Heat Pump vs Gas Boiler: What Are the Running Costs?

This is the question everyone wants answered, and it deserves an honest, nuanced response. The short version: a well-installed heat pump typically costs about the same as a gas boiler to run, and can cost less with a smart tariff.

Gas currently costs around 6-7p per kWh, while electricity costs around 24-25p per kWh. On the face of it, electricity is about four times more expensive. But here's the crucial difference: a heat pump is about four times more efficient than a gas boiler.

A gas boiler converts about 85-92% of the gas it burns into useful heat. A heat pump, on the other hand, typically achieves a Seasonal Performance Factor (SPF) of 3.0-3.5, meaning it produces 3 to 3.5 units of heat for every unit of electricity consumed.

For a typical three-bedroom semi-detached house using 12,000 kWh of heat per year: a gas boiler costs approximately £900-£1,000 per year. A heat pump on a standard tariff costs approximately £850-£1,100 per year. A heat pump on a smart/time-of-use tariff can cost as little as £600-£800 per year.

The real savings come when you factor in smart tariffs like Octopus Agile or Cosy, which offer cheaper electricity during off-peak hours. Since heat pumps can pre-heat your home and hot water during cheap periods, you can significantly reduce your bills.

And unlike gas, electricity prices are trending downward as more renewable generation comes online. The long-term economics strongly favour heat pumps.