Heat Pump vs Boiler: 15-Year Cost Comparison

The Real Costs Right Now

Here's what you're actually looking at when comparing a new gas boiler to an air source heat pump, using the Ofgem price cap for 1 October to 31 December 2026:

A gas boiler runs at about 90% efficiency (newer A-rated condensing boilers hit 92–94%, but real-world drops a point or two). A decent air source heat pump delivers a Seasonal Coefficient of Performance (SCOP) of 3.0 to 4.0, meaning for every 1 kWh of electricity it consumes, you get 3–4 kWh of heat out. That is what lets a heat pump win despite electricity costing about 3.3× as much as gas per unit. Divide 26.32p by a SCOP of 3.5 and you get 7.5p of heat; divide 7.97p by 0.9 boiler efficiency and you get 8.9p. The ratio used to be nearly 4×, which is why gas used to win.

For the full breakdown of install costs, read our complete guide to heat pump costs in the UK.

Why This Was the Other Way Round Until Recently

This is the bit nobody explains properly. For years a heat pump on a standard tariff cost more to run than a gas boiler, and it had almost nothing to do with the technology. It was a tax issue.

The wholesale cost of electricity and gas in the UK aren't that different. But the retail prices are. Look at what's loaded on top of the wholesale cost:

• Electricity (26.32p/kWh): Roughly 5–10% policy costs after the April 2026 changes, down from around 16% before, and no VAT at all from 1 October 2026 to 31 March 2027. Electricity still carries renewables subsidies, social tariffs and capacity market levies.
• Gas (7.97p/kWh): Roughly 5.5% policy costs (mainly the Green Gas Levy on the standing charge) plus 5% VAT, which electricity no longer pays.

Electricity still carries proportionally more policy cost than gas, which is why it remains about 3.3× more expensive per kWh even though gas is the dirty fuel. For most of the last decade that gap was wide enough to cancel out a heat pump's efficiency advantage entirely. It no longer is.

This started changing in April 2026. The Autumn 2025 Budget moved 75% of the Renewables Obligation into general taxation and scrapped the ECO levy on bills for three years, cutting around £150/year off a typical electricity bill. That's the first concrete step of the long-promised "rebalancing" from electricity to gas. Whether it becomes permanent (or whether further rebalancing happens) depends on future budgets, but the direction of travel is clear: electricity is getting cheaper relative to gas.

In the meantime, the most reliable way to sidestep the tax skew is to choose an off-peak electricity tariff (see below). That's not a workaround. It's how heat pumps are designed to be run.

Running Costs by House Type

Your actual running costs depend on your house type and how much heat it loses. Here's what the numbers look like for each common UK home at the current price cap. Note how close the SCOP 3.0 column runs to gas, and how decisively the SCOP 3.5 column beats it:

How we calculated this: Gas running cost = heat demand ÷ 0.9 (boiler efficiency) × £0.0797/kWh. Heat pump running cost = heat demand ÷ SCOP × £0.2632/kWh. Both are the Ofgem cap rates for 1 October to 31 December 2026. Figures exclude the gas standing charge (~£108/yr) and the electricity standing charge (~£200/yr), since both apply either way. Keep reading for how to drop the gas standing charge entirely.

The break-even is a SCOP of 2.97. That is the efficiency at which a heat pump costs exactly the same to run as a 90% efficient gas boiler at today's prices. MCS sets a minimum of 2.8, the Energy Saving Trust's field trial average was 2.9, and HeatPumpMonitor.org's monitored fleet averages 3.87. So a typical decent install now wins, a bad one still loses, and the number to interrogate in any quote is the predicted SCOP.

How Your SCOP Changes Everything

The single biggest variable in heat pump running costs isn't your tariff. It's your Seasonal Coefficient of Performance (SCOP), the real-world efficiency over a full year, including cold winter mornings when the pump works harder.

Official MCS product data shows heat pumps rated at SCOP 4.0–4.5 in lab conditions. In the real world, installs typically deliver:

• SCOP 2.5–3.0 (poor install): Oversized pump, high flow temperatures (55°C+), undersized radiators, system short-cycling. Running costs 20–30% higher than they should be.
• SCOP 3.0–3.5 (average install): Correct sizing, flow temps around 45–50°C, mixed radiator sizing. This is where most UK installs land.
• SCOP 3.5–4.0 (good install): Properly sized to heat loss, flow temps 35–45°C, bigger radiators in key rooms, well-insulated home.
• SCOP 4.0+ (excellent install): Underfloor heating, very well-insulated home (typically new build or deep retrofit), low flow temps year-round.

