How much can you save with a heat pump?
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 if you chose a smart, green heat pump tariff like Cosy Octopus you could save hundreds of pounds.
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 £60 more a year than gas on average.
Whereas if you're on our Cosy Octopus smart tariff you can save around £264 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 October 2024 price cap):
| Annual heat demand (heating & hot water) | Heating Efficiency | Annual Heating Energy Usage | Annual General Elec Usage | Gas price (p/kWh) | Elec price (p/kWh) | Gas standing charge (p/KWh) | Elec Standing charges (p/kWh) | Total Annual Energy Bill | Total Annual Bill Savings | Gas boiler: Flexible Octopus | 10,207kWh | 85% | 11,966 kWh | 2,700 kWh | 6.24 | - | 31.66 | - | £1,766 | - | Heat pump: Flexible Octopus | 10,207 kWh | 310% | 3,293 kWh | 2,700 kWh | - | 24.50 | - | 60.99 | £1,826 | -£60 | Heat pump: Cosy Octopus | 10,207 kWh | 310% | 3,293 kWh | 2,700 kWh | - | 19.21 | - | 58.93 | £1,502 | £264 |
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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 £115 a year.
If the environmental levies were removed from electricity (something the government is considering and we’re lobbying hard for) the average heat pump user would save an extra £199 compared to gas boilers.
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.
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 around a £264 a year saving compared to a gas boiler.
How to join Cosy Octopus
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.
Assumptions explained
How we calculated the total energy bill for gas boilers on a Flexible tariff
First we need to calculate the heat demand for hot water and heating.
Based on the average gas consumption observed of Octopus customers, this worked out to be 12,273kWh.
Gas used for cooking makes up around 2.5% of this, or 307kWh. This means 11,966kWh is needed for heating and hot water, or your heat demand.
A live study by the UK government energy department (DESNZ) found the average gas boiler to be around 85.3% efficient.
This means, of the 11,966kWh of heat demand, only 85.3% is converted into heat.
This works out to be 10,207kWh (11,966kWh x 0.853).
From July 2024, the average unit rate price cap for gas is 5.48p/kWh.
A standing charge also applies for a gas supply. From July 2024, this will be an average of 31.41 pence per day, or £115 per year, for those on a flexible / variable tariff.
The annual average electricity usage of a medium UK home is 2,700kWh.
For a flexible tariff, the average unit rate price cap from July 2024 for electricity is 22.36 pence per kWh.
A standing charge also applies for an electricity supply. From April 2024, this will be an average of 60.12 pence per day, or £219 per year, for those on a flexible / variable tariff.
Using this information, we can calculate the total energy bill cost with a gas boiler:
(11,966kWh x £0.0548) + (307kWh x £0.0548) + (£0.3141 x 365) + (2,700kWh x £0.2236) + (£0.6012 x 365) = £1610
How we calculated the total energy bill for heat pumps on a Flexible tariff
Assumptions for figures below are explained in FAQ above:
- Average gas usage observed - 12,273kWh
- Gas used for cooking - 307kWh
- Gas used for heating and hot water - 11,966kWh
For heat pump efficiency, we have used a figure of 310%, this is the real world efficiency we observed from a fleet of our heat pumps.
The heat demand for a gas boiler was previously calculated to be 10,207kWh.
A heat pump that is 310% more efficient would require only 3,293kWh to deliver the same heat demand (10,207kWh / 310%).
If you keep your gas supply as well, a gas standing charge applies. From July 2024, this will be an average of 31.41 pence per day or £115 per year.
The annual average electricity usage (not for heating & hot water) of a medium UK home is 2,700kWh.
This means, with a heat pump, your annual electricity consumption for heating, hot water and general electricity usage is 5,993kWh.
For a flexible tariff, the average price cap from July 2024 for electricity is 22.36 pence per kWh.
A standing charge also applies for properties with an electricity supply. From July 2024, this will be an average of 60.12 pence per day, or £219 per year for those on a flexible tariff.
The heat demand for cooking remains the same at 307kWh.
Using this information, we can calculate the total energy bill cost for a heat pump on a flexible tariff:
(3,293kWh x £0.2236) + (307kWh x £0.0548) + (£0.3141 x 365) + (2,700kWh x £0.2236) + (£0.6012 x 365) = £1,691
How we calculated the total energy bill for heat pumps on our Cosy Octopus tariff
Assumptions for figures below are explained in FAQ above:
- Average observed gas usage - 12,273kWh
- Heat pump efficiency vs gas boiler - 310%
- Boiler heat demand - 10,207kWh
- Cooking gas usage - 307kWh (2.5%)
- Gas unit rate - 5.48 pence per kWh
- Gas standing charge - 31.41 pence per kWh
- Heat demand with a heat pump - 3,293kWh
- Annual general electricity usage for a medium property - 2,700kWh
- Total annual electricity usage for a property with a heat pump - 5,993kWh
Based on our expectations of customer consumption patterns on the Cosy Octopus tariff, with the introduction of a third dip rate, we calculated the weighted average Cosy Octopus rate to be 17.477p/kWh.
From July 2024, the average standing charge for the Cosy Octopus tariff will be 58.03 pence per kWh.
Assuming gas is kept at the property, your total energy bill with a heat pump on the Cosy Octopus tariff works out to be:
(3,293kWh x £0.17477) + (307kWh x £0.0548) + (£0.3141 x 365) + (£0.5803 x 365) + (2,700kWh x £0.17477) = £1,391
How we calculated the environmental levies saving
The environmental levies considered are:
RO - Renewable Obligation Certificates
CfD - Contracts for Difference
FiT - Feed in Tariff
ECO - ECO Scheme
Together, these levies make up 6.06 pence (25%) of your electricity unit rate, which is already included in the total bill and savings figures above.
Electricity Levy Cost with Gas Boiler
If you have a gas boiler in your property, following our previous assumptions, your annual electricity usage is 2,700kWh.
Therefore cost of levies works out to be:
2,700kWh x £0.0606 = £164
Electricity Levy Cost with a Heat Pump
If you have a heat pump in your property, following our previous assumptions and calculations, your total annual electricity usage is 5,993Wh.
Therefore cost of levies works out to be:
5,993kWh x £0.0606 = £363
Net Levy Savings with a Heat Pump
The net difference between the two calculations above work out to be:
£363 - £164 = £199
If these levies were to be removed, something the government is considering, by having a heat pump in your property, you would save £199 more than you would with a gas boiler.
Heat pump myth busting
Published on 24th October 2024 by:
Hey I'm Constantine, welcome to Octopus Energy!
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