Heat Pump Running Costs UK (2026)

This is the part that confuses most people. Electricity costs 24.5p per kWh. Gas costs 6.5p per kWh. So how can an electric heat pump be cheaper to run than a gas boiler? The answer is efficiency.

A gas boiler burns gas at around 90% efficiency. For every £1 of gas you buy, you get about 90p worth of heat. The rest goes up the flue as waste.

A heat pump uses electricity at 300%+ efficiency (COP 3.2). For every £1 of electricity you buy, you get about £3.20 worth of heat. It doesn't create this extra energy — it extracts it from the outdoor air or ground.

Let's do the calculation for 1 kWh of heat:

• Gas boiler: 1 kWh ÷ 0.90 efficiency = 1.11 kWh of gas needed. At 6.5p/kWh = 7.2p per kWh of heat
• Heat pump: 1 kWh ÷ 3.2 COP = 0.31 kWh of electricity needed. At 24.5p/kWh = 7.7p per kWh of heat
• Oil boiler: 1 kWh ÷ 0.85 efficiency = 1.18 kWh of oil needed. At 7.5p/kWh = 8.8p per kWh of heat

At current rates, a heat pump's cost per kWh of heat is very close to gas and significantly cheaper than oil. But this calculation uses average figures. In practice, your actual costs depend on your home's heat demand, your heat pump's real-world COP, and whether you're on a specialist heat pump electricity tariff.

When you switch from a gas boiler to a heat pump, your electricity bill goes up and your gas bill goes to zero (or near-zero if you still use gas for cooking). The net effect for most homes is a lower total energy bill.

Important: If you cancel your gas supply entirely, you save the gas standing charge (£115 per year at current rates). This is a real saving that's often overlooked. However, you'll still pay the electricity standing charge.

Heat pump electricity tariffs are available from some suppliers, offering a lower electricity rate for heat pump users. These can reduce running costs by 10–20%. Ask your supplier about dedicated heat pump tariffs, or check if you qualify for the government's proposed rebalancing of energy levies (shifting costs from electricity to gas, which would make heat pumps even cheaper to run).

If you're currently heating with oil, a heat pump will almost certainly save you money from day one. Oil costs approximately 7.5p per kWh, and oil boilers are typically 80–85% efficient. That gives an effective cost of 8.8–9.4p per kWh of heat — significantly more than a heat pump's 7.7p.

For a home using 18,000 kWh of heat per year (typical for a detached property on oil), the annual saving is approximately £500–£1,200. Over 20 years, that's £10,000–£24,000 in savings — comfortably covering the net installation cost after the BUS grant.

Oil prices are also volatile, having swung from 30p/litre to over 90p/litre in recent years. Electricity prices are more stable, giving you more predictable heating costs.

LPG costs approximately 8.5p per kWh, with boiler efficiency around 85–90%. The effective cost per kWh of heat is 9.4–10p — making LPG the most expensive common heating fuel in the UK. Switching to a heat pump saves £400–£1,000 per year for a typical home.

You also reclaim the space used by the LPG tank and avoid the inconvenience of arranging deliveries. If you're off the mains gas grid and currently on LPG, a heat pump is almost always the most cost-effective heating upgrade.

Electric storage heaters use electricity at 100% efficiency — 1 kWh in, 1 kWh of heat out. A heat pump uses electricity at 300%+ efficiency. This means switching from storage heaters to a heat pump could reduce your electricity consumption for heating by up to two-thirds.

For a home currently spending £1,500–£2,000 per year on electric heating, a heat pump could bring this down to £500–£700. That's a saving of £800–£1,300 per year — the fastest payback of any heating switch.

1. Your home's heat demand

The biggest factor. A well-insulated 2-bed terrace might need 7,500 kWh of heat per year. A poorly insulated 4-bed detached home might need 22,000 kWh. Better insulation means lower heat demand and lower running costs.

2. Your heat pump's COP

A heat pump with a real-world COP of 3.5 costs less to run than one with a COP of 2.8. COP is influenced by the heat pump model, installation quality, flow temperature settings, and outdoor temperature. Keeping the flow temperature low (35–45°C) is the single best way to maximise COP.

3. Your electricity tariff

Standard electricity costs 24.5p/kWh. Some suppliers offer heat pump tariffs at 20–22p/kWh. Time-of-use tariffs (like Octopus Agile) can be even cheaper if you heat your home during off-peak hours. Smart controls can help you take advantage of cheaper electricity periods.

4. Solar panels

If you have solar panels, some of the electricity powering your heat pump is free. A typical 4 kWp solar system generates 3,400–4,000 kWh per year. While not all of this will coincide with heating demand, it can reduce heat pump running costs by 20–40%.

5. Maintenance costs

Annual servicing costs £100–£200. This is comparable to a gas boiler service (£80–£120) and cheaper than oil boiler servicing (£100–£200 plus potential filter and nozzle replacements).

Your heat pump heats both your home and your hot water. Hot water typically accounts for about 15–20% of total heating energy use. The heat pump heats a cylinder to around 50–55°C, with a periodic legionella pasteurisation cycle to 60°C.

In summer, when space heating is off, your heat pump still runs to heat water. Summer electricity costs for hot water are typically £10–£15 per month. The heat pump's standby power consumption (controllers, circulation pumps) is minimal — around 50–100 watts.