A heat pump’s running cost depends on two things: how efficiently it converts electricity into heat (its seasonal coefficient of performance, or SCOP), and how expensive electricity is relative to the fuel it is replacing. At current UK tariffs, where electricity costs around four times as much as gas per unit, a heat pump needs to achieve a SCOP of around 4.0 just to match a gas boiler’s running cost. Most well-installed heat pumps in reasonably insulated UK homes achieve a SCOP of 2.5 to 3.5. This means the running cost picture for gas-to-heat-pump switching is more complex than installers often suggest, and the tool below shows it honestly.
For oil and LPG-heated properties, the comparison is more favourable: the narrower gap between electricity and oil or LPG prices means a heat pump typically costs less to run, sometimes significantly so. This calculator takes your current fuel type, annual heating bill, property insulation level, and electricity tariff and shows the estimated heat pump running cost, the annual saving or additional cost versus your current system, and the financial case for installation including the Boiler Upgrade Scheme grant and any loan. All figures are illustrative. Squared Money is an introducer, not a lender. If you choose to enquire, you will be connected with a regulated broker. This will not affect your credit score.
At a Glance
- For gas-heated homes, a heat pump will often cost more to run than the existing boiler at current tariffs. The case for switching from gas is primarily environmental and future-proofing as the electricity grid decarbonises, not immediate bill saving. This calculator shows the running cost comparison honestly: the heat pump running cost calculator.
- For oil and LPG-heated homes, the running cost saving is typically meaningful. At oil prices of around 8p to 9p per kWh equivalent and LPG at 10p to 12p, a heat pump operating at SCOP 2.8 or above produces a genuine annual saving: the heat pump running cost calculator.
- Insulation quality is the single biggest factor in heat pump efficiency. A heat pump in a well-insulated property operates at a higher SCOP than one in a poorly insulated property, because it runs at lower flow temperatures. For EPC E and below, the tool flags that insulation should come before a heat pump: insulation and heat pumps: why order matters.
- The Boiler Upgrade Scheme provides £7,500 toward the cost of a qualifying heat pump installation. This is a meaningful reduction in the net cost and significantly improves the financial case for installation, even where the running cost saving is modest: the heat pump running cost calculator.
- Heat pump-specific time-of-use electricity tariffs can improve the running cost comparison substantially. Some suppliers offer tariffs with lower overnight rates specifically designed for heat pumps. These are not modelled in this calculator but can reduce running costs by 15% to 30% compared with a standard unit rate.
Heat pump running cost calculator
Compare estimated heat pump running costs against your current heating system. All figures are illustrative and depend on your specific installation, property, and tariff.
Your current heating system
Your property
Estimated seasonal coefficient of performance for your property. This is the ratio of heat produced to electricity consumed across a full heating season. A higher SCOP means lower running costs.
Installation cost and loan
About This Calculator
The SCOP figure
What the Seasonal Coefficient of Performance means
The SCOP is the ratio of heat delivered to electricity consumed across a full heating season. A SCOP of 3.0 means the heat pump delivers 3 units of heat for every 1 unit of electricity it uses. A higher SCOP means lower electricity consumption for the same heat output. The SCOP is primarily determined by how warm the heat pump needs to make the water circulating through the heating system: lower flow temperatures in a well-insulated property allow higher SCOP. Poorly insulated properties require higher flow temperatures, which reduces efficiency.
The gas comparison
Why switching from gas is rarely cheaper at current tariffs
With electricity at around 24p/kWh and gas at around 6p/kWh, a heat pump needs to achieve a SCOP of 4.0 just to match gas running costs. Most UK installations achieve 2.5 to 3.5. This means a heat pump replacing a gas boiler will typically cost more to run at current tariff levels. The gap narrows significantly with a heat pump-specific time-of-use tariff, which can reduce effective electricity costs by 15% to 30%. The running cost comparison will also improve as the electricity grid decarbonises and the relative cost of gas rises.
Boiler Upgrade Scheme
What qualifies and how the grant works
The BUS provides £7,500 toward the installation of an air source or ground source heat pump in eligible properties in England and Wales. The grant is claimed by the MCS-certified installer and deducted from the invoice before the homeowner pays. Eligibility requires a valid EPC with no outstanding recommendations for loft or cavity wall insulation. The scheme is funded in rounds and is not always available: check GOV.UK for current status before relying on it in your budget. The toggle in the calculator above removes the grant from the calculation to show the position without it.
