Total Cost of Ownership: Heat Pump vs Gas Boiler Over 20 Years
Comparing a heat pump to a gas boiler on installation cost alone is like comparing a Tesla to a petrol car based on the sticker price. Over 20 years, a heat pump with the BUS grant costs about £40,140 in total on the standard capped electricity rate -- about £2,200 less than the gas boiler's £42,350. A heat pump tariff widens the gap.
This guide calculates the complete 20-year cost for both systems in a typical UK home. No cherry-picked figures. For installation costs alone, see our cost guide. For the broader comparison, see heat pump vs gas boiler.
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Our Baseline Assumptions
| Property | 3-bed semi, 12,000 kWh annual heat demand |
| Gas boiler efficiency | 92% |
| Heat pump seasonal COP | 3.0 |
| Gas rate | 7.97p/kWh + 29.68p/day standing charge (Ofgem cap, 1 October 2026 to 31 December 2026) |
| Electricity rate | 26.32p/kWh (Ofgem cap, standard rate) |
| Annual inflation | 3% for both fuels |
| BUS grant | £7,500 (£9,000 if replacing oil or LPG in a home without mains gas, until 31 March 2027) |
| Price basis | £ figures calculated at the October 2026 cap |
Installation Cost
The difference is just £1,300 after the grant. Without the grant, the gap is £8,800. See our full cost breakdown.
Annual Running Costs (Year 1)
Gas boiler: £1,148/year (£1,040 fuel + £108 standing charge). Heat pump: £1,053/year on the standard capped rate. With the gas supply removed, the heat pump saves about £95 a year; if you keep gas for cooking (and so keep the standing charge), the heat pump costs about £13 a year more at SCOP 3.0 against a 92% boiler. A higher SCOP or a heat pump tariff tips it further in the heat pump's favour. See our running costs guide.
Maintenance and Replacement
Gas boiler: £175/year average, plus replacement at year 13 (~£4,800). Heat pump: £155/year average, potential compressor replacement at year 18 (~£4,250). Fewer moving parts and no combustion components give heat pumps a slight maintenance edge.
The 20-Year Total Cost Comparison
With the grant, the heat pump saves about £2,200 over 20 years on the standard capped rate (installation, energy with 3% annual inflation, maintenance and one replacement each). A heat pump tariff increases the saving; check the supplier's current rates. Without the grant, the gas boiler is cheaper. This is why the BUS grant matters so much.
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What Could Change the Numbers
Energy price rebalancing: If electricity levies shift to gas bills, the heat pump saves an additional ~£510 per year. Gas boiler ban effect: From 2035, maintenance costs may rise. Carbon pricing: Even a modest £50/tonne CO2 adds ~£100/year to gas bills.
Properties with solar panels can further reduce the heat pump's electricity costs, widening the gap in the heat pump's favour.
For a broader assessment beyond pure cost, our are heat pumps worth it guide covers the full picture. Use our suitability checker to confirm your home is suitable.
Frequently Asked Questions
Is a heat pump cheaper than a gas boiler over 20 years?
With the BUS grant and the standard capped rate, the heat pump is about £2,200 cheaper over 20 years in our example. A heat pump tariff increases the saving. Without the grant, gas is cheaper.
How long does it take for a heat pump to pay for itself?
From gas, roughly 10-12 years on the standard capped rate in our example, faster on a heat pump tariff. From oil, much quicker at current oil prices, and off-gas homes replacing oil or LPG get a £9,000 grant (until 31 March 2027). For LPG, it depends on your delivery price.
What if energy prices change dramatically?
If electricity gets cheaper relative to gas (as intended), the heat pump wins decisively.
Should I wait for heat pump prices to drop?
Acting while the £7,500 grant is available is usually financially sensible. Funding is confirmed to 2029/30, but grant levels can change.
What about hydrogen boilers?
No UK hydrogen grid exists. Basing a 20-year decision on hydrogen availability would be speculative.
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About this guide: This article provides a comprehensive 20-year cost comparison between heat pumps and gas boilers. For most UK homes, the BUS grant makes a heat pump cost-competitive over its lifetime. Combining with solar panels further tilts the economics in the heat pump's favour by reducing electricity costs.