The difference between SCOP 3.0 and SCOP 4.0 is about £200–£350/year for an average home at standard tariff. Over 20 years, that's £4,000–£7,000. This is why choosing an installer matters so much more than choosing a heat pump brand. The MCS installer should do a room-by-room heat loss calculation and size the pump and radiators to give you low flow temperatures. That's the whole ballgame.

For what to look for in quotes, see our best heat pumps UK guide.

The Tariff Trick Most People Miss

Here's what flips the entire heat pump vs boiler equation: off-peak electricity tariffs.

Tariffs like Octopus Cosy, Octopus Go and Economy 7 offer off-peak electricity well below the 26.32p standard cap rate during set windows. Cosy Octopus runs three cheap windows a day (04:00–07:00, 13:00–16:00 and 22:00–00:00) priced 51% below its day rate, with a 16:00–19:00 peak 50% above it. Heat pumps are tailor-made for this because you can "batch heat" your home and hot water cylinder during cheap-rate hours, then coast through the expensive windows on the thermal mass of the building.

Let's redo the maths for an average UK home (12,000 kWh heat demand, SCOP 3.5) at different electricity rates:

On a heat pump tariff, the saving is around £380 a year rather than the £160 you get on the standard cap. Over a 20 year life that is roughly £7,600 against £3,200, before you account for gas prices rising faster than electricity, which is exactly what happened at this cap.

If you're getting a heat pump, sorting your electricity tariff on day one is non-negotiable. It's free to switch, takes 10 minutes, and completely changes the economics. Try the calculator above to see the difference for your situation.

The Gas Standing Charge Trick (£108/yr Extra Saving)

Almost every heat pump cost comparison online misses this one: if you install a heat pump and get rid of your gas hob/cooker at the same time, you can disconnect your gas supply entirely and save the gas standing charge.

Under the current Ofgem cap the gas standing charge is 29.68p per day, or £108/year. That's money you pay for the privilege of being connected to the gas grid, regardless of how much gas you actually use. If you only had a gas hob (no heating, no hot water), you'd probably still pay £150–£180/year total once you include minimum usage. All of that for a cooker you could replace with an induction hob for £200.

Switch to an induction hob (which is faster and more controllable than gas anyway) and ring your gas supplier to cap the supply. You'll save £108/year for as long as you stay off gas, and it narrows the heat-pump-vs-boiler gap by roughly that amount on a standard tariff, or makes the saving bigger on off-peak.

Heat Pump + Solar Panels: The Best Combo

If you're already thinking about a heat pump, the single best pairing is solar panels with a battery. Here's why:

• Winter solar is not zero. A 4kW array in the UK still generates roughly 15–20% of annual output in November–February, when your heat pump is working hardest. Every kWh you self-consume is worth 26.32p at the standard cap rate, or around 20p if you are on a heat pump tariff, because it is import you avoid paying for.
• Summer generation covers hot water for free. Your heat pump still runs in summer just for the hot water cylinder. Divert surplus solar to it and your hot water is free from roughly April to September.
• Battery shifts cheap electricity to expensive windows. With a battery on Octopus Flux or Intelligent Octopus Go, you can charge overnight at 8p/kWh and discharge during the peak. This is effectively a sub-10p tariff for your heat pump year-round.
• BUS + solar VAT both 0%. Solar panels have 0% VAT until March 2027 (same as heat pumps), so installing both at once is cheaper than doing them separately.

A typical combined install (4kW solar, 5kWh battery, 8kW heat pump) comes out at £14,000–£18,000 after grants/VAT and shrinks annual energy bills to £400–£600 for most homes. Compare that to £1,300–£1,800 for a gas-boilered, no-solar home at current caps. See our solar + heat pump combo guide for the full breakdown.

