Heat pumps run on electricity, so your tariff has a big effect on running costs. A heat pump tariff in the UK, with cheaper rates at the times your heat pump works hardest, can cut what you pay by a third or more compared with a standard variable tariff. This comparison explains the options and how to choose.
Heat pump tariff comparison: the main types
| Tariff type | How it works | Best for | Watch out for |
|---|---|---|---|
| Heat pump-specific | Cheaper rates in several windows each day, designed around how heat pumps run | Most heat pump homes | A pricier peak window, usually late afternoon |
| Time-of-use (overnight) | One cheap overnight period | Heating hot water and charging batteries or EVs | Higher daytime rates while the heating runs |
| Agile / dynamic | Price changes every half hour with the wholesale market | Homes with smart controls and a battery | Price spikes during cold, calm spells |
| Fixed tariff | One rate locked for 12 months or more | Budget certainty | Exit fees if you leave early |
| Standard variable tariff | One price all day, set by the price cap | Simplicity | Usually the most expensive way to power your heat pump |
Examples available in the UK
- Cosy Octopus (Octopus Energy): cheaper rates in several daily windows, aimed specifically at heat pump owners.
- E.ON Next Pumped: a tariff for customers with a heat pump, with a discounted rate for heating.
- Other suppliers offer time-of-use tariffs or heat pump bolt-ons that can work just as well.
Rates, eligibility and exit fees change regularly, so always check the supplier's current terms before switching.
What to compare
- Average unit rate across the hours your heat pump runs, not just the cheapest window.
- Standing charge, which you pay daily regardless of use.
- Peak rate: some tariffs charge more at peak times; avoid running then if you can.
- Contract length and exit fee: a 12-month fix may charge to leave early.
- Export rate, if you also have solar panels.
- Eligibility: some tariffs require a smart meter, a particular heat pump brand or an MCS certificate.
How much could you save?
| Tariff | Average rate | Approx. cost per day | Approx. cost per year |
|---|---|---|---|
| Standard variable tariff | 25p/kWh | £2.36 | £860 |
| Heat pump-specific tariff | 15p/kWh | £1.41 | £515 |
Three-bed home using about 3,430 kWh of electricity a year to power its heat pump. See typical heat pump heating costs per day.
How to switch
- Make sure you have a working smart meter; your supplier can fit one free.
- Check your current contract for an exit fee.
- Compare two or three options using your own usage figures from your heat pump's app.
- Switch online; it usually takes a couple of weeks.
Is it worth switching?
For most heat pump owners, yes. A heat pump uses a lot of electricity compared with other appliances, typically 3,000 to 5,000 kWh a year, so even a few pence off the unit rate adds up to hundreds of pounds. The exceptions are homes that use very little heat, or where most use falls in a tariff's peak window. If you work from home and need heating through the late afternoon peak, compare the peak rate carefully.
Heat pump tariff vs Economy 7
Economy 7 gives seven hours of cheaper electricity overnight, but daytime rates are usually higher than a standard variable tariff. That suits storage heaters, which charge overnight, but not heat pumps, which run through the day. A dedicated tariff for heat pumps, or a time-of-use tariff with several cheap windows, normally works out cheaper. If you're switching from storage heaters to a heat pump, it's worth moving off Economy 7 at the same time.
How heat pump tariffs work
A smart meter records your electricity use every half hour, so a supplier can charge different prices at different times. Heat pump tariffs use this to offer cheaper rates during several windows each day, usually overnight, in the early afternoon and late evening, and a higher rate during the late-afternoon peak, when demand on the grid is highest.
Heat pumps suit this pattern well. Your home holds warmth for hours, and the hot water cylinder stores heat, so the heat pump can do most of its work in the cheap windows and coast through the expensive ones. With a few schedule settings, many households run 70 to 80% of their heat pump's electricity through the cheaper rates.
Worked examples: savings by home size
Here's what moving from a 25p/kWh standard variable tariff to a heat pump tariff averaging 15p/kWh could mean for different homes:
| Home | Heat pump electricity per year | Standard variable tariff | Heat pump tariff | Yearly saving |
|---|---|---|---|---|
| 2 bed flat or terrace | ~2,000 kWh | £500 | £300 | ~£200 |
| 3 bed semi | ~3,430 kWh | £857 | £514 | ~£343 |
| 4 bed detached | ~5,000 kWh | £1,250 | £750 | ~£500 |
Figures exclude standing charges and assume most use falls in the cheaper windows. Your heat pump's app shows your real usage, which is the best starting point for any comparison.
Checklist before you switch
- Do you have a working smart meter sending half-hourly readings?
- What is the average rate across the hours your heat pump actually runs?
- How high is the peak rate, and how many hours a day does it apply?
- Is there an exit fee on your current deal, and on the new one?
- Does the tariff require a particular heat pump brand, an MCS certificate or a minimum contract?
- If you have solar panels, what export rate does it pay?
Common mistakes to avoid
- Comparing only the cheapest rate. A very low overnight rate is no use if your heating runs mostly in the day.
- Forgetting the standing charge. It can outweigh a small difference in unit rates.
- Leaving default schedules. Set the hot water to heat in a cheap window, or you'll miss much of the saving.
- Turning the heating off at peak times. Let the house coast instead; reheating from cold uses more energy.
Heat pump tariffs with solar panels and batteries
If you have solar panels, your heat pump can run on free daytime electricity, especially for hot water in spring and summer. Add a home battery and you can store cheap off-peak electricity and use it during the peak window. Some tariffs also pay a higher export rate for solar power you send to the grid. When you compare tariffs, look at import and export rates together, because the best combination depends on how much solar you generate and when you use it.
Does the tariff affect my heat pump warranty or grant?
No. Your choice of electricity tariff has no effect on the Boiler Upgrade Scheme grant or on your manufacturer's warranty. Some heat pump tariffs do require proof that your system is MCS-certified, which your installer provides at handover. You can switch tariffs at any time, subject to any exit fee on your current deal.
Get the most from a cheaper tariff
- Schedule hot water heating in the cheapest window.
- Let the heat pump run steadily, slightly warmer before a peak period.
- Use the manufacturer's app to check daily energy use.
- Pair with solar panels and a battery for the lowest running costs.
Sources
Grant amounts, VAT rules and eligibility are set by government and the scheme administrators. We check them against these primary sources:
New to the jargon? See the heat pump glossary, or browse the heat pump FAQs.
Written by the GetASHP team. Prices and grant details checked 27 October 2026; always confirm current figures with your installer.
