Heat Pump Running Costs

Heat pump running costs compared with other heating

All figures below are energy cost per useful kWh of heat. Standing charges are separate. Heat-pump ranges use 450% efficiency at the cheaper end and 340% at the more expensive end.

I've used Ofgem's East Midlands Direct Debit cap figures for October to December 2026 for standard electricity and gas. For the Octopus examples, I checked quotes for our Lincoln postcode, LN3 4PL, on 10 October. The prices include any applicable tax.

I'll explain the oil and LPG prices below. Snug rates change on 19 October 2026, so get an updated quote before deciding whether it suits you.

Why electricity price is only half the heat-pump calculation

A heat pump moves heat into the home. At 340% seasonal efficiency, each kWh of electricity supplies 3.4kWh of heat. At 450%, it supplies 4.5kWh. Divide the electricity price by that performance figure:

25.36p ÷ 3.4 = 7.46p per kWh of heat
25.36p ÷ 4.5 = 5.64p per kWh of heat

I've used 340% and 450% to show the difference performance makes. 450% is the highest survey estimate I've seen, not a measured annual result from that installation. I'm not promising either figure for every house.

For Heat Geek installations, the performance guarantee is tied to the overall efficiency in your quotation, measured over 12 months and covering heating and hot water, subject to its terms. Read your own quoted figure.

Use seasonal system performance for annual costs, not one impressive reading on a warm afternoon. Our heat-pump efficiency guide explains the difference between COP, SCOP and measured performance.

Gas: allow for boiler efficiency

A boiler does not turn every purchased unit of gas into useful heat. I've used 90% seasonal efficiency for this comparison:

7.82p ÷ 0.90 = 8.69p per kWh of heat

At these prices, a heat pump needs about 292% seasonal efficiency to match that gas energy cost. Above it, the heat costs less. Below it, it costs more. Change either tariff or the boiler efficiency and that break-even point changes too.

Oil: compare litres with heat, not electricity units

I've used 117.90p per litre because that was the BoilerJuice UK average for a 1000-litre delivery when I checked on 10 October, including VAT. Before VAT it was 112.29p. Your Lincolnshire delivery quote could be different.

I've allowed 9.78kWh of energy per litre and 90% boiler efficiency:

117.90p ÷ (9.78 × 0.90) = 13.40p per kWh of heat

I've also included 90p per litre including VAT because oil prices have been fluctuating a lot over the last couple of months. I don't want the heat pump comparison to rely on catching oil on an expensive day:

90p ÷ (9.78 × 0.90) = 10.22p per kWh of heat

Put the price from your own delivery quote into the same calculation. The 90p figure is another example, not a second supplier quote.

LPG: use your actual bulk contract price

I've used 70p per litre including VAT as an example, with 6.78kWh per litre and 90% boiler efficiency:

70p ÷ (6.78 × 0.90) = 11.47p per kWh of heat

I'm not quoting a current LPG offer, so use your own contract price. Tank rental is extra. I've taken the oil and LPG energy contents from Nottingham Energy Partnership, using net calorific values and boiler efficiency on the same basis.

Heat-pump tariffs: show all three prices

I checked Cosy Octopus 12-month fixed for our postcode, LN3 4PL. These were the rates on 10 October. I've used the fixed tariff here, not the variable version.

Eight cheap hours does not tell us how much electricity the heat pump uses during them. For this example, I've put 60% of its electricity use in the cheap periods, 35% at the day rate and 5% at peak:

(0.60 × 14.20p) + (0.35 × 28.95p) + (0.05 × 43.42p)
= 20.82p average electricity price

Divide that by 3.4 or 4.5 and heat costs 6.12p or 4.63p/kWh. I've chosen that split to show how the calculation works. It isn't taken from a customer's electricity readings.

With equal electricity use every hour, the same tariff averages 25.84p/kWh. Joining a heat-pump tariff does not automatically produce the cheapest result.

I still need to keep your home comfortable. Squeezing the heating into short periods can mean hotter water or more overnight running, which changes efficiency. I'd plan the schedule around your house, not assume we can buy every unit at the cheapest rate.

Storage heaters deserve a fair comparison

I don't want to make the heat pump look cheaper by comparing it with full-price electric heating when you actually charge your storage heaters on a cheap overnight tariff.

I checked Snug Octopus variable for LN3 4PL on 10 October. It quoted 8.57p/kWh cheap and 24.80p day-rate. Cheap charging includes 00:30–06:30 plus a one-hour afternoon boost and any extra supplier-scheduled charging. Your heaters and meter need to be compatible.

If all charging is cheap and the released heat is useful, that gives heat at 8.57p/kWh. If 10% comes from day-rate top-ups:

(0.90 × 8.57p) + (0.10 × 24.80p)
= 10.19p per kWh of heat

Storage heaters convert electricity into heat; the issue is whether that heat arrives when you want it. Early overheating or an evening top-up changes the bill. Energy Saving Trust's storage-heater guide explains the controls and charging arrangements.

Storage heaters only heat rooms. Add the separate hot-water cost before comparing them with a heat pump supplying both heating and hot water. Compare the same rooms at the same comfort level too.

Standing charges are separate

I've kept standing charges out of the main comparison so you can see the cost of the heat itself. Here they are separately:

I've multiplied each daily rate by 365 to show the yearly equivalent. That doesn't mean variable charges will stay the same all year. Gas, oil and LPG homes normally already pay an electricity standing charge too.

The gas standing charge only disappears if the gas account ends. Keeping gas for a hob or fire can mean keeping that charge.

A tariff change affects the rest of your electricity too. Check appliances, EV charging and any solar export arrangements, as well as heating. Compare contract terms and exit fees before switching.

How much does a heat pump cost to run per year?

To work out your yearly cost, I need to know how much heat your home uses. I've used 10000kWh of useful heat here to show the calculation. That would cost about £564 to £746 in heat-pump electricity on the standard tariff, excluding standing charges. I'm not saying every home needs that amount of heat.

Annual useful heat ÷ seasonal efficiency
× electricity price in £/kWh
= annual heating electricity cost

Twice the heat demand means twice the energy cost if the other assumptions stay the same. A cold month's bill is not one-twelfth of the annual total, and a summer reading is not a winter forecast.

For heating and hot water together, include both demands and use performance covering both. Pumps, controls and any direct-electric backup also need to be included in the estimate's electricity use.

Servicing, installation and finance are separate costs. Our heat-pump installation cost guide covers the upfront work.

What I look at before quoting running costs

• The building: room heat losses, practical insulation improvements and draughts.
• The heating design: radiator or UFH output, flow temperature, pipework and controls.
• How you live: occupied hours, room temperatures and hot-water use.
• Your prices: actual fuel bills and the electricity tariff you can use.

Lower flow temperatures improve heat-pump efficiency. The radiators or underfloor heating must still deliver enough heat to keep the rooms warm. That is a design job, not a reason to turn everything down and sit in a coat.

For an existing Vaillant installation, our Vaillant settings guide explains schedules, setbacks and weather-curve adjustments.

The fuel you replace changes the saving. It does not decide the heat pump's own running cost. That comes back to heat demand, performance and the electricity actually bought.