Hidden Costs Nobody Talks About

The heat pump price tag isn't the whole story. Here are the extras that catch people out:

• Radiator upgrades (£1,000–£3,000): Heat pumps run at lower flow temperatures than gas boilers (35–45°C vs 60–75°C). If your radiators are undersized (common in older homes), you'll need bigger ones in some rooms. Not every room. A good installer does a room-by-room heat loss calc and only upgrades the ones that need it.
• Electrical supply upgrade (£300–£800): Some older homes need their consumer unit upgraded to handle the heat pump's draw. Your installer should check this during the survey.
• Hot water cylinder (£500–£1,500): If you've got a combi boiler, you don't have a cylinder. You'll need one, typically 180–250 litres. If you've already got a cylinder, you might need a bigger one.
• Planning permission (£0–£300): Most heat pumps fall under permitted development, so no planning needed. But conservation areas and listed buildings need an application.
• Insulation improvements (£500–£5,000+): Not strictly a heat pump cost, but you'll get much better SCOP if you insulate first. Cavity wall and loft top-ups should come before the install.

Total realistic cost for a well-insulated home: £10,000–£15,000 before grant, £2,500–£7,500 after. A poorly insulated Victorian terrace needing radiators, cylinder and insulation could run to £18,000–£22,000 before the grant.

When a Heat Pump Genuinely Saves Money

Based on the numbers above, a heat pump saves you money when most of these apply:

• You qualify for the £7,500 BUS grant (England/Wales, own the property, replacing fossil-fuel heating; no EPC needed since 28 April 2026)
• You're willing to switch to an off-peak tariff (Octopus Cosy, Go, or similar)
• Your home is reasonably insulated (EPC C or D with top-ups), not a draughty Victorian end-terrace
• You'll use an MCS-certified installer who designs for low flow temps (not a cowboy who drops in a pump and cranks it to 55°C)
• You plan to stay in the home 8+ years to amortise the upfront cost
• You can ditch the gas supply entirely (induction hob instead of gas)
• Ideally: you have or plan to install solar panels + battery

If 5+ of these apply, a heat pump will almost certainly save you money across its 20 to 25 year life. If only 1–2 apply (e.g. old uninsulated house, standard tariff, keeping gas cooker), you're better off with a new condensing gas boiler and waiting for policy rebalancing.

When to Switch

Here's a simple decision framework based on your boiler age:

• Boiler over 12 years old? Switch now. It's going to fail soon anyway, and the £7,500 grant is still active. Emergency boiler replacement costs more and leaves no time to plan.
• Boiler under 5 years old? Wait, unless it fails or you're about to get solar panels. A modern condensing boiler has 8–10 good years left.
• Boiler 5–12 years old? Grey zone. Use the calculator above with your numbers. If the grant covers most of the difference and you're staying 10+ years, do it now.
• Getting solar panels? Switch both at once. Shared scaffolding, shared electrics, and the combined system economics are far better than doing them separately.
• Planning a renovation? Perfect time. Underfloor heating, insulation and heat pump all go in together with the floors up.

What About the Gas Boiler Ban? (2026 Update)

Worth clearing this up because news headlines have moved a lot in the last year:

• New-build homes: Under the Future Homes Standard, gas boilers will be banned in new English homes from 24 March 2027. Scotland has already banned them in new builds since April 2024 under the New Build Heat Standard. New builds will use heat pumps, heat networks or direct electric.
• Existing homes: The original target of banning new gas boiler installs by 2035 has been scrapped. Under the current Warm Homes Plan, the government has switched to a "carrot not stick" approach, targeting 80% fewer gas boiler installs by 2035 through grants and incentives, rather than a hard ban.

In other words: nobody is going to rip out your working boiler, and you'll still be able to buy a new gas boiler for the foreseeable future. What is almost certain is that the grants and VAT treatment will continue to tilt the economics toward heat pumps, and at some point policy-cost rebalancing will make heat pumps genuinely cheaper to run on a standard tariff.

The practical upshot: there's no panic. But there's also no reason to wait if your boiler is already end-of-life and you qualify for the grant.

Grants and Funding

The Boiler Upgrade Scheme (BUS) is the big one: £7,500 off an air source or ground source heat pump in England and Wales. The budget was increased to £295m for 2025/26 and the scheme has been extended to 2030. It's paid directly to your installer, so you never see the full price.

