UK Energy Bill Forecaster: Gas vs Heat Pump Over 10 Years

The question is not just what a heat pump costs today versus gas — it is what both will cost over the next decade. With gas prices subject to global volatility and the government actively working to make electricity cheaper for heat pump users, the 10-year picture looks dramatically different from today's snapshot. Our energy bill forecaster uses real projections from Ofgem, DESNZ, and the Climate Change Committee to show you the true comparison.

Most heat pump vs gas boiler cost comparisons make a critical mistake: they compare today's prices as if they will stay the same forever. They will not. Energy prices are shaped by global markets, government policy, infrastructure investment, and climate commitments — and all of these factors point in the same direction: gas will get more expensive, and electricity will become more favourable for heat pump users.

This guide builds a 10-year forecast using the best available data from Ofgem, the Department for Energy Security and Net Zero (DESNZ), and the Climate Change Committee (CCC). For today's comparison, see our heat pump vs gas boiler guide.

Current Energy Prices: Where We Stand in 2026

As of Q1 2026, the Ofgem energy price cap sets the following unit rates for a typical dual-fuel household:

The critical number is the price ratio. Electricity costs 3.6 times more than gas per kWh. But a heat pump with a COP of 3.2 produces 3.2 kWh of heat for every 1 kWh of electricity it consumes. This means the effective cost of heat from a heat pump is approximately 24.5 ÷ 3.2 = 7.7p per kWh of heat — compared to gas at approximately 6.8 ÷ 0.90 (boiler efficiency) = 7.6p per kWh of heat.

At current prices, heat pumps and gas boilers cost almost exactly the same to run. The question is: what happens next?

Gas Price Forecast 2026-2036

Several structural factors point to rising UK gas prices over the next decade:

1. Declining North Sea Production

UK domestic gas production has been falling since 2000 and continues to decline. The UK is increasingly dependent on imported gas — primarily LNG from Qatar and pipeline gas from Norway — which is priced on volatile international markets. By 2035, the UK is projected to import over 70% of its gas needs.

2. Carbon Pricing

The UK Emissions Trading Scheme (UK ETS) and potential future carbon taxes on domestic heating will add to gas costs. The CCC has recommended that carbon pricing be extended to include domestic gas consumption, which would add an estimated 1-3p/kWh to the gas unit rate by 2030.

3. Global Demand Competition

As Asian economies grow, competition for LNG intensifies. The 2022 energy crisis — when wholesale gas prices quadrupled — demonstrated how vulnerable the UK is to global supply disruptions. While another crisis on that scale is not guaranteed, the structural exposure remains.

4. Network Cost Recovery

As homes switch to heat pumps, the gas network serves fewer customers — but the maintenance and safety costs remain. These fixed costs must be spread across a shrinking customer base, increasing per-unit charges. This "death spiral" effect accelerates as more homes leave the gas network.

Electricity Price Forecast 2026-2036

The electricity outlook is more complex — and more favourable for heat pump owners — than the gas picture. While wholesale electricity prices are influenced by the same global factors, several UK-specific policies are working to reduce the cost of electricity for heat pump users:

1. Renewable Energy Growth

The UK's expanding renewable capacity (particularly offshore wind) is reducing the average cost of electricity generation. By 2030, renewables are expected to generate over 80% of UK electricity, with new offshore wind contracts priced below wholesale gas generation costs.

2. Policy Cost Rebalancing

Environmental and social policy costs (green levies) currently sit on electricity bills, making electricity disproportionately expensive. The government has committed to moving these costs to general taxation or gas bills, which could reduce the electricity unit rate by 3-5p/kWh.

3. Heat Pump Tariffs

Dedicated heat pump tariffs are increasingly available, offering electricity at 15-18p/kWh during off-peak hours. As smart meter rollout completes and demand-side flexibility grows, these tariffs are expected to become more widespread and more competitive. Our guide to heat pump tariffs covers the current options.

