Heat Pump Running Costs vs Gas Boiler

The question everyone asks: "Will a heat pump actually save me money on energy bills?" The answer depends on several factors, but for most UK homes, the answer is yes. Here's the full breakdown.

Understanding the Maths

At first glance, heat pumps seem more expensive to run because electricity costs more than gas:

• Electricity: ~24p per kWh (standard tariff)
• Gas: ~6p per kWh

So electricity is 4x more expensive. But here's the key: heat pumps are 3-4x more efficient than gas boilers.

• Gas boiler efficiency: 90% (0.9 kWh heat per 1 kWh gas)
• Heat pump efficiency: 300-400% (3-4 kWh heat per 1 kWh electricity)

This changes everything:

• Gas effective cost: 6p ÷ 0.9 = 6.7p per kWh of heat
• Heat pump effective cost: 24p ÷ 3.5 = 6.9p per kWh of heat

At standard rates, they're almost identical. But with heat pump tariffs offering cheaper electricity, heat pumps win.

Annual Cost Comparison by Home Size

Home Type	Heat Pump	Gas Boiler	Annual Saving
2-bed flat	£500-£700	£600-£850	£100-£150
3-bed semi	£750-£950	£950-£1,200	£200-£250
4-bed detached	£950-£1,200	£1,200-£1,500	£250-£300
5-bed large	£1,100-£1,400	£1,400-£1,800	£300-£400

Based on January 2026 energy prices and typical UK consumption.

Heat Pump Electricity Tariffs

Several energy suppliers offer special tariffs for heat pump owners with significantly cheaper off-peak rates:

• Octopus Cosy: Cheaper rates 4am-7am, 1pm-4pm, 10pm-7am
• Octopus Go: 7.5p/kWh between 12:30am-4:30am
• EDF Heat Pump Plus: Discounted rate for heat pump usage
• Ovo Heat Pump Plan: Off-peak rates for overnight heating

With smart controls, your heat pump can do most of its work during cheap rate periods, reducing costs by 20-30%.

Real Example: 3-Bed Semi-Detached

Cost Element	Heat Pump	Gas Boiler
Annual heat demand	12,000 kWh	12,000 kWh
System efficiency	350% (COP 3.5)	90%
Energy needed	3,430 kWh electricity	13,330 kWh gas
Unit cost	24p/kWh	6p/kWh
Annual fuel cost	£823	£800
Standing charges	£0 (already paying)	£110/year
Total annual cost	£823	£910

With a heat pump tariff (average 18p/kWh):

3,430 kWh × 18p = £617/year — saving £293 compared to gas

Add Solar Panels for Maximum Savings

If you have or add solar panels, your heat pump running costs drop dramatically:

• A 4kW solar system generates ~3,400 kWh/year
• This can cover most or all of your heat pump's electricity needs
• Excess generation can be stored in batteries or exported
• Some households achieve near-zero heating costs

Future Outlook: Why Heat Pumps Will Win

Several factors suggest heat pump running costs will become even more favourable:

• Electricity prices falling: More renewable generation is reducing wholesale costs
• Gas prices volatile: Dependence on international markets creates uncertainty
• Carbon taxes coming: Gas will likely face carbon charges, increasing costs
• 2035 gas boiler ban: Gas infrastructure investment will decline
• Heat pump efficiency improving: New models achieve COP of 4-5

Frequently Asked Questions

Is a heat pump cheaper to run than a gas boiler?

In most cases, yes. A typical home spends £750-900/year running a heat pump vs £950-1,200/year for gas, saving £200-300/year. With heat pump tariffs, savings can reach £400-500/year.

How much electricity does a heat pump use per year?

A typical UK home uses 3,000-5,000 kWh of electricity per year for a heat pump. At 24p/kWh, that's £720-1,200/year.

Why are heat pumps cheaper despite electricity costing more?

Heat pumps are 3-4x more efficient than gas boilers. While electricity costs ~24p/kWh vs gas at ~6p/kWh, a heat pump delivers 3-4 kWh of heat per 1 kWh of electricity, making effective cost similar or lower.