Variable Rate Tariff vs Fixed Rate for Heat Pumps
Variable time-of-use tariffs usually save heat pump owners more than a flat fixed deal, if they can schedule their heating. The trade-off is price certainty versus maximum savings. For most heat pump owners, the variable route wins — but there are valid reasons to choose fixed.
Calculate your costs on different tariff types
Use Our Free CalculatorCompare variable vs fixed for your property
The Key Differences
| Feature | Variable (e.g., Octopus Cosy) | Fixed (e.g., 12-month deal) |
|---|---|---|
| Rate changes | Can change quarterly | Locked for contract term |
| Off-peak rates | Yes — Cosy: 51% below the regional day rate | No — flat rate all day |
| Exit fees | None | £25-50 per fuel |
| Price protection | Ofgem cap limits standard rate | Rate guaranteed for term |
| Illustrative annual cost (4,000 kWh) | ~£731 (Cosy-style, 60% in cheap windows) | Depends on the fixed rate (£1,053 at the 26.32p price cap rate) |
Illustration using the October 2026 price cap rate as the day rate. Fixed deals and Cosy rates vary by region and change often: check the supplier's current rates. Last reviewed October 2026.
Which Is Better for Heat Pumps?
For most heat pump owners, a variable time-of-use tariff like Octopus Cosy delivers the lowest costs because it offers off-peak rates that fixed tariffs cannot match. The ability to shift 60%+ of heat pump electricity into cheap windows creates savings that no flat fixed rate can compete with.
The key question is whether you can actually schedule your heating around off-peak windows. If you can, go variable. If you cannot or will not, a competitive fixed rate gives price certainty with zero scheduling effort (note that Scottish Power's Heat Pump Saver is not currently available).
When Fixed Makes Sense
- Poor insulation: If your home cannot hold heat between off-peak windows, variable peak rates eat into savings
- Budget certainty: If you need predictable monthly bills for financial planning
- Rising market: If you believe wholesale prices will rise significantly, locking in a competitive rate protects you
- No scheduling willingness: If you will not adjust your heating schedule, a competitive fixed rate is simpler
See our full tariff guide and comparison table for all options.
Get expert tariff advice with your installation
Request a heat pump quoteAnswer a few questions about your home and request a quote.
Calculate your heat pump costs on different tariffs
Try the Free CalculatorCompare variable vs fixed for your specific usage pattern
Frequently Asked Questions
Is variable or fixed better for heat pump owners?
Variable time-of-use tariffs deliver the lowest costs for most heat pump owners because of cheap off-peak rates. Fixed tariffs provide certainty but usually cost more if you could have shifted usage to cheap windows.
Can I switch from fixed to variable without penalty?
Fixed tariffs typically have exit fees (£25-50). Variable tariffs have no exit fees. Check your contract terms before switching.
What if electricity prices rise on a variable tariff?
The Ofgem cap limits standard rates. Off-peak rates on dedicated heat pump tariffs have historically remained well below cap. See our electricity price rise guide for more detail.
Is there a fixed-rate heat pump tariff?
Scottish Power's Heat Pump Saver is not currently available and OVO's Heat Pump Plus closed on 1 February 2026, so most fixed options are ordinary fixed-rate electricity deals. Check each supplier's current rates and exit fees before fixing.
Tariff Strategy for Heat Pump Owners
The variable vs fixed decision is one part of a broader cost optimisation strategy. Combined with insulation, solar panels, and the Boiler Upgrade Scheme, the right tariff choice helps make heat pump running costs competitive with or below gas heating — the tipping point for mainstream adoption of heat pump systems.