Home Heat Pump Guide

Heat Pump vs Electric Storage Heater Costs

If you heat your home with electric storage heaters, you are paying the highest heating bills of anyone in the UK. Electric resistance heating — whether storage heaters, panel heaters, or convectors — operates at a COP of 1.0. That means every 1kWh of electricity produces exactly 1kWh of heat. A heat pump, by contrast, produces 2.5 to 3.5 kWh of heat from the same 1kWh of electricity. The savings potential is enormous.

This guide breaks down the real numbers. If you are currently spending £1,500 or more per year on electric heating, a heat pump could cut that to £500-£700. No other heating upgrade offers such dramatic savings.

Why Electric Heating Is So Expensive

The fundamental problem with electric storage heaters, panel heaters, and other direct electric heating is simple physics. They convert electricity to heat at a 1:1 ratio. At the current Ofgem electricity rate of 24.50p per kWh, every kilowatt-hour of heat costs you 24.50p.

Compare that to other heating systems:

  • Electric storage heaters: 24.50p per kWh of heat (or 10-15p on Economy 7 off-peak)
  • Gas boiler (90% efficient): approximately 7.2p per kWh of heat
  • Oil boiler (90% efficient): approximately 7.5p per kWh of heat
  • Heat pump (COP 3.0): approximately 8.2p per kWh of heat
  • Heat pump (COP 3.0, TOU tariff): approximately 6.0p per kWh of heat

Even on an Economy 7 tariff where off-peak electricity costs 10-12p per kWh, storage heaters still cost more per unit of heat than a heat pump on a standard tariff. And storage heaters on Economy 7 only charge for seven hours overnight — if you need top-up heating during the day, you pay the full peak rate.

The Storage Heater Problem

Storage heaters were designed for a world where overnight electricity was very cheap. They charge up using off-peak electricity (typically midnight to 7am) and release heat during the day. In theory, this sounds reasonable. In practice:

  • They release most of their heat in the morning, when you may not need it
  • By evening, when you want warmth, they have often run out of stored heat
  • You then use expensive peak-rate panel heaters or fan heaters to top up
  • Temperature control is poor — rooms are either too hot or not warm enough
  • The off-peak/peak price differential has narrowed significantly over the years

Modern dynamic storage heaters (like Dimplex Quantum) are better at managing heat release, but they still fundamentally operate at COP 1.0. Better controls cannot overcome the basic efficiency limitation.

What Electric Heating Actually Costs Per Year

Here are realistic annual heating costs for electrically heated homes, based on typical heat demands and a blended electricity rate accounting for both off-peak and peak-rate usage:

One-Bedroom Flat (Heat Demand: 4,500 kWh)

  • Storage heaters (blended rate 16p/kWh): £720
  • Panel/convector heaters (standard rate 24.50p/kWh): £1,103

Two-Bedroom Flat (Heat Demand: 7,000 kWh)

  • Storage heaters (blended rate 16p/kWh): £1,120
  • Panel/convector heaters (standard rate 24.50p/kWh): £1,715

Three-Bedroom House (Heat Demand: 12,000 kWh)

  • Storage heaters (blended rate 16p/kWh): £1,920
  • Panel/convector heaters (standard rate 24.50p/kWh): £2,940

Four-Bedroom House (Heat Demand: 18,000 kWh)

  • Storage heaters (blended rate 16p/kWh): £2,880
  • Panel/convector heaters (standard rate 24.50p/kWh): £4,410

These are stark numbers. A three-bedroom house heated with panel heaters on a standard tariff could be spending nearly £3,000 per year on heating alone.

Heat Pump Costs for the Same Properties

Now let us look at what a heat pump would cost for the same properties, using a seasonal COP of 3.0 and the standard electricity rate of 24.50p per kWh:

One-Bedroom Flat (4,500 kWh Heat Demand)

  • Electricity consumed: 1,500 kWh
  • Annual cost: £368
  • With TOU tariff (18p/kWh): £270

Two-Bedroom Flat (7,000 kWh Heat Demand)

  • Electricity consumed: 2,333 kWh
  • Annual cost: £572
  • With TOU tariff (18p/kWh): £420

Three-Bedroom House (12,000 kWh Heat Demand)

  • Electricity consumed: 4,000 kWh
  • Annual cost: £980
  • With TOU tariff (18p/kWh): £720

Four-Bedroom House (18,000 kWh Heat Demand)

  • Electricity consumed: 6,000 kWh
  • Annual cost: £1,470
  • With TOU tariff (18p/kWh): £1,080

The Savings Are Enormous

Here is the annual saving from switching to a heat pump, compared to electric storage heaters:

  • One-bedroom flat: £352 to £450 saved per year
  • Two-bedroom flat: £548 to £700 saved per year
  • Three-bedroom house: £940 to £1,200 saved per year
  • Four-bedroom house: £1,410 to £1,800 saved per year

Compared to panel heaters on standard tariff, the savings are even larger — up to 70% reduction in heating costs. For a detailed breakdown of running costs, see our running costs guide.