Heat pump tariffs
How the right electricity tariff changes the picture
Several suppliers now offer electricity tariffs specifically designed for heat pump households, with overnight off-peak rates as low as 7p to 12p/kWh. Because heat pumps can run overnight to pre-heat the property and store warmth in the building fabric, households on these tariffs can achieve much lower effective electricity costs than the standard unit rate. This calculator uses a single unit rate for simplicity: if you have or intend to switch to a time-of-use tariff, reduce the electricity rate slider to reflect your expected average cost per kWh across the day.
Insulation and Heat Pumps: Why Order Matters
A heat pump’s efficiency is directly related to the flow temperature it needs to maintain: the warmer the water circulating through radiators or underfloor heating needs to be, the harder the heat pump works and the lower its SCOP. In a well-insulated property, a lower flow temperature of 35 to 45 degrees Celsius is sufficient to maintain comfort. In a poorly insulated property, 55 to 65 degrees may be needed, which significantly reduces efficiency and increases running costs.
The practical implication is that insulation improvements before heat pump installation increase the SCOP the system achieves in practice, reduce the size of heat pump needed (which reduces the capital cost), and improve the running cost comparison against the existing system. Installing a heat pump in a property that still needs insulation, then adding insulation later, typically produces a system that is oversized for the post-insulation heat demand and therefore runs less efficiently than it would if it had been specified for the insulated property from the start. The Boiler Upgrade Scheme enforces this logic by requiring a valid EPC with no outstanding insulation recommendations as a condition of eligibility. Our guide to home improvement loans for energy efficiency upgrades covers insulation options and funding in detail, and our guide to government grants vs home improvement loans covers which insulation measures may qualify for grant funding.
How to Use This Calculator
Select your current fuel and annual bill
Select the fuel your current heating system uses. For the annual bill, use your actual spend on space heating and hot water over the last twelve months, not your total energy bill. If you have a dual-fuel property with gas heating and a separate electricity meter for other uses, use the gas portion only.
Select your EPC rating
Use your most recent EPC certificate. If you do not have one, an EPC is available on the government’s Find an Energy Certificate service using your address. Select the nearest band to your property’s current rating. The EPC determines the SCOP estimate, which drives the running cost calculation.
Enter your electricity rate and check the BUS toggle
Your current electricity unit rate is on your energy bill. If you are considering switching to a heat pump-specific tariff, use that tariff’s average blended rate rather than the standard unit rate to see a more optimistic running cost comparison. Toggle the BUS grant on or off to see the installation cost with and without it.
Set the system cost and loan terms
Use the quote from an MCS-certified installer if you have one. If not, £8,000 to £12,000 is a typical range for a mid-sized domestic air source heat pump installation before the BUS grant. Adjust the APR and term to reflect the product you are considering or to test how different terms affect the break-even position.
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Covers the Boiler Upgrade Scheme eligibility in full, alongside ECO4 and the Great British Insulation Scheme. Essential reading before committing to any heat pump installation budget.
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Checking won’t harm your credit scoreFrequently Asked Questions
My current system is gas. Does a heat pump make financial sense?
At current UK energy tariffs, a heat pump replacing a gas boiler typically costs more to run, not less. This is because electricity costs around four times as much per unit as gas, and a heat pump needs to achieve a SCOP of approximately 4.0 to compensate for that price difference. While heat pumps do achieve SCOPs in the range of 2.5 to 3.5, even very well-installed systems in excellent properties rarely sustain a SCOP of 4.0 across a full UK heating season. The calculator above will typically show a negative annual saving for gas-heated properties, which reflects the honest position at current tariff levels.
The financial case for switching from gas rests on three other factors: the Boiler Upgrade Scheme grant of £7,500 reduces the capital cost significantly, making the installation cost comparison with a gas boiler replacement more competitive. Heat pump-specific time-of-use tariffs reduce the effective electricity rate by 15% to 30% in households that can shift consumption to off-peak periods. And as the electricity grid decarbonises through the 2030s, the relative cost of electricity versus gas is expected to narrow, improving the running cost comparison. If your gas boiler is approaching the end of its life and you are comparing heat pump installation against boiler replacement, the BUS grant changes the capital comparison materially and is the most important factor to confirm first.
What size heat pump does my property need?
