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air source heat pump

How to Estimate Heat Pump Running Costs Before You Buy

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Estimate a heat pump’s annual electricity cost with two figures: the useful heat your home needs each year and the system’s seasonal performance factor (SPF or SCoP). Divide annual useful heat demand by the seasonal figure, then multiply by your electricity unit rate. Keep standing charges, any gas you continue to use, hot water, installation and finance outside that core calculation so the result answers the right question.

The calculation in one line

Estimated annual heat-pump electricity use (kWh) = annual useful heat demand (kWh) ÷ seasonal performance factor.

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Estimated annual running cost = estimated heat-pump electricity use × electricity unit rate.

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This is an operating-cost estimate, not a quote or a guarantee. The result is only as good as the heat-demand figure, the seasonal efficiency assumption and the tariff used. A heat pump’s published coefficient of performance (CoP) at one test condition is not an annual forecast; use an SPF or SCoP that represents seasonal operation. Energy Saving Trust explains the difference between point-in-time CoP and seasonal measures.

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For a fair comparison, calculate the existing system’s cost from its actual fuel use and efficiency, and say whether both figures include domestic hot water (DHW) or space heating only.

What you need before you calculate

1. Annual useful heat demand

Heat demand is the amount of heat the building must receive, in kilowatt-hours per year. It is not automatically the same as the electricity or gas shown on your bill. You can start with:

  • An EPC or other modelled energy assessment, noting that it is a benchmark rather than a meter reading.
  • Past fuel consumption, converted into useful heat using a stated estimate of the existing appliance’s efficiency.
  • A room-by-room heat-loss assessment prepared for the property and proposed design conditions.

A bedroom-count or house-type benchmark is useful for screening, but it can miss extensions, high ceilings, draughts, insulation defects, occupancy patterns and the local climate. A construction professional or heat-pump designer should be able to show the assumptions behind a property-specific heat-loss calculation.

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2. A seasonal performance figure

Ask for the assumed SPF or SCoP, not simply a maximum CoP from a product datasheet. Clarify whether the figure includes space heating only, DHW, immersion-heater use, defrost cycles, pumps and controls. Two proposals can use the same heat-demand estimate but predict different electricity consumption because their seasonal assumptions differ.

3. Your electricity unit rate

Use the unit rate on your current bill for a baseline, expressed in pounds per kilowatt-hour. Then model any tariff you can genuinely obtain as a separate scenario. Rates, discounts and eligibility change; do not present a tariff as permanent. Citizens Advice notes that heat-pump households may consider tariffs designed for higher electricity use, and some offers require a smart meter.

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4. Standing charges and energy you will still buy

Unit rates pay for each kilowatt-hour; standing charges are daily charges for keeping a supply. Ofgem distinguishes the two. If you retain gas for cooking, a fire or another appliance, you will not save the whole gas standing charge. Report the heat-pump electricity cost separately from the household’s total bill change whenever possible.

5. Domestic hot water demand

Include DHW if the heat pump will heat your cylinder. State whether the demand is measured, modelled or a default share. DHW often uses a different efficiency assumption from space heating because the system must reach a higher water temperature. A calculator that applies one overall SPF without identifying its DHW treatment can give a misleadingly precise answer.

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Step-by-step: make your own estimate

  1. Choose the scope. Decide whether you are estimating space heating alone or space heating plus DHW. Write this at the top of the worksheet.
  2. Enter annual useful heat demand. Use a heat-loss assessment where available. If you use fuel history, record the period, weather or occupancy changes and the efficiency assumption used to turn fuel into useful heat.
  3. Select a seasonal performance assumption. Request the designer’s SPF or SCoP and its boundaries. If you are screening options before obtaining a design, run a range rather than one number.
  4. Divide demand by seasonal performance. For example, an illustrative home needing 15,000 kWh of useful heat and a proposed SPF of 2.8 would need about 5,357 kWh of heat-pump electricity (15,000 ÷ 2.8). This is a worked example, not a prediction for your property.
  5. Multiply by the electricity rate. At an illustrative rate of £0.28 per kWh, 5,357 kWh would cost about £1,500 for the heat-pump electricity (5,357 × £0.28). Replace both illustrative values with your own.
  6. Add or separate fixed charges. Show electricity standing charges in the household bill, not as heat-pump consumption. If abandoning gas removes a supply, model that change separately; if gas remains, retain the relevant standing charge.
  7. Run sensitivities. Recalculate with lower and higher heat demand, SPF and tariff values. A range shows how exposed the result is to design and price assumptions.

