Is a Heat Pump Cheaper Than Gas? The Honest Answer
On running costs alone, gas is about 9% cheaper at standard tariff rates. But factor in the £7,500 grant, the 20-year lifespan (vs 12–15 for a boiler), and off-peak tariffs, and a heat pump saves £3,000–£8,000 over its lifetime.
The honest answer is more nuanced than either side admits. Let us work through the real numbers.
Is a heat pump cheaper for YOUR home?
Our calculator compares your specific gas costs with heat pump costs — including the grant and tariff options.
Find out in 60 seconds →In this guide:
Running Costs: The Straight Comparison
Gas boiler
7.51p/kWh
of useful heat
Heat pump (standard)
8.17p/kWh
of useful heat
Heat pump (TOU)
6.00p/kWh
of useful heat
For a 3-bed semi (12,000 kWh demand): gas costs £901/year, heat pump costs £980 (standard) or £720 (TOU tariff). The standard tariff gap is about £80/year. For the detailed breakdown, see our comprehensive cost guide.
Why Running Cost Is Not the Whole Answer
The BUS Grant: £7,500 Off Installation
A new gas boiler: £2,500–£4,500. A heat pump after BUS grant: £2,500–£8,500. For straightforward installations, the net cost can be comparable.
Lifespan: 20 Years vs 12–15 Years
Over 25 years: two gas boilers at £3,500 each = £7,000. One heat pump at £12,000 minus £7,500 grant = £4,500. The heat pump saves £2,500 in installation costs alone.
Time-of-Use Tariffs
With a blended 18p/kWh rate, heat pump running costs flip to 20% cheaper than gas. For the 3-bed semi: £80/year premium becomes a £180/year saving. Over 20 years: £3,600. Combining with solar panels can push savings higher still.
Gas Standing Charge
Disconnecting from gas saves approximately £128/year.
Compare your total cost of ownership: gas vs heat pump
Run the comparison →Personalised to your property, fuel, and tariff.
The 20-Year Financial Summary (3-Bed Semi)
| Scenario | Gas Boiler | Heat Pump | HP Saving |
|---|---|---|---|
| Standard tariff | £30,080 | £27,100 | £2,980 |
| TOU tariff | £30,080 | £21,900 | £8,180 |
Gas includes installation, replacement at yr 13, running costs, servicing, standing charges. HP includes installation (after grant), running costs, servicing.
When Gas Genuinely Makes More Financial Sense
- Your gas boiler is under 5 years old and working well
- Your property needs major work before a heat pump (extensive radiators, insulation). Use our suitability checker first.
- You are planning to sell within 2–3 years
- You cannot access the BUS grant
When a Heat Pump Is the Clear Financial Winner
- Your gas boiler needs replacing soon (10+ years old)
- You can access the BUS grant
- Your property is EPC C or better
- You will use a TOU electricity tariff
- You plan to stay 5+ years
Beyond the Money
- Carbon reduction: 75% less CO2 than a gas boiler
- No combustion: no carbon monoxide risk
- Improved EPC: better for selling or letting
- Future-proofing: gas boilers will eventually be phased out
For the comprehensive analysis, see are heat pumps worth it.
Find out exactly what a heat pump saves you vs gas
Get free quotes from MCS installers →BUS grant applied. No obligation. No sales calls.
Frequently Asked Questions
Is a heat pump cheaper than gas right now?
On running costs at standard tariff, gas is marginally cheaper (9%). Over the full ownership period with the grant, TOU tariff, and longer lifespan, a heat pump is cheaper for most homeowners.
How much would I save by switching from gas to a heat pump?
Standard tariff: similar running costs. TOU tariff: save £150–£300/year. Biggest saving: the grant plus avoiding a second boiler purchase.
What if the BUS grant ends?
Without the grant, the financial case weakens significantly for gas replacements. You rely on longer lifespan and future energy price changes.
Should I get a heat pump now or wait for cheaper electricity?
The BUS grant is available now and may not continue. If your boiler is approaching end of life, acting now secures the grant. Use our calculator for your specific numbers.
Would a hybrid heat pump be a better compromise?
Hybrids do not qualify for the full BUS grant and you retain the gas standing charge. For many homes, a full heat pump with a TOU tariff is financially better.
Do heat pumps increase property value?
Evidence suggests 1–3% uplift. For a £300,000 property: £3,000–£9,000.
About Heat Pump vs Gas Costs
Whether a heat pump is cheaper than gas depends on running cost tariff, the BUS grant, system lifespan, and standing charge savings. Over 20 years, a heat pump typically saves £3,000–£8,000 compared to gas. This guide is part of our resource hub covering costs, comparisons, grants, and running costs. For combining solar with a heat pump to maximise savings, visit Home Solar Guide.