Air Source Heat Pump Running Costs: Real Data from UK Homes

This guide gives you the actual maths, real-world data from the government-funded Electrification of Heat trial and from monitored homes, and the factors that will decide whether your heat pump bills come in at the cheaper or more expensive end of the range.

Annual Running Cost Comparison

For a typical three-bedroom home (DESNZ's figures for England and Wales), here is what you can expect to spend on heating and hot water each year:

These are our own sums, not anyone else's modelling. They use the Ofgem price cap for 1 October to 31 December 2026 and a heat demand band of 9,500 to 10,300 kWh a year: DESNZ's median and mean gas use for a 3-bed home in England and Wales, through a 90% boiler. Half of 3-bed homes with gas use less than the low end; a bigger or draughtier house can use a lot more, so put your own figure in the calculators. The sum in every row is the same: heat demand, divided by the system's efficiency (or, for the heat pump, by its SCOP), times the unit price.

Two caveats on the fuel prices. Oil is BoilerJuice's UK average for a 1,000 litre order: 111.52p a litre on 23 October 2026. BoilerJuice quotes it without VAT, so we add the 5% and divide by 10.35 kWh a litre. LPG has no price cap at all. Ofgem's cap covers only gas and electricity, bulk LPG is a supplier contract, and nobody publishes an average, so 75p a litre is our estimate rather than a quoted rate. If you're on LPG, dig out your last invoice and put your own price into our heat pump savings calculator, because the spread between suppliers is wide. We've left standing charges out. You pay electricity's (about £200 a year) either way; gas's £108 a year only stops if you have the gas supply disconnected.

The Maths Behind Heat Pump Economics

Electricity costs more than gas per kWh, so how can a heat pump be cheaper? It comes down to the coefficient of performance (COP).

What Is COP?

COP is the ratio of heat output to electricity input. A heat pump with a COP of 3.0 produces 3 kWh of heat for every 1 kWh of electricity it consumes. It achieves this by moving heat from the outside air into your home rather than generating heat by burning fuel, the same principle as a fridge working in reverse.

The Per-Unit Heat Cost Calculation

With electricity at 26.32p/kWh and a SCOP of 3.5:

• Cost per kWh of heat from a heat pump: 26.32p / 3.5 = 7.5p per kWh of heat

With gas at 7.97p/kWh and a boiler efficiency of 90%:

• Cost per kWh of heat from a gas boiler: 7.97p / 0.9 = 8.9p per kWh of heat

On a pure per-unit basis, the heat pump is now cheaper. That's recent. Under the April 2026 cap the same sum gave 7.0p for the heat pump against 6.4p for gas, and gas won. The July 2026 cap put gas up sharply and tipped it: 7.5p against 8.1p. The October 2026 cap widened the gap, with gas up 8.7% and electricity up 0.8%, and VAT taken off electricity entirely until 31 March 2027.

The number that decides it is your SCOP. Break-even against a 90% gas boiler is a SCOP of 2.97:

• SCOP 2.5 (a poor install, oversized or running too hot): 10.5p per kWh of heat. Worse than gas.
• SCOP 3.0 (only just above the grant minimum): 8.8p per kWh of heat. About level with gas.
• SCOP 3.5 (a competent install): 7.5p per kWh of heat. About 15% cheaper than gas.
• SCOP 4.0 (low flow temperature, well matched): 6.6p per kWh of heat. About 26% cheaper than gas.

So the technology now beats gas on running cost, but a bad installation still doesn't. Ask any installer for their predicted SCOP in writing, and treat anything under 3.0 as a warning.

One honest complication. The Energy Saving Trust's air source heat pump page still says that on standard tariffs, "where electricity is nearly four times more expensive than gas, heat pumps can cost slightly more to run than new gas or oil boilers". That was true under the April 2026 cap, when electricity cost 4.3 times as much as gas. It isn't true at this one: electricity is now 3.3 times gas. Do the division with the current cap rates and the heat pump wins. If the cap moves the other way in April 2027, it can flip back, and we'll say so when it does.

One further thing widens the gap: a time-of-use tariff, which can cut the cost of the electricity a heat pump uses a long way. See below.

Time-of-Use Tariffs: The Heat Pump Advantage

Standard electricity tariffs charge the same rate day and night. But some offer time-of-use (TOU) tariffs. Cosy Octopus is built for heat pumps; Intelligent Octopus Go is an EV tariff, open only if you have an eligible car and charger, but its cheap hours cover the whole home:

If your heat pump runs mostly during cheap-rate hours, heating the house and the hot water cylinder in the cheap hours so they hold the heat for later, the effective cost per kWh of heat drops sharply. At the 8p/kWh Intelligent Octopus Go overnight rate (EV owners only) with a SCOP of 3.5, heat costs about 2.3p per kWh, against 8.9p from gas. In practice no heat pump runs entirely in the cheap window, so our estimate of a realistic target is a blended rate of around 20p, or roughly 5.7p per kWh of heat.

