Heat Pump Running Costs: What You'll Actually Pay in 2026

What does a heat pump cost to run?

A typical air source heat pump costs £800–£1,200 per year to run in the UK, depending on your property size, insulation quality, and electricity tariff. That compares to roughly £1,000–£1,400 for a gas boiler — 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 current electricity rates of 24.5p/kWh:

1–2 bedroom flat or terrace: £500–£700 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: £750–£950 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: £1,000–£1,400 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 24.5p/kWh make heat pumps only marginally cheaper than gas. But switch to a time-of-use tariff and the economics change dramatically.

Octopus Cozy offers a dedicated heat pump rate around 10p/kWh for heating hours. That would drop a typical 3-bed home from £900/year to under £400.

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.

Heat pump vs gas boiler: the honest comparison

At face value, a heat pump saves £100–£300 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.

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.

Use our heat pump calculator to get a personalised estimate based on your property.