Heat Pump Running Costs

A heat pump in a typical UK home costs around £800 to £1,050 a year to run on a single-rate electricity tariff, which makes it one of the cheapest electric heating options available¹. That figure covers an average flat or small home, and it sits alongside installation costs of £6,000 to £18,000 for the same kind of property¹. On top of the electricity bill, a heat pump needs servicing, which typically costs around £150².

Whether that beats a gas boiler is the question most people actually arrive with, and the honest answer is that the two are close at current prices. Official guidance states that heat pumps currently have similar running costs to gas boilers³, while other government advice says running costs for heat pumps are typically lower than for traditional gas boilers⁴. A House of Commons Public Accounts Committee summary cuts the other way, noting that electricity prices mean heat pumps can be more expensive to run⁵. All three statements can be true at once, because the outcome in a particular home depends on three things: how much heat the home needs, how efficiently the heat pump delivers it, and what you pay for each unit of electricity.

This page takes those three ingredients one at a time, so you can see how the bill is built and what moves it. It also covers the tariffs that can cut heat pump running costs sharply, the hybrid option of keeping a boiler alongside a heat pump, and what running costs look like across the whole life of the system.

£800 to £1,050 a year: the typical running cost

The headline figure comes from the Centre for Sustainable Energy, which puts heat pump running costs at around £800 to £1,050 a year for an average flat or small home on a single-rate tariff, alongside installation costs of £6,000 to £18,000¹. That range is wide because it spans very different homes: a small flat with low heat demand sits near the bottom, a larger or leakier home near the top.

Two further costs sit around that figure. Servicing typically costs around £150, varying with the type of heat pump². Nesta's cost analysis also builds annual maintenance into running cost comparisons, at £120 for heat pumps for five years while the system is under warranty, against £80 a year for gas boilers across their lifetime¹⁰.

Where you live matters too. Nesta's analysis found that heat pump running costs in Scotland, particularly in the north, run 7 to 12 per cent higher than the UK baseline, equivalent to £110 to £280 more per year¹⁰. That reflects colder average temperatures and higher heat demand, not any difference in the equipment.

The single most useful lever inside that range is efficiency. Increasing heat pump efficiency by 10 per cent typically reduces running costs by around 8 per cent, equivalent to between £65 and £150 per year¹⁰. That is why the rest of this page spends so much time on the seasonal performance factor: it is the number that decides where in the £800 to £1,050 band, or outside it, a particular home lands.

How a heat pump compares with a gas boiler at current prices

The comparison with gas is not settled, and the official record itself contains all three answers. A Parliamentary research briefing states plainly: "Heat pumps currently have similar running costs to gas boilers."³ Government advice on domestic heating takes a more favourable view: "While running costs for heat pumps are typically lower when compared to those of traditional gas boilers, if a system is" poorly designed or installed, that advantage can be lost⁴. The Public Accounts Committee summary warns that "electricity prices mean that heat pumps can be more expensive to run"⁵.

The reason all three positions coexist is the price ratio between gas and electricity. Electricity costs several times more per kWh than gas, so a heat pump must be several times more efficient than a boiler just to draw level. A modern gas boiler converts fuel to heat at close to 1:1; a heat pump needs an SPF of roughly 3 or better to compete at typical tariff ratios. Homes with a well-performing system on a good tariff come out cheaper than gas; homes with a poorly performing system on a standard tariff come out worse.

The upfront comparison is far less ambiguous. At around £11,600, an average heat pump is currently four times more expensive than a gas boiler¹¹, and the Welsh Government's draft heat strategy makes the same point, noting heat pumps currently cost more than gas boilers while current energy tariffs limit the financial case¹².

There is also a warning worth stating before any switch. Croydon Council's retrofit guidance notes: "If your home is not well-insulated, installing a heat pump may increase your energy bills instead. This is because elect"ricity is more expensive than gas¹³. Northern Ireland's building regulations discussion document makes a similar point, modelling a case "with running costs increasing by as much as 20%."¹⁴ Insulation and heat demand come before the heat pump, not after it.

