How much do heat pumps cost to run? An update.... part 2

Using the correct electricity tariff for your heat pump

This is the second of three posts updating our thoughts on the cost effectiveness of heat pumps. Check out the previous post, where we talk about heat pump flow temps.

In this post we focus on the relative costs of providing heating via gas, oil and heat pumps, and the positive impact of an appropriate electricity tariff.

According to Nottingham Energy Partnership data from December 2024:

Cost of providing 1kWh of heating:

Heating source	Cost per kWh pence
Electricity	30.85
Oil	6.30
Gas	7.88

 And based on a Samsung R290 heat pump with a flow temperature of 55°C, SCoP 3.53:

Heating source	Cost per kWh pence
Heat pump	8.73

At this point, you're going to say the heat pump costs more to run. True – but only if you are on a standard constant electricity tariff of 30.85 pence per kWh.

Anyone with an electric car is likely to be on an EV charging tariff, which provides several hours of electricity at a significantly reduced cost. What came as a nice surprise when we switched supplier is that Octopus Energy provide a heat pump tariff – ‘Cosy Octopus’.

Cosy Octopus has three pricing bands. This is for where we live, to give you an idea:

1. Super cheap – 11.86p/kWh at the following times:

04:00 – 07:00

13:00 – 16:00

22:00 – 00:00

2. Peak rate – 35.09p/kWh at the following times:

16:00 – 19:00

3. Standard rate – 24.2p/kWh the rest of the time

Heat pumps are ideally meant to be left on, so the current average electricity cost for Cosy Octopus is: 21.45p/kWh. That's a lot better than 30.85p/kWh!

Cosy Octopus is a tariff designed for heat pumps, so at 21.45p/kWh, the heat pump will cost on average:

Heating source	Cost per kWh pence
Heat pump	6.08

So it's much cheaper to heat your home with a heat pump than using oil and gas.

Now comes the interesting bit! (OK, yes I'm a geek). I have considered three scenarios for using the Cosy Octopus tariff:

1. Leave the heat pump on 24/7. This will cost 6.08 pence per kWh.

2. Turn the heat pump off during the peak period – not recommended but possible. This will result in a cost of 5.52 pence per kWh.

3. Use battery storage to store electricity during the discounted periods for use the rest of the time. This will cost 3.37 pence per kWh.

That’s almost half the cost of oil!

Now, going back to the previous post where flow temperature is taken into account, the following graph details the impact of using Cosy Octopus in the three ways I discuss above, and also the effect of changing the heat pump flow temperature.

What this shows is that, as long as the heat pump flow temperature is 55°C or below, it's cheaper to heat with a heat pump than using oil and gas. Also, if you are able to store electricity when it is cheapest, you have the potential to significantly reduce the heating cost of a property. This is so important for property owners who are considering replacing a gas or oil boiler with a heat pump. Flow temperatures of 55°C should be achievable for most people, which means not only is there a reduction in carbon emissions but it is cheap to run!

We firmly believe that heat pumps can be very cost effective, but you do need to do a bit of homework, such as making sure you're on a good tariff with your supplier. Thanks should go to Octopus for providing a tariff that makes it cheaper to heat with a heat pump than oil and gas. Please spread the word about this as it should go a long way to dispelling some of the myths surrounding heat pumps.