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 26.32p/kWh from 1 October to 31 December 2026 (up from 24.67p in April-June), plus a standing charge of 54.83p/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 October 2026. The cap changes quarterly. Figures include 5% VAT, except the October-December electricity figures: Ofgem states there is no VAT on electricity from 1 October 2026 to 31 March 2027.

Gas is the story of 2026: its unit rate is up 39% since spring, with rises at both the July and October resets, while electricity is up about 7%. Both resets moved 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 October-December 2026 cap rates:

• Gas boiler: gas costs 7.97p/kWh, and a boiler delivers slightly less than a kWh of heat per kWh of gas after flue losses, so heat costs about 8.9p per kWh at 90% efficiency.
• Heat pump at SCOP 4.0: electricity costs 26.32p/kWh, divided by 4 = about 6.6p per kWh of heat.
• Heat pump at SCOP 3.5: about 7.5p per kWh of heat, still below 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 current spark gap of roughly 3.3, a heat pump running at SCOP 3.8-4.5 produces heat below gas-boiler cost. Break-even is a SCOP of about 3.0, so design quality decides how much margin you have, and tariffs (next section) can widen 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 further 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 (official median £12,908 for a typical 8kW system, April to June 2026). Combi-to-cylinder conversions and radiator upgrades push the top end.
• Boiler Upgrade Scheme: £7,500 off (£9,000 for off-gas homes replacing oil or LPG, until 31 March 2027), claimed by your MCS-certified installer. Typical out-of-pocket: £500-6,500 (Octopus median quote £4,064, June to September 2026).
• 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:

• Gas has got dearer. The Ofgem cap gas unit rate is up 39% since spring 2026, after rises at both the July and October resets. Nobody can promise where it goes next, but a boiler bought today is a 10-15 year commitment to whatever gas costs.
• 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.