Heat pumps explained: costs, benefits and how they work
Your neighbour’s got one. Your brother-in-law's getting one. So what is a “heat pump” and how could it benefit you? If you’re new to the world of smarter, greener home heating – this guide is here to help.
Up to 4x more efficient than a standard gas boiler
What is a heat pump?
Heat pumps are a cost-effective, eco-friendly way to heat your home using electricity instead of a gas (bye-bye old boiler). Without going into loads of detail: heat pumps take heat from the outside and move it inside to warm your pipes.
They work a bit like an air conditioner in reverse – keeping your home warm instead of cool – and they’re super efficient. While boilers give you quick bursts of high heat, heat pumps provide a steady flow of warmth to keep your home toasty all year round. That's why they’re popular in countries with cooler climates like Norway and Sweden.
Want to know more? Watch the video below.
How could a heat pump benefit you?
- They're efficient. Heat pumps use up to 4x less energy than even the most efficient boilers to generate the same kind of heat.
- They cut carbon. Switching to a heat pump could reduce your carbon footprint by around 80%. Plus, they run on electricity, which is renewable with Octopus Energy.
- They provide steady heat. Heat pumps are designed to provide a steady flow of warmth to keep your home toasty all day – so you're never left feeling the chill.
- They’re cheap to run. On our Cosy Octopus tariff, customers can save up £369 a year compared to gas, with a standard low-temperature installation.
- They last longer. The average lifespan of a heat pump is 20 years which is 5 years longer than a gas boiler. So you won’t have to worry about replacing it anytime soon.
- They can boost the value of your home. Investing in a combination of green tech could increase the value of your home by up to 3%.
How much do heat pumps cost?
Thanks to some savvy government grants and cashback incentives from banks and mortgage lenders, the upfront costs of getting a heat pump are less than you’d think.
The UK government's heat pump grant scheme puts £7500 towards the cost of replacing a gas boiler with a heat pump, and many of the biggest banks and mortgage lenders are offering up to £2000 cashback to eligible customers.
Our typical heat pumps price is £4,460 and if you’re eligible for cashback from your bank or mortgage lender, the cost of your install could be even less.
What heat pumps do Octopus install?
It's no surprise we're big fans of heat pumps. So much so that we decided to build our own: The Cosy.
Cosy is a true powerhouse in the heat pump world. It’s efficient, quiet and comes with four Cosy Pods to monitor the temperature and humidity of your home. Plus, it works seamlessly with the Octopus app for straightforward, no-fuss heating.
Cosy is the main heat pump we install and always our first choice for customers. If you’re not eligible for a Cosy following your free survey, we’ll offer you a Daikin heat pump instead – which, like Cosy, is one of the best on the market.
Why install your heat pump with Octopus?
So, you’ve decided to get a heat pump, excellent choice! Here’s what makes us a smart pick:
We’re a one-stop-shop for heat pumps, so there’s no need to look elsewhere or co-ordinate with third party contractors. We carry out a thorough in-home survey, design and build your heat pump so it meets the needs of your home, upgrade your radiators and pipe work if we need to, and provide all the aftercare too.
Keep your home warm for less with Cosy Octopus – our tariff designed especially for heat pumps – with three dips of cheap, green energy every day. Plus, if new features come out for your Cosy heat pump, you’ll get them automatically. Remote monitoring lets us update your Cosy’s software and see how it’s performing from afar.
All our Cosy heat pumps comes with an 8 year warranty for ultimate peace of mind – longer than the average 5-year warranty offered by most installers. And you’ll benefit from our award-winning customer service too. We’ve been the Which? recommended energy supplier for 8 years running with over 500k 5-star Trustpilot reviews.
Customers review their Cosy
Switching to a heat pump is a big decision – but as these customers will tell you, it pays off in the long run. Hear directly from people like you who took the plunge and are now enjoying the benefits of cleaner, greener home heating.
Get a heat pump with Octopus
Ready to be the envy of the whole street? Head to our order page and pop in your postcode for a quick, free heat pump quote.
