What does a heat pump cost to run?
A typical air source heat pump costs £860-£1,290 per year to run in the UK, depending on your property size, insulation quality, and electricity tariff. That compares to roughly £950-£1,450 for a gas boiler at the current gas cap rate of 7.97p/kWh - modest savings on standard tariffs, but the gap widens significantly with smart tariff use.
The key figure is the Coefficient of Performance (COP). A modern air source heat pump achieves a seasonal COP of 3.0-4.0, meaning for every 1kWh of electricity it uses, it produces 3-4kWh of heat. Ground source heat pumps do even better, typically hitting a COP of 4.0-5.0.
Running costs by property size
Here's what you can realistically expect to pay annually based on property type, assuming average insulation and the Ofgem price cap electricity rate of 26.32p/kWh for 1 October to 31 December 2026:
1-2 bedroom flat or terrace: £540-£750 per year. A small property with lower heat demand sees the best payback from a heat pump. You might need as little as a 5kW unit.
3 bedroom semi-detached: £810-£1,020 per year. The most common UK property type, and where most heat pump installations happen. An 8-10kW unit is typical.
4+ bedroom detached house: £1,075-£1,500 per year. Larger properties need bigger units (10-16kW) and running costs approach gas boiler territory unless you optimise your tariff.
How to cut heat pump running costs
The biggest lever you have is your electricity tariff. Standard variable rates of 26.32p/kWh make heat pumps only marginally cheaper than gas. But switch to a time-of-use tariff and the economics change dramatically.
Octopus Cosy offers a dedicated heat pump rate around 10p/kWh for heating hours. That would drop a typical 3-bed home from around £915/year to under £400. To access these heat-pump-friendly tariffs you'll need a working SMETS2 smart meter — see do smart meters save you money for the practical savings, or smart meter problems UK if your current meter has gone "dumb" after a switch. To estimate the Cosy/Intelligent saving for your specific bill in two minutes, plug it into our smart meter savings calculator. If you also run an EV, our best EV tariff UK 2026 comparison covers when an EV-specific tariff like Intelligent Go beats Cosy and vice versa.
Economy 7 / Economy 10 tariffs give you cheaper overnight rates of 12-15p/kWh, ideal since heat pumps work efficiently at lower outputs overnight, heating your home gradually.
Solar panels are the other game-changer. A 4kW solar array generates roughly 3,400kWh per year in the UK. Combined with a heat pump, your heating can be virtually free during spring and autumn months when solar output is strong and heating demand is moderate. Adding a home battery lets you store cheap daytime electricity (or surplus solar) and run the heat pump on it after dark — see our solar battery storage guide for sizing and payback. See our solar panel costs guide for a full breakdown of what you would pay and the payback period. A cheaper alternative to a battery for hot water specifically is a solar diverter, which routes surplus generation straight to an immersion heater in the cylinder instead of exporting it at low SEG rates — see our immersion heater running costs guide for what that hot water would otherwise cost you.
Heat pump vs gas boiler: the honest comparison
At face value, a heat pump saves £100-£200 per year over a gas boiler on running costs alone. That's not a dramatic saving, and it's the honest truth that many comparison sites gloss over. It is also worth knowing that the gas figure assumes a boiler running efficiently - most are set too hot to condense, so turning the boiler flow temperature down narrows the gap before you spend anything.
But the full picture is more nuanced. Gas prices have been volatile - they doubled in 2022 and remain above historical averages. Electricity prices are more stable and trending downward as renewable generation increases. The direction of travel clearly favours heat pumps.
Factor in the £7,500 BUS grant and 0% VAT (confirmed until March 2027), and the installation cost of an air source heat pump is often comparable to replacing a gas boiler. At that point, even modest running cost savings make the investment worthwhile.
The bottom line
If you're replacing a working boiler just to save on running costs, the payback period is long - 10-15 years on standard tariffs. But if your boiler is due for replacement anyway, the grant makes a heat pump the financially sensible choice. Pair it with a smart tariff and the running costs genuinely beat gas.
A smart thermostat is the cheapest control upgrade you can make alongside a heat pump - our guide to whether smart thermostats save money works through what the trials actually measured. Use our heat pump calculator to get a personalised estimate based on your property. For a full breakdown of installation prices and what the BUS grant covers, read our heat pump costs guide. And if you are thinking about improving your home's insulation first, our guides to cavity wall insulation costs, loft insulation costs and floor insulation costs are a good starting point - better insulation means lower running costs from day one.
See what a heat pump would cost you
Your property, your current heating, the £7,500 grant included — no email required.