Will an Air Source Heat Pump Be Cheaper to Run Than Gas in 2026?

What to know first

This summary explains the July 2026 break-even point and the factors most likely to move it.

Cost is a leading concern for households considering low-carbon technology. Ofgem’s 2025 consumer survey found that cost remained the main barrier among people unlikely to adopt heat pumps, electric vehicles or solar panels. That finding covers purchase, installation and use together.

For current Great Britain price-cap customers, an air-to-water heat pump at SPF 3.1 is slightly cheaper than an 85%-efficient boiler on this simplified space-heating fuel-cost test. Whole-home bills can still be higher against a particularly efficient boiler, on an expensive electricity tariff or with a weak system design.

So, is a heat pump cheaper than gas now?

Potentially, but only by a small margin in the central comparison.

From 1 July to 30 September 2026, Ofgem’s average Direct Debit price-cap rates are 26.11p per kilowatt-hour (kWh) for electricity and 7.33p/kWh for gas, including 5% VAT. Regional rates and prices for standard credit or prepayment customers can differ.

From April to June 2026, the averages were 24.67p for electricity and 5.74p for gas. For an 85%-efficient boiler, that meant a break-even heat-pump SPF of about 3.65. The July rates bring it down to about 3.03 because the gas unit rate rose much more than the electricity rate.

Ofgem states in its 2026 price-cap guidance:

The cap limits unit rates and standing charges on default tariffs; it does not cap the total bill. Ofgem is due to publish the October-to-December 2026 level by 26 August 2026, so this calculation is date-bound.

Good to know

These Ofgem rates cover England, Scotland and Wales. Northern Ireland has a separate regulated market, so households there need local tariffs for the same calculation.

How the 2026 break-even calculation works

Seasonal performance factor, or SPF, is the heat a heat-pump system delivers for each unit of electricity it uses over a season, normally a year. An SPF of 3 means three kWh of heat for every one kWh of electricity.

Gas-boiler efficiency measures how much useful heat reaches the home from the gas bought. At 85% efficiency, 15% is not delivered as useful heat. Energy Saving Trust uses approximately 85% as a reference point for a typical new boiler in use.

Heat-pump cost per kWh of heat = electricity price ÷ SPF

Gas cost per kWh of heat = gas price ÷ boiler efficiency

At break-even:

SPF = electricity price × boiler efficiency ÷ gas price

This table uses Ofgem’s July-to-September 2026 average rates and excludes standing charges.

The figures are Clearwise calculations rounded to two decimal places. Energy Saving Trust describes about 85% as typical for a new gas boiler in use and about 75% for an older boiler due for replacement. It also says an A-rated boiler should convert about 90% of its fuel into useful heat. Actual performance depends on the boiler and how the system operates.

Expert insight

“At the present cap rates, an SPF around 3.0 is the pivot against a typical new boiler. It is not a universal target: compare each quote’s MCS estimate with your tariff and existing boiler.”

Giles Crosse

Energy Editor

Experienced editor, journalist and communications consultant specialising in consumer energy and low carbon technologies.

• Editor and campaign author for Shell, EDF Energy and Good Energy.
• Consultant to the United Nations and contributor to the World Economic Forum.
• Journalist for Reuters, the BBC, The Economist and The Guardian.

More about Giles Crosse

What would 10,000 kWh of space heat cost?

Assume a home needs 10,000 kWh of useful space heat in a year. This is an illustration, not a property estimate.

• A heat pump at SPF 3.1 would use about 3,226 kWh of electricity and cost about £842.

• An 85%-efficient gas boiler would use about 11,765 kWh of gas and cost about £862.

• A 90%-efficient gas boiler would cost about £814.

These calculations use the July-to-September 2026 Ofgem average Direct Debit unit rates and exclude standing charges.

The heat pump is about £20 cheaper than the 85% boiler, but about £28 more than the 90% boiler, before standing charges.

The average gas standing charge is 29.04p a day, or roughly £106 when annualised at that rate. A household that removes all gas appliances and closes its gas account may avoid it. Keeping gas for another appliance means it remains payable.

Why your tariff can change the answer

Holding gas at 7.33p/kWh and boiler efficiency at 85%, an illustrative electricity rate of 20p/kWh lowers the break-even SPF to 2.32. At 30p/kWh, it rises to 3.48. These are calculations rather than quoted tariff offers.

Time-of-use and specialist heat-pump tariffs can offer cheaper electricity at certain times. Energy Saving Trust’s 2026 modelling found tariff choice was a key factor in whether a heat pump saved money against gas, but outcomes depended on the home, system and tariff.

A smart tariff is not automatically cheaper. Check the average rate the heat pump is likely to pay, not only the headline off-peak price. Peak rates, cheap-hour windows and household demand all matter.

Why the home and system design matter

A well-designed system can deliver the required heat at a lower water temperature. This flow temperature is the temperature of water moving from the heat pump through radiators or underfloor heating. Lower flow temperatures generally improve efficiency.

A room-by-room heat-loss calculation shows how much heat each part of the home needs on a cold day. It helps the installer size the heat pump and radiators so the home stays comfortable without unnecessarily high flow temperatures. Larger radiators or other upgrades may be needed.

Insulation mainly reduces the heat the home needs and can make a lower-temperature design easier. Weather compensation changes flow temperature as outdoor conditions change, helping the system run steadily.

Hot water needs separate attention. The current Microgeneration Certification Scheme, or MCS, method calculates space-heating electricity using the estimated SPF. It models air-source hot-water production separately at a factor of 1.9 and adds any immersion-heater use. A headline space-heating SPF can therefore overstate whole-home savings when hot-water demand is high.

MCS warns in its 5 December 2025 standard:

What to check before signing a quote

Energy Saving Trust’s July 2026 estimate puts a typical air source heat-pump installation at around £12,000. Quotes vary with property size, capacity and work to radiators, pipework, the hot-water cylinder or electrics.

Funding affects upfront cost, not the running-cost calculation. In England and Wales, the Boiler Upgrade Scheme offers £7,500 towards an air-to-water heat pump. From 21 July 2026 to 31 March 2027, eligible properties heated by oil or LPG and without a mains-gas connection can receive £9,000. Scotland has separate Home Energy Scotland support, including grant funding of up to £7,500 for qualifying heat-pump installations. Northern Ireland households should check NI Energy Advice for available support.

Before entering a contract:

1. Check your own prices. Find the electricity and gas unit rates, payment method and standing charges on a recent bill.

2. Ask for the design evidence. The installer should explain the room-by-room heat loss, flow temperature and any radiator, cylinder, pipework or electrical work.

3. Compare the full performance estimate. MCS requires a pre-sale estimate before the contract is awarded. Check annual electricity, space-heating SPF, hot-water assumptions and immersion use.

4. Check the installer and contract. Boiler Upgrade Scheme work must use an MCS-certified installer. Participating consumer installers must also belong to an approved consumer code. Ofgem cannot confirm eligibility before the installer submits a full application.

Key takeaways

• The July-to-September 2026 break-even SPF is about 3.03 against an 85%-efficient gas boiler.

• An SPF of 3.1 gives only a small fuel-cost advantage in that comparison.

• A 90%-efficient boiler raises the break-even SPF to about 3.21.

• A lower electricity tariff or removal of the gas standing charge can improve the result.

• High flow temperatures, weak design and hot-water or immersion demand can remove a saving.

• Use the MCS estimate and your own tariff rather than a national average alone.

Frequently asked questions