How much does a heat pump cost to run?
Heat pumps are the most carbon friendly solution out there when it comes to home heating - but how do running costs compare? For an average UK home, a heat pump should cost around the same as a gas boiler to run, but you could unlock deeper savings by choosing a smart, green heat pump tariff.
How much does the average heat pump cost to run?
Heat pump costs have tumbled over the last few years and will almost certainly continue to drop. Right now, it costs around £50 more a year to ditch dirty gas heating based on the October price cap prices but that's not the end of the story...
| Annual heat demand | Efficiency | Annual energy use | Avg energy price | Annual bill | |
|---|---|---|---|---|---|
| Gas boiler | 9,653 kWh | 82.5% | 11,700 kWh | 7p/kWh | £820 |
| Heat pump | 9,653 kWh | 300% | 3,218 kWh | 27p/kWh | £870 | Total savings: | -£50 |
Extra heat pump savings:
Based on our data, if you choose to pair your heat pump with our specially-designed smart tariff Cosy Octopus instead of a standard variable tariff, you can save £85 a year on your heat pump run cost.
What's more, if you use your heat pump to help rid your home of gas once and for all, you'll no longer have to pay gas standing charge, which would save an additional £110 a year.
What have our Cosy customers been getting up to?
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.
We crunched the data from 400 customers who have been on our Cosy Octopus tariff for more than 6 months and saw that they have saved £188 over 6 months on average!
Most customers saved between £70 and £250, 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
Frequently Asked Questions
How we calculated the average gas heating cost
Ofgem estimates that a typical household gas consumption is 12,000kWh a year. Gas used for cooking makes up around 2.5% of the total (300kWh), so that leaves 11,700kWh a year as the typical quantity of gas used for heating and hot water in your home.
From October 2023, the average price cap for gas is £0.07 per kWh, so the annual cost of gas consumption is 11,700 x £0.07 = £820. Sourced here.
How we calculated the average heat demand
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 consumption is 11,700kWh (see FAQ above) but as only 82.5% of that is being turned into heat, we calculate actual heat demand at 11,700 x 0.825 = 9,653kWh.
How we calculated the heat pump heating cost
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 9,635kWh, the amount of electricity required will be 9,635 ÷ 3 = 3,218kWh.
From July 2023, the price cap for electricity is £0.27 per kWh, so the annual cost of electricity for heating and hot water is 3,218 x £0.27 = £870
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 average Cosy Octopus saving
The figure is calculated based on a Cosy customer shifting 50% of their heat pump consumption, into the three hour double dip super cheap periods. The initial results from our first 400 customers suggest they are shifting even more than this. This saving is compared to the cost of a flat rate Flexible Octopus tariff.
Heat pump myth busting
Published on 30th September 2023 by:
Hey I'm Constantine, welcome to Octopus Energy!
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