Which? published an article on 26 November 2024 setting out calculations showing that a heat pump can be the cheapest way to heat a home when a government grant and a specialist electricity tariff are combined. The consumer body said the figures came from Dr Jan Rosenow, principal and European programme director at the Regulatory Assistance Project.
"Data shows that with the right combination of funding and energy tariff, a heat pump really can be the cheapest way to heat your home"
On upfront cost, Which? reported that the government-funded Boiler Upgrade Scheme provides a discount of £7,500 on the upfront price for homeowners in England and Wales, usable when replacing an existing fossil fuel heating system, and that an MCS-certified installer must apply for the grant on the householder's behalf1. In Scotland, the Home Energy Scotland grant and loan scheme offers up to £7,500 for air-source heat pumps plus an additional £1,500 for households that qualify for a rural uplift, with the remainder potentially offered as an interest-free loan up to £7,5001. Which? noted that some suppliers claim installation prices as low as £500 with the grant, but that most homes are likely to pay more because of insulation, radiator upgrades and other extras1.
On running costs, Which? gave the energy price cap at the time of writing as 24.50p/kWh for electricity and 6.24p/kWh for gas, and the typical UK boiler as running at approximately 85% efficiency1. It reported that a heat pump with a seasonal coefficient of performance (SCoP) of 2.9 or more has lower running costs than a typical gas boiler, and that even the most efficient gas boiler at 92% efficiency can be beaten by a heat pump with a SCoP of 3.1 or more1. At standard capped prices, a heat pump at SCoP 4.0 could save £259 a year1.
The larger savings come from specialist tariffs. Using the Octopus Agile tariff at an average electricity unit price of 21.57p/kWh, Which? reported savings of £214 a year at SCoP 3.0 or £395 a year at SCoP 4.0 compared with a gas boiler1. On OVO's Heat Pump Plus tariff, which offers 15p/kWh for the energy used by the heat pump only, with a standard rate for all other energy use, it reported savings of £434 for a SCoP 3.0 heat pump and £560 for SCoP 4.01. Which? noted that the Heat Pump Plus tariff is only available as an add-on to customers who install a heat pump through the OVO/Heat Geek offer, or who have a compatible heat pump as listed on the OVO website1.
| Tariff | Heat pump rate | Savings vs gas boiler (SCoP 3.0 / 4.0) |
|---|---|---|
| Standard price cap | 24.50p/kWh | £259 a year at SCoP 4.0 |
| Octopus Agile | 21.57p/kWh average | £214 / £395 a year |
| OVO Heat Pump Plus | 15p/kWh for heat pump use | £434 / £560 a year |
Which? also listed other heat pump tariffs: EDF Energy's Heat Pump Tracker, advertised as a trial, gives six hours of low-cost electricity daily (4am-7am, 1pm-4pm) with a discount of 10p/kWh off the standard regional rate during those hours1; Good Energy's fixed-term heat pump tariff supplies 100% renewable electricity at 10p/kWh for seven hours every day (5am-9am, 1pm-4pm) and charges 29.79p/kWh at all other times1; and Octopus Energy's Cosy tariff provides eight hours of cheaper off-peak electricity daily across three periods (4am-7am, 1pm-4pm, 10pm-midnight), which it says is 51% cheaper than the standard day rate1. Which? warned that Cosy's 4pm-7pm peak rate is charged at 45% above the regional day rate1. ScottishPower's Heat Pump Saver tariff has a cheaper rate of 14p/kWh between 11am and 4pm every day, with a standard rate for the remaining hours1. Which? said a smart meter recording half-hourly consumption is needed for these tariffs1.
Why it matters for households
The figures turn on two separate numbers: what a home pays to have a heat pump fitted, and what it pays to run one. The Boiler Upgrade Scheme reduces the first, and a heat pump tariff reduces the second by cutting the price of the electricity the heat pump uses, which is the main reason heat pumps have been seen as expensive to run against gas. For a household weighing up heat pump versus gas boiler running costs, the reported savings range from £214 to £560 a year depending on the tariff and the efficiency the heat pump achieves in practice. That efficiency, expressed as SCoP, is not fixed: it depends on the home, the system and the weather, and Which? noted criticism that heat pumps do not always perform at SCoP 4.0 in cold weather1. The tariff conditions also matter, since some rates apply only to heat pump consumption, only to certain customers, or carry high peak rates that penalise evening use. Households on oil or other fossil fuels, rather than mains gas, face a different comparison again, and the sources do not give equivalent running-cost figures for those fuels.
What happens next
Which? described EDF Energy's Heat Pump Tracker tariff as currently advertised as a trial, and said it expects heat pump tariffs from other energy suppliers as more switching options become available1. No end date for the Boiler Upgrade Scheme or for any of the tariffs was reported.