Heat pumps vs gas boilers: the running cost
Air source heat pumps are central to the UK's plan to decarbonise home heating, and a £7,500 government grant cuts the upfront cost. But whether one saves you money depends on its efficiency and the gap between gas and electricity prices. Here's how the maths works.
Efficiency is everything
A gas boiler is about 90% efficient — it turns 1 kWh of gas into roughly 0.9 kWh of heat. A heat pump is different: it moves heat rather than burning fuel, delivering 3 or more units of heat per unit of electricity. That ratio is the SCOP (Seasonal Coefficient of Performance), typically 3.0–3.5 for a well-installed system.
Why running cost is a close call
Electricity costs around four times as much as gas per kWh under the price cap. A heat pump's 3× efficiency advantage roughly offsets — but not always beats — that price gap. The better the SCOP and the smaller the gas-to-electricity price ratio, the more a heat pump saves. A leaky, poorly-insulated home forces the pump to work harder and lowers its real-world SCOP.
Special tariffs change the picture
The Boiler Upgrade Scheme
In England and Wales, the Boiler Upgrade Scheme gives a £7,500 grant towards an air source (or £7,500 for ground source) heat pump, paid to your installer and knocked off the price. Scotland has its own Home Energy Scotland grants and interest-free loans. This brings a typical £13,000 install down to around £5,500 net.
A typical home
A home needing 12,000 kWh of heat a year: a 90% gas boiler burns about 13,300 kWh of gas, costing roughly £930 at 7p. A heat pump with a SCOP of 3.2 uses about 3,750 kWh of electricity, costing about £1,010 at 27p — slightly more to run at standard rates. On a heat-pump tariff nearer 15p, the same pump costs about £560, saving around £370 a year.
Common heat pump mistakes
- Comparing on standard electricity rates. Heat-pump tariffs and time-of-use deals materially lower running cost.
- Skipping insulation. A poorly-insulated home cripples the real-world SCOP and inflates bills.
- Oversizing or undersizing. A proper heat-loss survey is essential; the wrong size wastes money or underheats.
- Ignoring the grant deadline. The Boiler Upgrade Scheme has limited funding windows — check current availability.