Heat pump running costs, worked out properly

The maths in one line

A heat pump’s running cost per kWh of heat is simply the electricity price divided by its seasonal efficiency. A boiler’s is the fuel price divided by its efficiency. Everything else — the tariff, the weather, the house — feeds into one of those two numbers.

At the Ofgem cap for 1 October to 31 December 2026, the GB average Direct Debit unit rate is 26.32p per kWh for electricity and 7.97p for gas, with daily standing charges of 54.83p and 29.68p. Heating oil averaged 109.3p a litre for 1,000 litres on 28 September 2026 (BoilerJuice). Those are the inputs below; your own tariff and region will differ.

Cost per kWh of heat

A year of heating: an illustrative example

The pattern is the headline: roughly level with gas, clearly cheaper than oil, and around a third of the cost of direct electric heating. Use the calculator for your own heat demand — your installer’s heat-loss survey gives the annual figure, and your energy bills give a rough cross-check.

SCOP: the number that decides it

The seasonal coefficient of performance (SCOP) is the average amount of heat a heat pump delivers per unit of electricity over a heating season. At SCOP 3 one kWh of electricity becomes three of heat; at 3.5, three and a half. The difference between those two designs is about £151 a year in our example.

SCOP falls as the water temperature the heat pump has to produce rises. That is why radiator sizing matters: bigger radiators let the system run at a lower flow temperature, and a lower flow temperature means a higher SCOP. Ask every installer to write down the design flow temperature and the expected SCOP for your house; it is the single most useful number for comparing quotes on running cost.

Tariffs and standing charges

The price cap is only the default. The Energy Saving Trust says that on standard electricity tariffs, where electricity is nearly four times the price of gas, heat pumps can cost slightly more to run than new gas or oil boilers — but that switching to a heat-pump time-of-use tariff can reduce running costs significantly. Tariffs change often, so compare what is available when your system is commissioned rather than relying on any figure printed today.

Standing charges matter too. If you remove the gas supply entirely after switching, you stop paying the gas standing charge — about £108 a year at the current cap. If you keep gas for cooking, you keep paying it.

The zero-VAT window on electricity

From 1 October 2026 to 31 March 2027, household electricity in Great Britain carries no VAT; Ofgem’s cap figures above already reflect that. Gas still carries VAT. So any running-cost comparison made during this window flatters heat pumps and direct electric heating slightly. When the window ends, unless it is extended, electricity prices rise by the VAT and the heat pump advantage narrows. We would plan on the post-window figure.

Keeping running costs down

• Let it run low and steady. Heat pumps are most efficient maintaining a temperature rather than blasting heat for short periods.
• Use weather compensation if your controls have it — it lowers the flow temperature on milder days.
• Insulate where you can. Ofgem’s guidance notes that heat pumps perform best in a well-insulated home.
• Check the tariff once the system is running, and again when your deal ends.
• Ask for a handover that explains the controls; many poor results come from boiler habits.

If you are replacing oil or LPG, the grant is £9,000 rather than £7,500 for applications made by the uplift deadline — see the off-gas grant. For the full cost picture, read the air source heat pump cost after the grant and whether it is worth it.