Heat pump sizing is calculated from the property’s heat loss rate, which is determined by the floor area, insulation levels, number and type of windows, and the temperature difference between inside and outside on the coldest expected day. An MCS-certified installer is required to carry out a heat loss calculation before specifying a heat pump, and this should be the basis for the system size, not a rule of thumb based on property size alone. As a general guide, a typical three-bedroom semi-detached house in England with average insulation has a heat loss of approximately 6 to 9 kilowatts on a cold day, which typically requires a 7 to 10kW heat pump.
Oversizing is a common problem in heat pump installations, particularly when the calculation is done without improving insulation first. An oversized heat pump cycles on and off more frequently rather than running continuously at low output, which reduces its efficiency and increases wear. Getting the heat loss calculation right, and improving insulation before the calculation is done where possible, produces a system that is appropriately sized for the post-insulation property and runs more efficiently as a result. The Boiler Upgrade Scheme requires an MCS-certified installer who must carry out a heat loss calculation as part of the BUS application process.
Do I need to replace my radiators when installing a heat pump?
Not necessarily, but it depends on the size of your existing radiators and the flow temperature the heat pump needs to operate at. Standard gas boiler radiators are typically sized for flow temperatures of 70 to 80 degrees Celsius. A heat pump operates most efficiently at flow temperatures of 35 to 50 degrees Celsius. At lower flow temperatures, smaller radiators may not produce enough heat output to maintain comfortable room temperatures. A heat loss calculation, which the installer is required to carry out for the BUS application, will identify which rooms need larger radiators and what the replacement or upgrade cost is.
In practice, many properties with reasonably modern radiators can operate a heat pump at higher flow temperatures of 50 to 55 degrees without replacing radiators, accepting a slight SCOP penalty. Others, particularly older properties with small or old radiators, need significant radiator upgrades before the system works well. The radiator upgrade cost is not covered by the BUS grant and should be included in the total project budget. Underfloor heating is ideal for heat pumps because it operates well at low flow temperatures, but retrofitting underfloor heating is expensive and disruptive and is generally only practical during a full renovation rather than a standalone heat pump installation.
Can a heat pump also provide hot water?
Yes. Most domestic heat pump systems include a hot water cylinder and use the heat pump to heat both the space heating circuit and the domestic hot water. The heat pump heats the cylinder to a lower temperature than a conventional boiler, typically 50 to 55 degrees Celsius, with a periodic legionella prevention cycle at higher temperature. This is sufficient for normal domestic hot water use. The hot water cylinder is typically larger than the standard cylinder in a gas-heated property, commonly 200 to 300 litres, and the cylinder and installation cost are usually included in the heat pump installation quote.
If the property has a combi boiler with no separate hot water cylinder, installing a heat pump will require finding space for a cylinder, which is a consideration for smaller properties. The heat pump system cost in this calculator is intended to include the cylinder and all associated pipework and controls as a complete installation, but this should be confirmed with the installer when obtaining a quote. Some households with solar panels find that combining a solar diverter with the heat pump system, which uses surplus solar generation to heat the hot water cylinder, reduces hot water running costs further and is worth discussing with the installer if solar panels are already installed or planned.
Squaring Up
The heat pump running cost question has an honest answer that depends on your current fuel. For oil and LPG properties, the annual saving is typically real and meaningful: the narrower gap between electricity and fossil fuel prices at those fuel types means a heat pump operating at SCOP 2.5 or above produces a genuine reduction in running costs. For gas properties, the running cost comparison is typically unfavourable at current tariffs, and the financial case rests on the BUS grant reducing the capital cost, the potential of a heat pump-specific tariff to reduce electricity costs, and the long-term direction of energy prices as the grid decarbonises.
Insulation before installation is not an optional extra: it directly affects the SCOP the heat pump achieves, the size of system needed, and whether the BUS grant is available. A heat pump in a poorly insulated property is likely to disappoint on running costs and may not qualify for the grant. Getting the insulation right first, then sizing the heat pump for the insulated property, produces the best financial and operational outcome.
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Checking won’t harm your credit score Check eligibilityThis tool is for illustrative purposes only and does not constitute financial or energy advice. All running cost estimates are based on illustrative fuel and electricity prices and estimated SCOP values, which will differ from actual figures depending on your specific installation, property construction, usage patterns, and tariff. Boiler Upgrade Scheme eligibility and funding availability are subject to change: always verify current status on GOV.UK before incorporating the grant into any budget. Heat pump sizing should always be carried out by an MCS-certified installer using a full heat loss calculation. Your home may be at risk if you do not keep up repayments on a secured loan.
