This guide compares heat pumps and gas boilers on installation cost and running cost, using official figures only. Installation figures come from Boiler Upgrade Scheme statistics, and energy prices come from the Ofgem price cap. We do not calculate annual bills or savings, because these depend on your home and how you use heating. Use the figures to understand the trade-offs, then ask installers to model your home.
For the broader overview, read our guide: How Much Is a Heat Pump.
Independent guide. We are not a lender or a government body. Always check current scheme rules with the official provider.
1. Compare upfront installation costs
DESNZ publishes installer-reported heat pump costs from MCS certificates. The figures include the system, labour and VAT, before the grant is deducted. DESNZ notes that installers may interpret this differently, and it excludes the highest and lowest 10% of costs. The median air-to-water system had a capacity of 8 kW. No cost data is published for air-to-air heat pumps.
| System | Lower quartile | Median | Upper quartile |
|---|---|---|---|
| Air-to-water heat pump | £11,128 | £12,908 | £15,627 |
| Ground source heat pump | £18,136 | £27,232 | £42,110 |
| Biomass boiler | Not shown | £13,765 | Not shown |
Illustrative arithmetic, not a quote: the £7,500 Boiler Upgrade Scheme grant would leave about £5,408 to pay on a median air-to-water install. The grant is £9,000 if you replace oil or LPG off the gas grid. There is no equivalent official dataset for gas boiler installation costs. Ask for written gas boiler quotes if you want a like-for-like comparison.
2. Compare energy prices per unit
Ofgem sets the price cap every three months. For 1 October to 31 December 2026, the GB average Direct Debit rates are shown below. Gas figures include 5% VAT. There is no VAT on electricity from 1 October 2026 to 31 March 2027.
| Fuel | Unit rate | Standing charge |
|---|---|---|
| Electricity | 26.32p per kWh | 54.83p per day |
| Gas | 7.97p per kWh | 29.68p per day |
At these rates, electricity costs about 3.3 times as much per kWh as gas (26.32 ÷ 7.97). A heat pump's efficiency offsets much of this gap, because it moves heat rather than burning fuel. The Energy Saving Trust says heat pumps are more than three times as efficient as a gas boiler. It also says heat pumps currently generally cost slightly more to run than a new gas boiler. Running costs depend on radiator sizing, tariff and controls.
3. Understand what tips the balance
The price gap between electricity and gas is close to the efficiency advantage of a well-designed heat pump. Small design and usage choices therefore decide which system costs less to run in your home. Ask your installer how each factor below applies to your property. Request their running-cost assumptions in writing.
Compare those assumptions across quotes, rather than comparing headline efficiency claims alone. A quote that skips a room-by-room heat-loss survey gives you less to compare. Ask how the installer will set flow temperature and controls at handover. Keep the written answers with your quotes so you can check the finished system against them.
- Flow temperature: lower flow temperatures usually help a heat pump work more efficiently.
- Radiators: correctly sized radiators let the system heat rooms at lower temperatures.
- Insulation: lower heat loss reduces the energy the system needs.
- Tariff: your electricity tariff affects the cost of each unit you use.
- Controls: steady running and weather compensation support efficient operation.
Checklist
- I have compared official heat pump medians with my quotes.
- I know which grant value applies to my home.
- I have written gas boiler quotes if I want a direct comparison.
- I understand the current Ofgem unit rates.
- I have asked about flow temperature, radiators, insulation, tariff and controls.
Frequently asked questions
Is a heat pump cheaper to run than my gas boiler?
Not always. The Energy Saving Trust says heat pumps currently generally cost slightly more to run than a new gas boiler. Design, radiators, tariff and controls decide the result in your home.
Why do you not show annual bill savings?
Annual costs depend on your home's heat loss, usage and tariff. Ask an MCS installer to explain their running-cost assumptions for your property.
Do the official heat pump costs include the grant?
No. The DESNZ figures are before the Boiler Upgrade Scheme grant is deducted.
Is there official data on gas boiler installation costs?
There is no equivalent official dataset. Ask for written quotes if you want to compare.
How often do the energy prices on this page change?
Ofgem updates the price cap every three months. Check the Ofgem page for the current period.
So you can compare heat pump and gas costs using official figures and ask installers the right questions.
WHLS Editorial Team
Our editorial team writes independent, plain-English guides on home energy finance. We review guides when scheme rules change.
References
- DESNZ – Boiler Upgrade Scheme statistics: August 2026 (opens in a new tab)
- Ofgem – Energy price cap unit rates and standing charges (opens in a new tab)
- Energy Saving Trust – Air source heat pumps (opens in a new tab)
- GOV.UK – Notice of approved grant categories and values for the Boiler Upgrade Scheme (opens in a new tab)
- Energy Saving Trust – Boiler Upgrade Scheme (opens in a new tab)
- MoneySavingExpert – Warm Homes Loan Scheme news (October 2026) (opens in a new tab)
- Financial Conduct Authority – Financial Services Register (opens in a new tab)
- MCS – Find an installer (opens in a new tab)
