Heat pump cost in 2026: the sums have quietly moved
If you last worked out your heat pump cost a couple of winters ago, it’s worth doing the sums again. Electricity and gas prices have shifted enough since then that the old “heat pumps cost a fortune to run” line doesn’t hold up the way it used to.
Under the Ofgem price cap that runs from 1 October to 31 December 2026, a typical household pays around 26.32p per kWh for electricity and about 7.97p per kWh for gas, checked September 2026. Electricity is also VAT free until the end of March 2027, while gas still carries the usual 5% VAT.
That combination narrows the gap between running a heat pump and running a gas boiler more than most people realise. It doesn’t wipe it out for everyone, and it isn’t a promise you’ll save money, but it’s a genuinely different starting point than the received wisdom most of us are still repeating.
Is a heat pump still more expensive to run than gas?
Not automatically, no, and that’s the bit the old advice misses. It used to be simple: electricity cost roughly four to five times as much as gas per unit, so unless your heat pump was working very efficiently, gas usually won on price.
Under the October 2026 cap, electricity costs around 3.3 times as much as gas per unit rather than four or five times. Because a heat pump can turn one unit of electricity into two, three or more units of heat, that narrower gap is enough to put a well-running heat pump roughly level with, or a little cheaper than, a gas boiler.
The best real-world UK evidence comes from the Electrification of Heat demonstration project, run by Energy Systems Catapult, which monitored 742 heat pump installations across a wide spread of housing types. It found air source heat pumps averaging around 293% efficiency in real homes, a seasonal performance factor of roughly 2.9.
Two things are worth knowing about that number. It is an in-situ seasonal performance factor (SPF), measured in real houses, not the SCOP figure quoted on a product’s datasheet, and the project specifically flagged a gap between the two. And performance varied widely between homes: the same research found only 8% of air source installations hitting an SPF of 3.5 or above. That spread is exactly why one household’s heat pump cost can look completely different from a neighbour’s.
Working out your own heat pump cost
You don’t need an engineering degree to get a rough figure. Divide your electricity unit rate by your heat pump’s real-world efficiency, then compare that to your gas rate divided by your boiler’s efficiency, which is usually assumed to be around 85%.
The table below sets out the maths using the current Ofgem price cap figures, checked September 2026, so you can see roughly where you’d land depending on how well your heat pump actually performs.
| System | Unit rate | Efficiency | Estimated cost per kWh of heat |
|---|---|---|---|
| Gas boiler | ~7.97p/kWh (5% VAT) | ~85% | ~9.4p |
| Heat pump, EoH trial average | ~26.32p/kWh (VAT free) | SPF ~2.9 | ~9.1p |
| Heat pump, strong performer | ~26.32p/kWh (VAT free) | SPF ~3.5 | ~7.5p |
| Heat pump, poorly set up | ~26.32p/kWh (VAT free) | SPF ~2.2 | ~12.0p |
Key takeaways
- Your heat pump cost depends far more on your home’s insulation and how the system was set up than on the technology itself.
- The October 2026 price cap, with VAT off electricity and gas rates rising, has narrowed the gap with gas noticeably.
- Real UK monitoring of 742 installations put the average air source heat pump at roughly 290% efficiency, with wide variation between homes.
- A poorly installed heat pump can still end up pricier than gas, so a proper handover and settings check matter.
- Whichever system heats your home, the tariff you’re on changes the answer, so it’s worth checking that too.
Does my home’s insulation change my heat pump cost?
Yes, more than almost anything else. A heat pump run at a lower flow temperature in a well-insulated home does far less work for the same warmth, which is what pushes its efficiency towards the top of the range rather than the bottom.
Draughty walls, thin loft insulation or radiators sized for a gas boiler’s higher flow temperatures all drag efficiency down, and with it, your heat pump cost. If you’re weighing up a heat pump, a basic insulation check before installation is one of the cheapest ways to protect your running costs later.
There’s also a government grant that covers part of the upfront cost of installing a heat pump in England and Wales, which changes the payback calculation even if the running cost sums come out roughly level with gas.
What to check before you switch, whichever system you have
Your heat pump cost, or your gas boiler cost for that matter, is shaped just as much by which tariff you’re on as by the appliance itself. That bit tends to get skipped in the running cost debate.
Some suppliers offer tariffs aimed specifically at heat pump owners, with cheaper off-peak electricity rates that can shift the sums further in your favour. Staying on a supplier’s default rate because switching felt like hassle a few winters back costs real money, whatever’s heating your home.
It’s worth comparing tariffs at least once a year, and definitely whenever the price cap changes, so you’re working from the actual numbers rather than an old assumption.
Frequently asked questions about heat pump cost
- What’s a realistic heat pump cost for a typical UK home?
- It varies widely with insulation and setup, but using current Ofgem price cap rates, a heat pump performing at the UK trial average works out roughly level with a gas boiler’s running cost, give or take, depending on your home.
- Does the October 2026 VAT change affect heat pump cost?
- Yes. Electricity is VAT free from 1 October 2026 to 31 March 2027, which lowers the effective unit rate a heat pump runs on and narrows the gap with gas during that period.
- Is a heat pump cheaper than gas if my home is poorly insulated?
- Not usually. A poorly insulated home tends to push a heat pump’s real-world efficiency down, which can make its running cost higher than a gas boiler’s, so insulation is worth checking first.
- What is the difference between SCOP and SPF?
- SCOP is the design efficiency quoted on a product’s datasheet. SPF is what the system actually achieves once installed in a real home. UK monitoring has found a gap between the two, which is why it’s worth treating a datasheet figure as a best case rather than a promise.
- Where do the price cap figures in this guide come from?
- They’re Ofgem’s published unit rates for the 1 October to 31 December 2026 price cap, checked September 2026. Ofgem updates the cap every three months, so it’s worth rechecking the current figures before you rely on them.
