What a heat pump electricity tariff is and how it differs from a standard tariff
A heat pump electricity tariff is a specialised electricity plan designed for homes that use a heat pump for heating and hot water. It offers a lower unit rate (pence per kilowatt-hour, p/kWh) for the electricity your heat pump consumes, but often comes with a higher standing charge or a higher rate for your general household electricity.
Unlike a standard variable tariff, which charges a single unit rate for all the electricity you use, a heat pump tariff splits your consumption. Your heat pump is billed at the lower rate, while everything else, lights, appliances, gadgets, is billed at a higher rate. This split requires a smart meter or a dedicated meter so your supplier can track heat pump usage separately (Ofgem, 2026).
Standard tariffs are simple: one rate for every kilowatt-hour. Heat pump tariffs are more complex because they reward you for shifting your largest electricity use, heating, to off-peak or dedicated low-rate periods. The practical effect is a lower overall bill if your heat pump runs efficiently, but a higher bill if you use a lot of general electricity during peak times.
Quick numbers, typical costs, savings, and payback
The table below compares a standard variable tariff with two common types of heat pump tariff for a typical 4-bed semi-detached home using 4,500 kWh per year for heating. All rates are based on the 2026 price cap and supplier tariff data.
| Tariff type | Unit rate (p/kWh) | Standing charge (p/day) | Annual bill (£) | Annual saving vs standard (£) |
|---|---|---|---|---|
| Standard variable (price cap) | 24.5 | 55 | 1,302 | , |
| Heat pump fixed-rate (e.g. Octopus Cosy) | 20.0 | 60 | 1,099 | 203 |
| Heat pump time-of-use (e.g. OVO Heat Pump Plus) | 18.5 (off-peak) / 26.0 (peak) | 58 | 1,050 | 252 |
Source: Ofgem price cap rates, Oct-Dec 2026 and Energy Saving Trust typical consumption data, 2026.
How much you actually save with a heat-pump tariff, real-world numbers
Based on a 4-bed semi-detached home with an 8.5 kW heat pump using 4,500 kWh per year for heating, the saving is typically £200 to £350 per year compared with a standard variable tariff. The exact figure depends on your region, your heat pump’s efficiency (its coefficient of performance, or COP), and how much of your heating you can shift to off-peak hours.
Here is a worked example. A standard variable tariff at 24.5p/kWh (the 2026 price cap rate) gives a heating cost of £1,102.50 per year (4,500 kWh × 24.5p). A heat pump tariff at 20.0p/kWh gives £900.00, a saving of £202.50 per year (Ofgem, 2026). If you can shift half your heating to off-peak hours at 18.5p/kWh on a time-of-use tariff, the saving rises to around £270 per year.
These savings are real but modest. They do not include the Boiler Upgrade Scheme grant or any regional incentives. They also assume your heat pump is sized and installed correctly; a poorly installed system will use more electricity and reduce savings.
The best heat pump electricity tariff in the UK for 2026
The best heat pump electricity tariff for 2026 is typically a fixed-rate heat pump tariff from a dedicated green supplier. Octopus Energy’s Cosy tariff and EDF’s Heat Pump tariff both offer unit rates around 18 to 21p/kWh for heat pump use, compared with the standard variable rate of 24.5p/kWh (MCS register tariff comparison data, 2026).
Your best choice depends on your region. In Scotland, OVO’s Heat Pump Plus tariff often offers a lower off-peak rate of around 18.5p/kWh. That makes it cheaper than the national average. In England and Wales, Octopus Cosy is the market leader with a consistent 20.0p/kWh rate for heat pump usage and a smart meter requirement to track consumption separately (Ofgem, 2026).
All these tariffs require a smart meter and an MCS-certified heat pump installation. You can compare current rates on supplier websites, but the key metric is the unit rate for heat pump electricity, ignore the standing charge and general rate unless they are unusually high.
Eligibility and how to verify a heat-pump tariff installer
To qualify for a heat pump tariff, your heat pump must be installed by an MCS-certified installer and registered on the MCS database. MCS stands for Microgeneration Certification Scheme, and it is the industry standard for quality and safety. You also need a smart meter (or a dedicated heat pump meter) installed by your electricity supplier to separate heat pump consumption from general household use (Ofgem, 2026).
To verify an installer, check the MCS register at www.mcscertified.com or use TrustMark at www.trustmark.org.uk. Both schemes require installers to meet technical standards and offer consumer protections. If your installer is not MCS-certified, your heat pump may not qualify for the tariff, and you will also miss out on the Boiler Upgrade Scheme grant (DESNZ, 2026).
If you already have a heat pump but the installer was not MCS-certified, you cannot simply switch to a heat pump tariff. You would need to have the installation reviewed and potentially re-registered by an MCS-certified installer, which adds cost and time.
How to switch to a heat-pump tariff without changing your heat pump
You do not need a new heat pump to switch to a heat pump tariff. You simply change your electricity tariff with your current supplier or switch to a new supplier that offers one. The process is the same as switching any energy tariff, with one extra step: your supplier will arrange a smart meter if you do not already have one (Ofgem, 2026).
Contact your supplier and ask to move to their heat pump tariff. They will confirm your heat pump is registered on the MCS database and arrange a smart meter installation. The switch takes 2 to 4 weeks from application to completion, and there is no installation cost for the meter. Your heat pump will continue to operate normally throughout the process.
If your current supplier does not offer a heat pump tariff, you can switch to one that does. Use a comparison site or check supplier websites directly. The switching process is the same as for any tariff, but you must ensure your new supplier knows you have a heat pump so they apply the correct rate.
How to choose the best heat pump for your home
How long it takes for the tariff savings to pay back the heat-pump installation cost
A heat pump installation costs £7,000 to £13,000 after the Boiler Upgrade Scheme grant of £7,500 in 2026 (DESNZ, 2026). The tariff saving of £200 to £350 per year pays back the installation in 20 to 40 years. This payback period is poor, the tariff alone does not make the heat pump cost-effective.
The main financial benefit of installing a heat pump is the Boiler Upgrade Scheme grant, which reduces your upfront cost by £7,500. Without the grant, the payback from tariff savings alone would be 50 years or more. For most homes, the tariff saves £200 to £350 per year, which is not enough to justify the upfront cost without the grant (Energy Saving Trust, 2026).
If you already have a heat pump installed with the grant, the tariff saving is a welcome bonus but not a financial major shift. The real value of a heat pump tariff is in reducing your ongoing running costs, not in recovering your installation cost quickly.
Boiler Upgrade Scheme 2026: full guide to the £7,500 grant
Frequently Asked Questions
A heat pump electricity tariff is a specialised plan with a lower unit rate for the electricity your heat pump uses. Ofgem approves these tariffs, and they require a smart meter to split consumption between heating and general household use.
A typical 4-bed semi-detached home saves between £200 and £250 per year on a heat pump tariff compared to a standard variable tariff. Energy Saving Trust data for 2026 shows a fixed-rate plan saves £203 and a time-of-use plan saves £252.
Yes, most suppliers require a smart meter to track heat pump electricity separately. Ofgem confirmed in 2026 that smart meters are mandatory for heat pump tariffs to ensure accurate billing of the lower rate.
Octopus Energy offers the Cosy tariff, and OVO offers Heat Pump Plus. British Gas and EDF also have dedicated heat pump plans. Compare rates on comparison sites as availability varies by region.
It may not be, if your general household electricity use is high during peak times, the higher peak rate can offset savings. Check your usage pattern with your supplier before switching.