How the price cap influences your energy bills

Because a heat pump runs on electricity, the electricity unit rate is the single biggest external driver of the running cost. For most households that rate is set by the energy price cap, which Ofgem revises every three months¹⁵.

The cap is widely misunderstood, so it is worth being precise about what it does. It sets the maximum amount a supplier can charge for a unit of energy and the daily standing charge together¹⁵. It protects people on standard variable tariffs, where the unit rate can go up or down with the energy market¹⁵. It does not limit the total bill: "It does not limit the cost of your total bill. The more energy you use, the higher your bill will be."¹⁵ A heat pump household using several thousand kWh of electricity a year is exposed to every unit of that use.

The cap level varies by where you live, payment method, fuel type and meter type¹⁵, and a separate cap is set for each of the 14 supply regions of Great Britain¹⁶. Typical consumption for cap figures is assumed to be 2,500 kWh for electricity and 9,500 kWh for gas¹⁷, which is worth knowing because a heat pump home's electricity use may exceed that assumed figure.

Recent cap levels give the scale. For 1 January to 31 March 2026, the electricity unit rate under the cap was 27.69p per kWh with a 54.75p daily standing charge, and the cap made a typical dual-fuel direct debit bill around £1,758 a year⁷. Ofgem confirmed the cap for 1 April to June 2026 would fall by 7%, with estimates suggesting it would stay roughly the same until the end of the year⁷. Smart Energy GB's figures for the April to June 2026 quarter put the electricity unit rate at 24.67p per kWh with a 54.83p daily standing charge, and a typical 2 to 3 bedroom house paying by direct debit at £1,641 a year on gas and electricity¹⁸. The two sets of figures differ because they describe different quarters and different typical-bill assumptions⁷.

What is inside the cap matters for anyone hoping electricity will get cheaper. Network costs make up around one quarter of the total¹⁶, and the government cut policy costs in April 2026 by ending a levy-funded energy efficiency scheme and shifting the largest renewable generation support scheme to general taxation¹⁶. The cap's history explains the volatility households have lived through: it rose 54% in April 2022 amid rapid increases in wholesale prices¹⁷, and CIPHE notes that further price rises of 80% were forecast to take average costs to £3,549 in October 2022, up from £1,277 in October 2021¹⁹.

Seasonal performance factor: the figure that forecasts your costs

The seasonal performance factor is the efficiency figure that matters for running costs. Alongside it you will see a Seasonal Coefficient of Performance (SCoP) or Seasonal Performance Factor (SPF), which shows the heat pump's efficiency averaged across the whole year rather than at any single moment²⁰. An SPF of 4.0 means that for every 1 kWh of electricity consumed, the heat pump delivers 4 kWh of heat⁶.

The arithmetic is simple: annual heat demand divided by SPF gives annual electricity use, and multiplying by the unit rate gives the heating bill. The Centre for Alternative Technology's worked examples show how it plays out. A heat pump with an SPF of 3.5 on a variable tariff averaging about 20p per kWh costs about 5.7p per kWh of heat, and about 6.5p per kWh of delivered heat on the same SPF²¹. If an SPF of 4 can be achieved, the running cost falls to about 5.5p per kWh of heat²¹.

What should you expect? Energy Saving Trust says heat pumps tend to run with an SPF of 3.1, but a good quality installation that is managed well and controlled appropriately can get an SPF significantly higher than 3.1, sometimes more than 4². The scheme rules set the floor: heat pumps installed under the Boiler Upgrade Scheme must have a SCOP of at least 2.8²², and air source systems under the Domestic RHI needed a minimum SPF of 2.5²³.

