Reviewed by Mustafa Bilgic
Founder, WebCalculator
BUS grant per gov.uk/apply-boiler-upgrade-scheme. Energy rates from Ofgem Q3 2026 cap. COP and installation costs are typical ranges. Not financial advice.
This heat pump cost calculator compares the annual running cost of an air source heat pump against a gas boiler, using the Ofgem Q3 2026 price cap rates. Enter your annual heating demand, the heat pump's COP and the installation cost (after the BUS grant) to see the payback period and long-term savings.
Running cost & payback
A gas boiler burns gas to create heat directly. An air source heat pump uses electricity to move heat from outside air into your home — like a fridge in reverse. Because it moves heat rather than generating it, a heat pump delivers 2.5 to 3.5 kWh of heat per 1 kWh of electricity consumed (its COP). This makes it far more efficient in energy terms, even though electricity costs more per kWh than gas.
At current Ofgem cap rates (gas 7.33p/kWh, electricity 26.11p/kWh), a gas boiler at 90% efficiency produces heat at about 8.1p/kWh, while a heat pump at COP 3.0 produces heat at about 8.7p/kWh. Running costs are very similar — but the heat pump wins if you use an off-peak electricity tariff (7-9p/kWh) or solar panels.
The Boiler Upgrade Scheme provides a £7,500 grant towards air source heat pump installations in England and Wales. The grant is deducted at the point of sale by an MCS-certified installer — you do not pay the full price and claim back. The scheme runs until at least March 2028.
| Technology | BUS grant |
|---|---|
| Air source heat pump | £7,500 |
| Ground source heat pump | £7,500 |
| Biomass boiler (rural off-gas-grid only) | £5,000 |
Source: gov.uk/apply-boiler-upgrade-scheme. Eligibility requires a valid EPC and an MCS-certified installer.
Gas boiler (90% eff): 12,000 / 0.9 = 13,333 kWh gas x 7.33p = £977/year
Heat pump (COP 3.0): 12,000 / 3.0 = 4,000 kWh electricity x 26.11p = £1,044/year
At standard rates, the gas boiler is £67/year cheaper. But on an off-peak tariff at 8p/kWh: 4,000 x 8p = £320/year — saving £657/year versus gas.
Installation: £12,000 - £7,500 BUS grant = £4,500 net
Payback (off-peak tariff): £4,500 / £657 = ~6.8 years
Insulate first. A heat pump works most efficiently in a well-insulated home. Loft and cavity wall insulation reduce heat demand and allow the system to run at lower flow temperatures, boosting COP.
Off-peak tariff. EV-style electricity tariffs with overnight rates of 7-9p/kWh slash heat pump running costs. Combined with a hot water cylinder heated overnight, you can cut your heat pump bill by 60% or more versus the standard cap rate.
Combine with solar. A 4kWp solar system generates ~3,600 kWh/year, which can cover much of a heat pump's electricity demand in spring and autumn. See the solar panel payback calculator.
When comparing a heat pump to a gas boiler, consider the full lifecycle. A new gas boiler costs £2,000 to £3,500 installed and lasts 10 to 15 years. A heat pump costs £4,500 net (after BUS grant) and lasts 15 to 20 years. Over 15 years, you may need to replace the gas boiler once (£2,500+ for a new one) while the heat pump should still be running. Factoring in this replacement cost and annual servicing (£80-£150 for either), the heat pump often wins on total cost of ownership even when annual running costs are similar.
The heating cost calculator estimates per-room heating costs. Use the energy bill calculator for your total household energy costs, and the EV charging cost calculator if you are considering an EV alongside a heat pump on an off-peak tariff.
A typical air source heat pump installation costs £7,000 to £14,000 before the government grant. The Boiler Upgrade Scheme (BUS) provides £7,500 towards the cost, reducing the net outlay to roughly £0 to £6,500 depending on the system and property. Costs vary by heat pump size, brand, and the complexity of the installation.
An air source heat pump with a COP of 3.0 delivers heat at about 8.7p per kWh using Ofgem Q3 2026 electricity at 26.11p per kWh. A gas boiler at 90% efficiency costs about 8.1p per kWh of useful heat at 7.33p per kWh gas. Running costs are therefore similar at current prices, but heat pumps benefit more from off-peak electricity tariffs and solar panels.
The Boiler Upgrade Scheme provides a £7,500 grant towards air source heat pump installations in England and Wales. The grant is applied as a discount by the installer at the point of installation — you do not need to pay upfront and claim back. The scheme runs until at least March 2028. Source: gov.uk/apply-boiler-upgrade-scheme.
COP stands for Coefficient of Performance. It measures how efficiently a heat pump converts electricity into heat. A COP of 3.0 means the pump produces 3 kWh of heat for every 1 kWh of electricity used. Higher COP means lower running costs. Typical air source heat pumps achieve a seasonal average COP of 2.5 to 3.5 in UK conditions.
Heat pumps run at lower flow temperatures than gas boilers, so you may need larger radiators or underfloor heating in some rooms to deliver the same warmth. A qualified installer will assess your property and recommend any changes. Well-insulated homes with modern radiators often need minimal upgrades.
For well-insulated homes with the BUS grant, a heat pump can be cost-competitive with gas. The financial case improves further on an off-peak electricity tariff or with solar panels. Beyond running costs, heat pumps reduce carbon emissions and will become increasingly advantageous as gas prices are expected to rise faster than electricity over the coming decade.
Air source heat pumps typically last 15 to 20 years with regular servicing, compared to 10 to 15 years for a gas boiler. The outdoor unit needs an annual check, similar to a boiler service. Longer lifespan means the total cost of ownership can be lower even if the upfront cost is higher.