoor space, tight electrical capacity, and an owner who would rather not run heating plant. It also suits buildings whose boilers are near the end of their life just as a network arrives.

Your own heat pump tends to suit buildings with plenty of space, adequate electrical capacity, no network nearby, and an owner who values control. It also suits sites where boilers need replacing well before any zone is likely.

If you're unsure, a feasibility study from heat network consultants can compare both options for your building, and design and engineering specialists can check what your secondary side needs. Our zone checker shows how far zoning work has got in your area.