Our claims explained
Efficiency / A heat pump is up to 4x more efficient than a gas boiler:
Heat pumps can deliver several units of heat for each unit of electricity. For every 1 kWh of electricity you put in, you could get an average of 3.3kWh heat out, which is an efficiency of 330%! This is because heat pumps don't create heat, but move existing heat from nature into your home (like an air conditioner or refrigerator, but in reverse). Alternatively, when you burn stuff to generate heat (like gas, oil, or wood), you are instead creating heat by converting matter to energy - so you can never get more than one unit of heat for each unit of energy you burn. Gas boilers in UK homes are only around 85% efficient, so for every 1 kWh of gas you put in, you get around 0.85kWh of heat out, which is nearly 4x less efficient than a heat pump (3.3/0.85 = 3.9).
Alternatively, when you burn stuff to generate heat (like gas, oil, or wood), you are instead creating heat by converting matter to energy - so you can never get more than one unit of heat for each unit of energy you burn. Gas boilers in UK homes are only around 85.3% efficient, so for every 1 kWh of gas you put in, you get around 0.853kWh of heat out, which is nearly 4x less efficient than a heat pump (3.1/0.853 = 3.6).
These are typical install efficiencies for gas boilers and low temperature heat pumps installed in real homes (like Cosy Eco). See our heat pump saving blog for the full set of calculations and assumptions.
Cut carbon emissions by around 80% with a heat pump:
This is the typical reduction in heating carbon emissions using an electric powered heat pump compared to a gas boiler, based on the following calculation:
Gas CO2 = (A*D) = 2.42 tonnes per year
Electricity CO2 = (A/B*C*E) = 0.40 tonnes per year
Carbon saving = 2.01 tonnes or 83%
Where A - E are:
A - 11,500 Ofgem medium gas usage
B - 330% typical seasonal coefficient of performance from a fleet of Octopus low temperature heat pumps
C - 85% typical gas boiler efficiency from a BEIS study
D - Gas fuel emissions of 210 gCO2/kWh (SAP 10.2)
E - Electricity fuel emissions of 136 gCO2/kWh (SAP 10.2)
These are typical install efficiencies for gas boilers and low temperature heat pumps installed in real homes (like Cosy Eco). See our heat pump savings blog for the full set of calculations and assumptions.
Heat pumps give reliable, consistent heating and hot water
The heat pump user survey report by Nesta from May 2023 summarises that “users are highly satisfied with their heat pumps”. It states “People living in England, Scotland and Wales who own their home and use a heat pump to heat it are satisfied that heat pumps are safe, reliable, quiet heat sources that are effective for space heating and producing hot water”. Find the full report here.
Save around £370 a year with a heat pump
We expect a medium use home to save around £369 a year, running a Cosy Eco heat pump on our Cosy Octopus smart tariff with no gas supply, compared to a gas boiler on a Standard tariff. See the our heat pump savings blog for full details and calculations.
Heat pumps vs gas boilers
Lifespan: the expected lifespan of a gas boiler is 10-15 years. A heat pump lifetime is typically 20 years based on a UK government study. Various research from brands such as Carrier and Daikin have also found that a heat pump lifespan is typically between 15 to 20 years.
Heating costs: Based on a low temperature air source heat pump (Cosy Eco). Check out our blog on heat pump running costs for a full breakdown of our running cost calculations.
Efficiency & emissions: See above
A heat pump can add thousands to your property value
Analysis by the Department of Land Economy at the University of Cambridge suggests a 16% value uplift for new-build homes with enough solar and battery storage to eliminate energy bills. A further study of over five million existing properties indicates a 2-3% value increase for existing homes with solar panels or heat pumps (versus like-for-like gas-heated homes). According to the Sustainable Markets Initiative: Cleantech Homes report, 2024.
As of April 2025, the average house price in the UK is £265,497 according to Land Registry. Therefore, a 2-3% value increase for an average house priced at £265,497 would be between £5,310 and £7,965.
Get up to £2,000 cashback
Cashback from participating banks only and subject to bank eligibility — check at octo.ps/cashback. Cashback provided by your bank, not Octopus Energy.
Our typical heat pump price is £4,460
This is the median post-survey price from all of our heat pump quotes, between the 1st March and the 1st June 2025.
Published on 11th September 2025 by:
Hey I'm Constantine, welcome to Octopus Energy!
×Close window