What Happens to Heat Pump Costs If Electricity Prices Rise?
In our illustration, a 10% rise in electricity prices adds about £73 a year to a heat pump on a Cosy-style time-of-use tariff, against about £105 on a standard tariff. While electricity price volatility is a valid concern, heat pump owners have multiple tools to manage their exposure, from tariff optimisation to solar generation.
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Impact of Price Rises on Heat Pump Costs
| Scenario | Standard Tariff Cost | Cosy-Style Tariff Cost |
|---|---|---|
| Current price cap rate | £1,053 | £731 |
| 10% price rise | £1,158 | £804 |
| 20% price rise | £1,264 | £877 |
| 30% price rise | £1,369 | £950 |
Illustration based on 4,000 kWh annual heat pump usage at the October 2026 price cap rate of 26.32p/kWh; Cosy-style = 60% of use in cheap windows 51% below a day rate taken as the price cap rate. Solar panels reduce the electricity you buy, and so your exposure, by an amount that depends on your system.
The key insight: on a Cosy-style tariff, a 30% price rise adds about £219 a year, against about £316 on a standard tariff. Solar panels reduce your exposure further.
Four Strategies to Future-Proof Your Bills
1. Add Solar Panels
Generate your own electricity to offset part of your usage. See our solar guide
2. Improve Insulation
Reduce heat demand permanently. Less demand = less exposure. See insulation guide
3. Use Time-of-Use Tariffs
Off-peak rates have historically risen less than standard rates. See tariff guide
4. Optimise COP
Higher COP = less electricity per unit of heat = less exposure
Heat Pumps vs Gas if Prices Rise
Energy price rises typically affect both electricity and gas. Against a 90% efficient gas boiler, a heat pump with COP 3.2 breaks even when electricity costs about 3.6 times as much per kWh as gas. At the 1 October 2026 to 31 December 2026 price cap the ratio is about 3.3:1 (26.32p vs 7.97p), so a heat pump is already slightly cheaper on unit rates, and time-of-use tariffs widen the gap. The government's commitment to rebalancing energy levies may further tip the balance toward electricity.
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Frequently Asked Questions
Will heat pump running costs increase if electricity prices rise?
Yes, but COP and tariff choice significantly reduce your exposure. In our illustration, a 10% rise adds about £73 on a Cosy-style tariff versus about £105 on a standard tariff.
How can I protect against electricity price rises?
Add solar panels, improve insulation, use time-of-use tariffs, and optimise COP. Combined, these can substantially reduce your exposure.
Are heat pumps still cheaper than gas boilers if electricity prices rise?
At current price cap rates a heat pump with a COP of 3.2 is already slightly cheaper than a 90% efficient gas boiler on unit rates, and more so on time-of-use tariffs. The advantage holds unless electricity rises considerably faster than gas. See our comparison guide.
Will the government help with electricity costs for heat pump owners?
The government has committed to reviewing energy levies to rebalance costs between electricity and gas. This could reduce the electricity price for heat pump owners, though no specific timeline has been confirmed.
Future-Proofing UK Heat Pump Economics
Electricity price volatility is a concern, but the trajectory is positive for heat pump owners. Increasing renewable generation drives down wholesale prices, especially off-peak. Government levy rebalancing will reduce the policy costs loaded onto electricity. And the combination of solar panels, insulation, and smart tariffs gives homeowners multiple tools to manage their exposure. The Boiler Upgrade Scheme reduces upfront costs while these running cost measures ensure long-term affordability.