Heat Pump Running Costs UK: Real Numbers for 2026

Three things set what an air source heat pump costs you per year:

1. Your electricity price. The Ofgem cap puts default-tariff electricity at 24.67p/kWh (April-June 2026), rising to 26.11p from 1 July 2026, plus a standing charge of 57.21p/day. Those are direct debit averages; your tariff may differ, and the cap resets quarterly. Time-of-use tariffs aimed at heat pump homes offer cheaper windows, which matters a lot at heat pump consumption levels.

2. Your SCOP. A well-designed system achieves a seasonal efficiency of 3.8-4.5: each kWh of electricity becomes 3.8-4.5kWh of heat. Design quality (sizing, radiators, flow temperature) is what separates the top of that band from the bottom; see our sizing guide.

3. Your heat demand. How much heat your home needs across the year: insulation, size, location and how warm you keep it. This number is yours, not the heat pump's; a boiler serving the same house faces the same demand.

Accurate as at June 2026. The cap changes quarterly; domestic energy carries 5% VAT, included in these figures.

The July 2026 change is the story: gas up 27% in one quarter (pushing typical dual-fuel bills up around 13%) while electricity rises about 6%. Every such reset changes the heat pump comparison in the same direction, because heat pump economics improve whenever gas rises faster than electricity.

The clean way to compare is the cost of one kWh of heat into your rooms. Indicative arithmetic at the July-September 2026 cap rates:

• Gas boiler: gas costs 7.33p/kWh, and a boiler delivers slightly less than a kWh of heat per kWh of gas after flue losses, so heat costs a little over 7.33p per kWh.
• Heat pump at SCOP 4.0: electricity costs 26.11p/kWh, divided by 4 = about 6.5p per kWh of heat.
• Heat pump at SCOP 3.5: about 7.5p per kWh of heat, roughly level with gas.
• Heat pump at SCOP 4.5: about 5.8p per kWh of heat, clearly ahead.

Indicative, on cap unit rates only. Standing charges apply on both fuels and are covered below.

That is the whole game in four bullet points: at the 2026 spark gap of roughly 3.6-4.3, a heat pump running at SCOP 3.8-4.5 produces heat at or below gas-boiler cost. Design quality decides which side of the line you land on, and tariffs (next section) can move you well past it.

The cap arithmetic above assumes you pay the default rate for every kWh. Heat pump households increasingly do not:

• Heat pump time-of-use tariffs: several suppliers offer tariffs with discounted windows designed around heat pump running patterns. Rates and structures change too often to print here, but the effect is to cut the average price you pay per kWh below the cap rate, pushing heat-pump heat clearly below gas cost.
• Smart scheduling: heating a well-insulated home and a hot water cylinder slightly ahead of need, in cheaper windows, is exactly what heat pump controls are good at.
• Solar: panels make daytime running partially self-supplied; each self-used kWh displaces a full-price one and only forgoes the export rate (see our SEG guide).

One honest note on standing charges: an all-electric home pays one standing charge; a gas-plus-electric home pays two. Going all-electric and eventually dropping the gas connection removes the gas standing charge from your life entirely. We treat that as a bonus rather than headline maths because connection decisions have their own timing; the point is the direction.

Running costs only matter alongside what the system costs to install. Indicative June 2026, England and Wales:

• Installed price before support: £8,000-14,000 typical (Ofgem-reported average around £12,500 for an 8kW system, January 2026). Combi-to-cylinder conversions and radiator upgrades push the top end.
• Boiler Upgrade Scheme: £7,500 off (£9,000 for oil/LPG homes from 21 July 2026), claimed by your MCS-certified installer. Typical out-of-pocket: £500-6,500 (Octopus average around £4,460; simple swaps near £1,000).
• VAT: 0% on residential installations until 31 March 2027, then 5%.
• Scotland: up to £7,500 grant (plus £1,500 rural uplift) and an optional £7,500 interest-free loan via Home Energy Scotland.

Full scheme rules in our BUS guide and grants round-up.

We deliberately do not print a single "you will save £X per year" figure, because it depends on your heat demand, your SCOP and your tariff. What we can say structurally:

• The gas direction of travel is up. The July 2026 cap moved gas 27% in one quarter. A boiler bought today is a 10-15 year commitment to that trajectory.
• The heat pump's fuel is shoppable. Electricity tariffs compete hard, time-of-use products keep improving, and solar lets you generate some of your own. Gas offers none of those levers.
• The capital gap has collapsed. With £7,500-9,000 of grant and 0% VAT, the switch premium over a like-for-like boiler swap is small for many homes, and the running-cost arithmetic does the rest over the system's life.

To see the comparison for your own usage, run the gas boiler vs heat pump calculator, then get free quotes from local installers to put a real post-grant price next to it.