Installation Costs and Payback

The Challenge: No Existing Wet System

The biggest consideration for homes currently heated electrically is that there is usually no existing wet central heating system — no radiators, no pipework, no hot water cylinder. Installing a heat pump means installing an entire wet heating system from scratch, which increases the cost significantly.

Typical installation costs (including radiators, pipework, cylinder, and heat pump):

  • One-bedroom flat: £10,000-£14,000 (may be limited by space for external unit)
  • Two-bedroom flat: £12,000-£16,000
  • Three-bedroom house: £14,000-£20,000
  • Four-bedroom house: £16,000-£24,000

After the BUS grant of £7,500, these reduce to:

  • One-bedroom flat: £2,500-£6,500
  • Two-bedroom flat: £4,500-£8,500
  • Three-bedroom house: £6,500-£12,500
  • Four-bedroom house: £8,500-£16,500

Payback Periods

Despite the higher installation cost, the massive running cost savings mean payback can be surprisingly quick:

  • One-bedroom flat: 6-15 years payback
  • Two-bedroom flat: 7-15 years payback
  • Three-bedroom house: 5-13 years payback
  • Four-bedroom house: 5-12 years payback

Larger properties tend to have shorter payback periods because the savings are proportionally greater. Use our calculator to estimate payback for your specific situation.

Practical Considerations for Electric-to-Heat-Pump Switches

Flats and Apartments

Many electrically heated properties are flats. Installing a heat pump in a flat presents specific challenges: you need space for an external unit (balcony, communal area, or wall-mounted), permission from the freeholder or management company, and space inside for a hot water cylinder and pipework. It is possible but requires careful planning. See our guide on heat pump costs for flat-specific considerations.

Disruption During Installation

Because you are installing an entirely new heating system, the work is more disruptive than a simple boiler swap. Expect pipework to be run through the property, radiators installed in each room, and a hot water cylinder fitted. This typically takes 3-5 days for a house and potentially longer for a flat. Plan the installation for spring or autumn when you are least dependent on heating.

Electrical Supply

Homes with electric heating already have a robust electrical supply, which is actually an advantage. Many already have higher-rated fuses or even three-phase supply, which means the heat pump can be connected without any electrical upgrade. This saves cost compared to homes that need their supply upgraded.

Insulation First

Electrically heated homes are often poorly insulated — older flats, converted buildings, and properties where heating was added as an afterthought. Improving insulation before installing a heat pump reduces the size and cost of the system needed and maximises your savings. Read our installation guide for advice on preparation.

What About Air-to-Air Heat Pumps?

Air-to-air heat pumps (essentially reversible air conditioning units) are a lower-cost alternative that can work well in some electrically heated properties. They cost £1,500-£3,000 per unit to install and operate at COP 3.0-4.0. However, they provide warm air rather than radiator heating, do not provide hot water, and typically heat individual rooms rather than the whole house.

For a single room or open-plan flat, an air-to-air unit can be a pragmatic intermediate step. For whole-house heating and hot water, an air-to-water heat pump with a wet system is the better long-term solution.

Frequently Asked Questions

Is it worth switching from storage heaters to a heat pump?

In most cases, yes. The running cost savings of 60-70% are the largest of any heating switch. Even with the higher installation cost of fitting a complete wet system, the payback period is typically 5-15 years, well within the 20-year lifespan of the heat pump. The improvement in comfort is also significant — you get consistent, controllable heat rather than the feast-or-famine pattern of storage heaters.

Can I get the BUS grant if I have electric heating?

Yes. The Boiler Upgrade Scheme covers replacement of any existing heating system, including electric storage heaters and other electric heating. The property must have a valid EPC and any recommended loft or cavity wall insulation must be in place or addressed as part of the project.

What if I only have panel heaters, not storage heaters?

The case for switching is even stronger. Panel heaters use peak-rate electricity at 24.50p per kWh, making them the single most expensive way to heat a home. A heat pump will save you 65-75% on heating costs compared to panel heaters.

Will the heat pump need a bigger electrical supply?

Usually not. Most electrically heated homes already have a sufficient electrical supply for a heat pump. A typical air source heat pump draws 2-5kW of electricity, which is less than many electric heating systems combined. Your installer will check as part of the survey.

Can I keep some storage heaters alongside a heat pump?

There is no technical reason you cannot, but it makes little financial sense. The rooms heated by storage heaters would still be paying the highest rate per unit of heat. It is better to extend the wet system throughout the property and benefit from the heat pump's efficiency everywhere.

How much will my electricity bill change?

Your overall electricity consumption will drop significantly. If you currently use 12,000 kWh for heating, a heat pump at COP 3.0 will use only 4,000 kWh for the same heat output. Your electricity bill for heating falls by roughly two-thirds. Your total bill falls by less than two-thirds because you still have non-heating electricity use (lights, appliances, cooking) which is unchanged.

Ready to explore your options? Check whether a heat pump suits your property with our suitability checker, or get free quotes from MCS-certified installers.