Key changes from 28 April 2026:

• Air-to-air heat pumps are now eligible for a £2,500 BUS grant in domestic properties (previously excluded).
• Upfront discount required: Installers must show the grant as a discount on your quote and invoice. No more "we'll claim the grant and pocket some of it".
• EPC requirement removed entirely: you no longer need an Energy Performance Certificate to apply at all.

To qualify, you need: an MCS-certified installer, an existing fossil-fuel heating system, and to own the property. You do not need an EPC, and you do not need to clear outstanding insulation recommendations. Your installer should apply before the work starts, and Ofgem will still accept an application for a heat pump commissioned within the previous 120 days.

Plus: 0% VAT on heat pumps until March 2027. This saves another £500–£1,000 on a typical install, on top of the grant.

Other funding routes:

• Home Energy Scotland: Interest-free loans up to £7,500, plus cashback grants for eligible households.
• Nest Wales: Free heat pump installations for eligible households on means-tested benefits.
• ECO4: fully funded installations if you're on certain benefits or have a low EPC rating.

Check what you're eligible for with our grant eligibility checker. For full BUS details, read our Boiler Upgrade Scheme guide. For model picks, see our best heat pumps UK guide.

Heat Pump vs Boiler FAQs

Is a heat pump really cheaper to run than a gas boiler?

At the current price cap, yes, provided the install is decent. This flipped in October 2026, when gas rose 8.7% and electricity rose 0.8%. A heat pump at SCOP 3.5 delivers heat at 7.5p/kWh against 8.9p from a 90% efficient gas boiler, saving roughly £160 a year on a typical 12,000 kWh home. The break-even is a SCOP of about 3.0, so a poorly commissioned pump running at 2.5 still costs more than gas. On a heat pump tariff the saving rises to around £380. Install quality and tariff are the two variables that decide the answer.

Why is electricity still more expensive than gas?

It's policy, not technology. Electricity carries renewables subsidies, social schemes and capacity market levies that gas largely does not, which is why a unit of electricity costs about 3.3× a unit of gas. Rebalancing has started: the Autumn 2025 Budget moved 75% of the Renewables Obligation into general taxation, and VAT came off domestic electricity entirely from 1 October 2026 to 31 March 2027. That is why the running-cost comparison has flipped in favour of heat pumps. What happens after March 2027 has not been announced.

Do I need to replace my radiators for a heat pump?

Usually 2–5 of them, not all. Heat pumps run at lower flow temperatures than boilers, so radiators need more surface area to output the same heat. A good installer does a room-by-room heat loss calculation and only upsizes the ones that fall short. Budget £1,000–£3,000 for rad upgrades.

How long does a heat pump last?

20–25 years for the outdoor unit, often longer for the hydraulics inside. That's roughly double the life of a gas boiler (12–15 years). Over 25 years you'd typically buy 2 boilers vs 1 heat pump.

What happens if I have solar panels?

The economics get much better. A heat pump uses 3,000–5,000 kWh/yr of electricity; a 4kW solar array generates ~3,500 kWh/yr. You'll self-consume 30–50% of your generation running the heat pump and hot water, cutting another £200–£400 off annual running costs. See our solar + heat pump guide.

Can I keep my combi boiler if I get a heat pump?

No, a heat pump replaces your boiler. But if you've got a combi, you'll need to add a hot water cylinder (£500–£1,500). Your MCS installer will spec this.

Is the £7,500 BUS grant still available?

Yes. Budget was increased for 2025/26 and the scheme has been extended to 2030. From 28 April 2026, air-to-air heat pumps also qualify for £2,500.

Will my gas boiler be banned?

Not in existing homes. The 2035 ban was scrapped under the current Warm Homes Plan in favour of an 80%-reduction target through grants/incentives. New builds in England go gas-free from 24 March 2027, and Scotland has been gas-free since April 2024.

What SCOP should I look for?

Aim for 3.5 or higher for a good real-world install. Ask the installer what flow temperature they're designing for. You want 45°C or below, ideally 35–40°C with larger radiators or underfloor heating. Anything above 50°C means a worse SCOP and higher bills.

Are ground source heat pumps worth it?

Only if you have space for ground loops (large garden or horizontal trenches) or the budget for boreholes. They deliver SCOPs of 4.0+ but cost £25,000–£45,000 installed, and the £7,500 grant doesn't close the gap for most homes. For most UK houses, an air source heat pump is the right answer.