How much does a heat pump cost to run?

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Heat pumps are the most carbon friendly solution out there when it comes to home heating - but how do running costs compare? For the average UK home, it should cost a similar amount to run a heat pump compared to a gas boiler, but you could unlock savings by choosing a smart, green heat pump tariff like Cosy Octopus.

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How much does the average heat pump cost to run?

Heating costs with a heat pump can vary from home to home depending on a variety of factors, from how insulated the property is, to which tariff you're on, and how you use your heating.

For an average 2-3 bed home, if you prefer to join the standard Flexible Octopus tariff a heat pump can cost around £50 more a year than gas on average.

Whereas if you're on our Cosy Octopus smart tariff you can save around £126 a year compared to gas.

Check out the cost comparison below for these two scenarios (based on the Ofgem average for a medium sized UK home and January 2024 price cap):

Annual heat demand (heating and hot water) Efficiency Annual energy use Avg energy price Gas standing charge Total annual heating cost Annual saving vs gas
Gas boiler - Flexible tariff 9,250 kWh 83% 11,213 kWh 7.42p/kWh 29.6 p/day £940 N/A
Heat pump - Flexible tariff 9,250 kWh 300% 3,083 kWh 28.62p/kWh 29.6 p/day £991 -£51
Heat pump - Cosy tariff 9,250 kWh 300% 3,083 kWh 22.90p/kWh 29.6 p/day £814 £126

Get Cosy, make savings

Cosy Octopus works by allowing you to make the most of the cheap, green ‘Cosy’ periods. This might mean pre-heating your hot water or your home a little earlier than usual, and then once the daily peak in energy demand has passed, turning your green-heating back on to remain as cosy as ever.

All you'll need to do is set a schedule and you'll be good to go. Here are our top tips for how to run your heat pump to maximise savings, including some example schedules.

What have our Cosy customers been getting up to?

We crunched the data from all our customers who have been on our Cosy Octopus tariff for a full 12 months and found that, on average, they saved 20% on their electricity bills compared to our standard Flexible Octopus tariff.

Most customers saved between 7% and 27% with those who had other green tech, like a battery, making the greatest savings.

Cosy profile

This graph shows the average daily consumption profile for the two weeks before and after they switched to Cosy Octopus

When you apply these savings to a medium sized UK home that's a £126 a year saving compared to a gas boiler.

How can I save even more with a heat pump?

What's more, if you use your heat pump to help rid your home of gas once and for all (something we can arrange for free), you'll no longer have to pay gas standing charge, which would save an additional £108 a year

If you have a heat pump, or you're planning to have one installed, switching to Cosy is easy. Just follow the guidance on this page.

Alternatively if you have other low carbon tech devices at home, like an EV or solar panels, a different smart tariff could make your energy cheaper. Check out this quiz to find the right tariff for you.

Frequently Asked Questions

How we calculated the annual gas heating cost (Flexible tariff)

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Ofgem estimates that a typical household gas consumption is 11,500kWh a year. Gas used for cooking makes up around 2.5% of the total (288kWh), so that leaves 11,213kWh a year as the typical quantity of gas used for heating and hot water in your home.

From January 2024, the average price cap for gas is 7.42 pence per kWh, so the annual cost of gas consumption is 11,213 x £0.0742 = £832.

As the property is supplied with gas, you also need to pay a standing charge of 29.6 pence per day or £108 per year. When you add this to the gas consumption cost, it comes to £940 - the total annual heating cost.

How we calculated the annual heat demand

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To calculate the cost of running a heat pump, you need to work out your household heat demand using your current annual gas consumption and boiler efficiency.

Potential heating and hot water costs using a gas boiler

A new A-rated gas boiler must be a minimum of 92% efficient; however, studies have shown that the actual in-use performance is generally lower. Older boilers are also less efficient

The UK government energy department (DESNZ) did a live study and found the average gas boiler to be around 82.5% efficient, so that's what we've used

Current gas heating consumption is 11,213kWh (see FAQ above) but as only 82.5% of that is being turned into heat, we calculate actual heat demand at 11,213 x 0.825 = 9,250kWh.

How we calculated the heat pump annual heating cost (Flexible tariff)

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Following on from the above, a typical air source heat pump should generate three or more units of heat for each unit of electricity it uses.

The UK government energy department (DESNZ) did a live study and found that the average heat pump to be around 300% efficient, so that's what we've used

To deliver the heat demand of 9,250kWh, the amount of electricity required will be 9,250 ÷ 3 = 3,083kWh.

From January 2024, the price cap for electricity is 28.62 pence per kWh, so the annual cost of electricity for heating and hot water is 3,083 x £0.2862 = £882


If your property is still supplied with gas, you also need to pay a standing charge of 29.6 pence per day or £108 per year. When you add this to the gas consumption cost, it comes to £991 - the total annual heating cost.

We've assumed that all households already pay the standing charge for electricity, so there's no need to add this.

How we calculated the heat pump annual heating cost (Cosy Octopus tariff)

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We've used the same heat pump efficiency and consumption as the Flexible tariff calculation. However we've reduced the average energy price by 20% based on our initial Cosy findings.

So the annual cost of electricity for heating and hot water is 3,083 x £0.229 = £706.

If your property is still supplied with gas, you also need to pay a standing charge of 29.6 pence per day or £108 per year. When you add this to the gas consumption cost, it comes to £814 - the total annual heating cost.

We've assumed that all households already pay the standing charge for electricity, so there's no need to add this.

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Published on 30th September 2023 by:

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Aimee Clark

Green heating expert

Hey I'm Constantine, welcome to Octopus Energy!

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