Factors That Determine Your Actual Running Costs

Your COP in Practice (SCOP)

A headline COP is measured in a test lab at one fixed set of air and water temperatures. In the UK, the more useful figure is the seasonal COP (SCOP), which averages performance across a full heating season, including the cold days when COP drops. On our working figures a well-installed system on correctly sized radiators should land at 3.5 to 4.0. When we checked in October 2026, heatpumpmonitor.org's 307 monitored systems with a full year of data averaged 4.01 units of heat per unit of electricity. A poorly installed system, or one running hotter than it needs to, can come in below the 2.97 break-even, and then it isn't cheaper than gas.

Watch out, too, because "grant-eligible" isn't the same as "cheaper to run". The Boiler Upgrade Scheme regulations set a SCOP of 2.8 as the minimum for a grant-eligible air-to-water heat pump, which is below the 2.97 you need to beat gas.

Insulation Quality

It sets how much heat you need in the first place. As a rough illustration (our example, not a measurement), a detached home with solid walls and no insulation might need 20,000 kWh or more of heat a year, and the same house with wall and loft insulation and double glazing perhaps 10,000 kWh. Halving the heat demand halves your running costs whichever system you use.

Flow Temperature Settings

The hotter the water a heat pump has to make, the less efficient it is. The Energy Saving Trust says lowering the flow temperature "will have a big impact on your running costs", and suggests turning it down a degree at a time through the winter until the house feels too cold, then back up one. If your installer set the flow temperature high to make up for undersized radiators, you pay for that every day. Getting the flow temperature low, through correct radiator sizing, is one of the most valuable things your installer does.

Thermostat Strategy

Heat pumps work best running steadily rather than cycling on and off. The Energy Saving Trust's advice is to keep a steady temperature, run the heat pump for longer periods, and lower the temperature by a few degrees overnight or when you're out rather than turning it off, with weather compensation (the heating curve your installer sets) doing the rest. That's a habit change for most households, but it pays off in lower bills. A smart thermostat that works with your heat pump makes it easier: see our guide to the best smart thermostats for heat pumps.

Real-World Data

A large government-funded UK field trial of domestic heat pumps is the Electrification of Heat Demonstration Project, funded by DESNZ and led by Energy Systems Catapult. It put 742 heat pumps into a deliberately broad mix of housing through Warmworks in Scotland, E.ON in the north east of England and OVO in the south east.

Its headline finding was that heat pumps can be installed successfully in every type of property the project tested, and can run at good efficiencies. Its interim analysis (March 2023) put the median air source system at a seasonal efficiency of 2.94 for the heat pump itself and 2.80 for the whole system (291 systems, fitted in 2020 and 2021). We'd expect a newer install designed for a low flow temperature to do better than that. We also think the spread between a well-designed system in a well-insulated house and a poorly set-up one in a draughty house is wide enough to decide whether you save money or lose it.

For a live view of what UK systems are actually achieving, heatpumpmonitor.org publishes monitored efficiency from real installations, which is the closest thing to an honest benchmark before you sign a quote.

To understand whether your home is likely to sit in the high or low-performance bracket, read our guide on insulating before a heat pump installation, and use our heat pump savings calculator to model your specific costs.

Summary: Will a Heat Pump Save You Money?

• Replacing gas: £130 to £140/yr on fuel at SCOP 3.5, rising to £300 to £320 on a heat pump tariff, before a heat pump's dearer servicing (about £70 a year more at British Gas's prices; the calculator above counts it). On a standard tariff, nothing at all below SCOP 2.97.
• Replacing oil: £550 to £600/yr, and the BUS grant pays an extra £1,500 until March 2027 if you've also got no mains gas connection
• Replacing LPG: £480 to £520/yr on our 75p a litre estimate, so put your own invoice price into the calculator before banking it, and the same extra £1,500 BUS grant until March 2027 if you've no mains gas connection
• Leaky homes: we'd do the cheap insulation first (loft, cavity walls, draughts), because a home that loses heat fast needs a hotter flow temperature, and that pulls the SCOP down

For a detailed breakdown of upfront costs and the full financial case, see our guide on heat pump costs UK. For a room that's slow to warm up, a radiator booster fan can help. Otherwise we'd leave it to steady running and weather compensation rather than turning rooms on and off.