Real homes show a very wide spread. Indicative SPF values recorded from systems' own monitoring during home visits ranged from 1.3 to 5.8⁶. That range is the whole story of heat pump running costs: a system at the bottom of it uses more than four times as much electricity per unit of heat as one at the top.

Ground source systems change the efficiency picture. A typical ground source heat pump can generate 3.5 to 4.5 units of heat for each unit of electricity it uses²⁴. Which?'s worked example assumes a COP of 4.0 and puts the annual cost of electricity for heating and hot water at £588, from 2,382.75 kWh at 24.67p per kWh²⁴. Higher efficiency, though, comes with higher installation cost, which is covered on our ground source heat pump costs page.

One administrative point worth knowing: the Boiler Upgrade Scheme's product eligibility list does not consider SCOP, and installers need to calculate this separately²⁵. The grant paperwork alone will not tell you what efficiency to expect.

Reasons household running costs differ

The £800 to £1,050 range exists because no two homes ask the same thing of a heat pump. The drivers, in rough order of importance:

• Heat demand. The amount of heat a home needs each year is the starting point, and it is set by size, insulation, airtightness and the local climate. Scotland's colder north runs 7 to 12 per cent higher in running costs, £110 to £280 a year, for this reason¹⁰.
• System efficiency. The SPF achieved in practice, which depends on design, flow temperature, emitter sizes and control settings. Monitored systems range from 1.3 to 5.8⁶.
• Electricity tariff. The unit rate, and whether it varies by time of day. The cap's electricity rate was 27.69p per kWh for January to March 2026⁷, and 24.67p per kWh for April to June 2026¹⁸.
• Insulation. A poorly insulated home may see bills rise after a heat pump goes in, because electricity is more expensive than gas¹³, with Northern Ireland's consultation modelling increases of as much as 20%¹⁴.

The performance gap deserves its own emphasis. Government analysis of systems observed during home visits found that the gap between expected and actual performance "is equivalent to several hundred pounds a year in running costs for a typical fuel poor home"⁶. That is not a marginal effect: it is the difference between a heat pump that beats gas comfortably and one that loses to it.

The efficiency lever compounds with everything else. Increasing heat pump efficiency by 10 per cent typically reduces running costs by around 8 per cent, worth £65 to £150 a year¹⁰. Flow temperature, radiator sizing and controls all feed into that, which is why our pages on heat pump sizing, radiators and emitters and heat pump controls cover these decisions in detail.

Where tariffs offer the largest saving

The tariff is the one input a household can change without touching the hardware, and its effect is large. Energy Saving Trust's guidance states that switching to a heat pump time-of-use tariff is expected to reduce the cost of running the heat pump, making it more likely that a household will save money compared with gas²⁰.

The choice depends on what else the home has:

• Heat pump only. Dynamic tariffs and dedicated heat pump tariffs are the relevant options²⁶. These offer cheaper rates at times a heat pump can be scheduled to run, and a heat pump's thermal inertia means a home stays warm through the expensive periods.
• Heat pump with a battery. A heat pump tariff that includes a peak rate can work in the household's favour, because the battery can power the heat pump during the expensive period²⁶.
• Heat pump with solar panels and a battery. The same logic applies: a peak rate lets the battery carry the home, and the solar generation, through the costly hours²⁶.

The price cap's relationship to these tariffs needs stating clearly. The cap protects standard variable tariffs¹⁵; it does not extend to fixed tariffs¹⁵, and time-of-use and dynamic tariffs have their own rate structures. A household on a heat pump tariff is trading the cap's flat protection for lower rates at chosen times, which works out well when the heat pump is set up to exploit it and poorly when it is not.

For a household thinking about energy independence, this is also the point where solar and storage change the economics of a heat pump rather than just complementing it. Our page on solar panels and a battery with a heat pump covers that combination in detail.

