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

Heat Pump Running Costs UK 2026: The Honest Numbers

Running cost comparisons for heat pumps are often misleading. Some manufacturers cherry-pick ideal conditions; some critics focus on worst-case scenarios. This guide gives you the actual maths, the real-world data from organisations including the Energy Saving Trust, and the factors that will determine 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 semi-detached home in the UK with reasonable insulation, here is what you can expect to spend on heating and hot water each year:

These aren't borrowed from anyone's modelling: they're worked out from the Ofgem price cap for 1 October to 31 December 2026 and a heat demand band of 10,500 to 15,000 kWh a year, which covers most three-bed semis. Take the low end of each row as the well-insulated case and the high end as the draughty one. The sum in every row is the same: heat demand, divided by the system's efficiency (or multiplied by nothing at all in the heat pump's case, where you divide by the SCOP instead), times the unit price.

Two caveats on the fuel prices. Oil uses 113.52p/litre, the UK average for a 1,000 litre order on boilerjuice.com, divided by 10.35 kWh/litre. LPG has no published price cap at all: bulk LPG is a supplier contract, not a regulated tariff, so 11p/kWh is an indicative mid-range figure rather than a quoted rate. If you're on LPG, dig out your last invoice and redo the row with your own number, because the spread between suppliers is wide. Standing charges are excluded throughout so the fuel comparison is like for like; add roughly £200 a year of electricity standing charge and £108 of gas standing charge if you want the full bill.

The Maths Behind Heat Pump Economics

Understanding why heat pumps can be cheaper despite electricity costing more than gas requires understanding 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 is new. Under the April 2026 cap the same sum gave 8.2p for the heat pump against 6.1p for gas, and gas won comfortably. The October 2026 cap put gas up 8.7% and electricity up 0.8%, and took VAT off electricity entirely until 31 March 2027, which closed the gap and then crossed it.

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 (MCS minimum territory): 8.8p. Level with gas.
• SCOP 3.5 (a competent install): 7.5p. About 15% cheaper than gas.
• SCOP 4.0 (low flow temperature, well matched): 6.6p. About 26% cheaper.

So the honest answer is that the technology now beats gas on running cost, but a bad installation still does not. 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 for years, and it was true as recently as the July 2026 cap. It isn't true at this one: electricity is now 3.3 times gas, not four, because gas rose 8.7% while electricity rose 0.8% and lost its VAT until 31 March 2027. 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.

Two further things widen the gap:

1. Heat pump homes use less heat. Installing a heat pump typically coincides with improved insulation and radiator upgrades, reducing the total heat demand of the home. A home that needed 14,000 kWh of heat per year from a gas boiler may only need 10,000 kWh after insulation improvements.
2. Time-of-use tariffs can cut electricity costs dramatically. See below.

Time-of-Use Tariffs: The Heat Pump Advantage

Standard electricity tariffs charge the same rate day and night. But several suppliers now offer time-of-use (TOU) tariffs specifically designed to work with heat pumps and home batteries:

If your heat pump runs primarily during cheap-rate hours, using the thermal mass of the house and the hot water cylinder as a battery, the effective cost per kWh of heat drops sharply. At the 8p/kWh Intelligent Octopus Go overnight rate 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 treat a blended rate of around 20p, and roughly 5.7p per kWh of heat, as the realistic target.

Factors That Determine Your Actual Running Costs

Your COP in Practice (SCOP)

The headline COP figure is measured in a laboratory at a fixed air temperature and a fixed flow temperature, usually 7°C air in and 35°C water out (A7/W35). In the UK, the more useful figure is the seasonal COP (SCOP), which averages performance across a full heating season including cold winter days when COP drops. A well-installed system on correctly sized radiators should land at 3.5 to 4.0; heatpumpmonitor.org's real-world average across monitored UK air source installs sits around 3.87. A poorly installed system, or one running at unnecessarily high flow temperatures, may achieve SCOP of only 2.0–2.5, at which point it is not cheaper than gas. MCS sets 2.8 as the floor for a grant-eligible air-to-water unit, which is below the 2.97 you need to beat gas, so "MCS compliant" is not the same as "cheaper to run".

Insulation Quality

This is the single biggest variable. A detached home with solid walls and no insulation may have a heat demand of 20,000+ kWh per year. The same house with cavity wall insulation, loft insulation, and double glazing may need only 10,000 kWh. Halving the heat demand halves your running costs regardless of which system you use.

Flow Temperature Settings

Every 1°C increase in flow temperature reduces COP by approximately 2.5%. If your installer sets the flow temperature to 55°C rather than the optimal 45°C (perhaps to compensate for undersized radiators), you're losing about 25% of your efficiency, which is roughly the whole margin over gas. Getting the flow temperature right, through correct radiator sizing, is the single most valuable thing your installer does.

Thermostat Strategy

Heat pumps perform best when run continuously at a lower setpoint rather than cycling on and off. Setting your thermostat to 19°C all day and letting weather compensation do the rest is more efficient than turning the heating off while you are at work and cranking it up in the evening. This is a habit change for most households, but it pays off in lower bills. A smart thermostat with OpenTherm support makes this easier. See our guide to the best smart thermostats for heat pumps.

Real-World Data

The biggest UK field trial of domestic heat pumps is the Electrification of Heat Demonstration Project, funded by DESNZ and run by Energy Systems Catapult, which put 742 heat pumps into a deliberately broad mix of housing through Warmworks in Scotland, E.ON in the north east and OVO in the south east. It's worth knowing this one by name, because it gets misattributed to the Energy Saving Trust constantly and it isn't theirs.

Its headline finding was that heat pumps could be installed successfully in every property type tested, and could run at good efficiencies. The per-site efficiency numbers are in the published datasets rather than in a single quotable average, and we're not going to invent one here: what the trial does establish is that 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 SCOPs 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: £140–£200/yr at SCOP 3.5, rising to £330–£470 on a heat pump tariff. Nothing at all below SCOP 2.97.
• Replacing oil: £560–£810/yr, and the BUS grant pays an extra £1,500 until March 2027 if you've also got no mains gas connection
• Replacing LPG: £520–£750/yr on an 11p/kWh assumption, so check your own invoice before banking it
• Homes needing insulation first: savings only materialise after the insulation work, because insulation is what gets your SCOP above break-even

For a detailed breakdown of upfront costs and the full financial case, see our guide on heat pump costs UK. To squeeze more savings from your system, consider smart TRVs for per-room control and radiator booster fans for rooms that are slow to warm up.