The Price Rebalancing Agenda

The UK government has acknowledged that the current electricity-to-gas price ratio is a barrier to heat pump adoption. Several rebalancing mechanisms are under active consideration:

• Moving green levies to gas or taxation — could reduce electricity bills by 3-5p/kWh
• Carbon pricing on gas — could add 1-3p/kWh to gas bills by 2030
• Dedicated heat pump tariffs — already available from some suppliers at 15-18p/kWh
• Smart export guarantees — allowing homes with solar panels to earn money from excess generation

The combined effect of these measures could shift the electricity-to-gas price ratio from the current 3.6:1 to below 2.5:1 by 2030. With a heat pump COP of 3.0-3.5, this would make heat pumps definitively cheaper than gas to run — even on standard tariffs.

10-Year Cumulative Cost Comparison

Here is the core output of our forecaster — cumulative heating costs over 10 years for a typical UK 3-bedroom semi-detached house (12,000 kWh annual heating demand):

Over 10 years, the heat pump on a standard tariff saves approximately £3,710 compared to gas. On a heat pump tariff, the saving rises to approximately £6,590. These are conservative central estimates — the high gas price scenario shows even larger savings.

Three Forecast Scenarios

Optimistic (for Gas)

Gas prices rise slowly (2% per year), electricity stays elevated. In this scenario, the heat pump still saves money over 10 years, but the margin is smaller — approximately £1,500-£3,000 on a standard tariff.

Central

Gas prices rise at 3-4% per year, electricity falls modestly with rebalancing. Heat pump saves £3,700-£6,600 over 10 years depending on tariff choice.

Pessimistic (for Gas)

Gas price spike (repeat of 2022-style volatility) combined with rapid electricity rebalancing. Heat pump saves £6,000-£10,000+ over 10 years. This scenario highlights the risk protection that heat pumps offer against gas price volatility.

How Tariff Choice Changes the Picture

Tariff selection is one of the most powerful levers heat pump owners have. The difference between a standard electricity tariff and a dedicated heat pump or time-of-use tariff can save £200-£400 per year:

Adding Solar to the Equation

Combining a heat pump with solar panels creates a powerful synergy. Solar panels generate free electricity during daylight hours, which can power your heat pump directly — especially during spring and autumn when both solar generation and heating demand overlap.

A typical 4 kW solar system generates 3,400-3,800 kWh per year. If 30-40% of this is used to offset heat pump electricity (approximately 1,000-1,500 kWh), the annual heating cost reduction is £170-£370 depending on your tariff. Over 10 years, this adds £1,700-£3,700 to your cumulative savings.

With battery storage, even more solar energy can be shifted to heat pump use during evening and overnight hours, pushing self-consumption rates to 50-60% and further improving the economics. Read our guide on solar panel savings for a detailed breakdown.

Oil and LPG Comparisons

For homes currently heated by oil or LPG, the case for a heat pump is even stronger than for gas users:

Oil and LPG users switching to a heat pump typically see payback on their investment in 4-7 years. Electric storage heater users see even faster payback because of the enormous efficiency difference — a heat pump produces 3-3.5 kWh of heat per kWh of electricity, compared to storage heaters which produce just 1 kWh. Our value analysis covers the payback calculations in detail.

Frequently Asked Questions

Will gas prices go up or down in the next 10 years?

Most energy analysts expect UK gas prices to trend upward over the next decade due to declining North Sea production, carbon pricing, and global demand. The CCC projects 2-4% per year increases in real terms. Short-term fluctuations are unpredictable, but the structural direction is clear.

Are electricity prices expected to fall for heat pump users?

Yes. The government has committed to rebalancing electricity and gas prices. Most forecasts show the electricity-to-gas price ratio narrowing from 3.6:1 toward 2.5:1 by 2030 through a combination of policy cost shifts, carbon pricing, and dedicated heat pump tariffs.

How much cheaper is a heat pump to run than gas over 10 years?

For a typical 3-bed semi, heat pumps are projected to save £3,700-£6,600 over 10 years compared to gas, depending on tariff choice. Even under the most optimistic gas price scenario, heat pumps save at least £1,500.

What is the best electricity tariff for a heat pump?

Heat pump-specific tariffs offer electricity at 15-18p/kWh compared to the standard 24-25p/kWh. Running your heat pump primarily during off-peak hours can reduce annual costs by 20-35%. Check our running costs guide for tariff comparisons.

Does adding solar panels change the cost calculation?

Significantly. A 4kW solar system can reduce heat pump running costs by £170-£370 per year, adding £1,700-£3,700 to cumulative savings over 10 years.