How alternative systems compare on cost

A hybrid heating system pairs a heat pump with a boiler, and its running costs sit in an awkward middle ground. Cadent's analysis of hybrid heating found that "the cost to run a hybrid heating system could be c.10% more compared to a standalone heat pump" at the current spark gap between gas and electricity prices, for typical energy consumption²⁷. The same report notes that "hybrid heating offers marginal running cost savings (c.2%) over a full heat pump" when standing charges are excluded²⁷.

So a hybrid is not a running-cost bargain: it costs a little more to run than a full heat pump in most analyses, and only marginally less under favourable assumptions. What it offers instead is a lower upfront commitment. Cadent reports that "hybrid installations typically cost 30-40% less than standalone air-source heat pumps."²⁷ DESNZ analysis behind that figure is the reason hybrids appeal to households that want to electrify part of their heating without the full installation cost.

The trade-off for energy independence is the mirror image of the cost one: a hybrid keeps the gas connection, so the household remains exposed to gas prices and the gas network for part of its heat. A full heat pump removes that dependence entirely but keeps the household fully exposed to electricity prices instead. Neither option removes dependence on an energy supplier; both change which fuel and which price series the household is exposed to. Our hybrid heat pumps page covers the practicalities, and the comparison of hybrid versus full heat pump costs looks at the numbers in more depth.

Lifetime running costs of a heat pump

Running costs are the largest part of what a heat pump costs over its life, not a footnote to the purchase. Government analysis citing Nesta estimates that upfront, running and installation costs make up approximately 15 to 20%, 55 to 65% and 20% respectively of the total cost of a heat pump over its lifetime under current policy and market conditions⁸. In other words, the electricity a heat pump consumes over its life costs roughly three times what the unit itself does.

That makes the tariff and efficiency decisions from earlier sections the dominant financial decisions, not the purchase price. It also explains why subsidy design matters so much: Nesta's later analysis of an air source heat pump with subsidy put the annualised total at £960, split into upfront costs of £300, maintenance costs of £80 and running costs of £580²⁸. When the upfront cost is subsidised, running costs become more than half of what remains.

Scottish analysis of heat pumps on subscription shows how financing changes the lifetime picture. A heat pump bought outright plus routine maintenance totals £11,950 over the lifetime of the product; the same system on a loan plus maintenance totals £12,750, on a 15 year loan £14,550, and on a 15 year lease £16,200²⁹. The financing choice can cost more than the difference between a good and a mediocre installation.

For context on how past schemes offset running costs, the Renewable Energy Consumer Code's RHI guidance gives worked examples: an air source heat pump with a deemed heat demand of 10,000 kWh and an SPF of 2.5 earned £445.20 a year, £3,116.40 over the lifetime of the RHI, which ran for 7 years; a ground source system at the same heat demand with an SPF of 3.4 earned £9,492.70 over the same period³⁰. The Domestic RHI closed to new applicants, but the structure shows how directly payments tracked heat demand and efficiency, the same two variables that drive running costs.

Matching gas heating costs by 2035 with no policy shift

The running cost gap between heat pumps and gas is a policy variable as much as a technical one, and it has a date attached. Energy Saving Trust's assessment of what the UK needs from the Warm Homes Plan states that "without policy intervention, the running cost of heat pumps will not reach parity with a gas boiler until 2035."⁹

That single sentence carries a lot. It means the current near-parity described in official guidance³ is not expected to become clear, comfortable parity on its own. It also means the levers that would close the gap sooner are known: the ratio of electricity to gas prices, which is shaped by how policy and network costs are allocated between fuels¹⁶, and the efficiency of installed systems, which is shaped by design, installation quality and controls².

For a household weighing a switch, the practical reading is this. A heat pump bought today will not get cheaper to run relative to gas on its own, but the household's own choices, tariff, insulation, system quality, controls, can move its running cost by more than the expected drift in the price ratio. The heat pump versus gas boiler running cost comparison covers the head-to-head in more detail, and our page on heat pumps and household energy independence sets out what switching means for dependence on the gas network, the grid and a supplier.