Do not allocate the entire electricity bill to heating when the same meter also supplies lighting, appliances and other loads. Estimate the heat-pump share from its calculated consumption or a dedicated meter where available.

How to compare the result with a boiler or other heater

Use the same useful heat demand for every option. For an existing boiler, estimate useful heat as fuel consumption multiplied by an explicitly stated efficiency assumption. Then calculate the fuel cost from the actual fuel unit rate. If you are comparing with a hypothetical new boiler, label that separately: it answers a different question from “what will replacing my current boiler do?”

Item Heat-pump estimate Existing boiler or heater estimate
Useful heat demand Same annual kWh demand used for the comparison Same annual kWh demand
Energy input Useful heat ÷ SPF or SCoP Useful heat ÷ stated appliance efficiency, or actual fuel history reconciled to useful heat
Unit price Electricity rate on the chosen tariff Gas, oil or other fuel rate actually paid
Fixed charges Electricity standing charge; separate from heating use Gas or other supply standing charge, retained or removed according to the scenario
DHW Include the heat pump’s DHW demand and efficiency treatment Include the boiler or heater’s DHW fuel use on the same basis
Capital cost Not part of running cost Not part of running cost

A current fuel bill can be a useful reality check, but it may include cooking, DHW, standing charges or inefficient operation that will not transfer directly to the new system. Identify those components before claiming a saving.

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Worked comparison with transparent assumptions

Suppose a household’s assessment gives 15,000 kWh of annual useful heat including DHW. A proposal assumes an SPF of 2.8. The heat pump therefore uses about 5,357 kWh of electricity. At £0.28 per kWh, the variable heat-pump cost is about £1,500 per year.

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For comparison, suppose the existing gas system uses 17,647 kWh of gas and the worksheet assumes 85% efficiency. That produces approximately 15,000 kWh of useful heat (17,647 × 0.85). At an illustrative gas rate of £0.07 per kWh, the variable gas cost is about £1,235. The difference in this deliberately simplified example is not a verdict: it excludes standing charges, any retained gas use, tariff changes, maintenance, capital cost and uncertainty in the 85% assumption. Its purpose is to show why you must put the same useful heat demand and clearly labelled rates into both sides.

The Energy.org.uk calculator uses this type of comparison. It asks for heat demand, heat-pump efficiency, current-system efficiency and electricity and gas rates, and provides a DHW share input. It displays a default heat-pump efficiency of about 2.8 and a default current-system efficiency of 85%; those are calculator assumptions, not guaranteed results for an individual home. Its method says installation costs are excluded and standing charges are excluded unless the gas supply is no longer needed. The page records its method as checked on 2 October 2026. See the calculator and its stated method.

Use online tools for screening, not final design

GOV.UK suitability service

The GOV.UK “Check if a heat pump could be suitable for you” service is a quick first comparison. It asks for limited details such as UK nation, current heating type and bedroom count. The DESNZ transparency record says it compares benchmarked current fuel use with estimated heat-pump electricity use and is intended as an early-stage assessment. It is not a substitute for a heat-loss survey, system design or installer quotation.

Energy.org.uk calculator

This calculator exposes more of the arithmetic, allowing you to enter annual heat demand and energy rates and identify a DHW share. Use its defaults only as placeholders while screening. Replace them with figures from your property and the written design assumptions before making a purchase decision.

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Why two credible proposals can predict different bills

Building fabric and heat loss

Insulation levels, air leakage, windows, extensions and internal temperatures change the heat load. Improving the fabric can reduce required heat, but do not assume that a generic insulation package will deliver a particular bill reduction without a calculation.

Emitter and flow-temperature design

Radiators, underfloor circuits, pipework, buffer arrangements and cylinder sizing influence the flow temperatures the heat pump must achieve. Higher required temperatures generally make the seasonal efficiency assumption less favourable. Ask the designer to identify radiator, pipework, cylinder and electrical work rather than hiding it in a single headline figure.

Operating pattern and controls

Setback temperatures, weather compensation, thermostat strategy and how long the system runs affect demand and seasonal performance. A design based on continuous low-temperature operation should not be compared with a quote assuming intermittent high-temperature recovery without adjusting the assumptions.

Solar generation and self-consumption

Solar electricity can reduce grid purchases when generation coincides with heat-pump operation, but it does not change the heat demand. State whether the estimate is gross electricity use or expected grid electricity after self-consumption and export.

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Tariff and retained services

A time-of-use tariff may alter the cost of electricity used at different times, while a household that keeps gas for cooking still pays gas-related charges. Model the tariff you can actually obtain and show the period to which the rate applies.

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Compare written proposals on the same basis

When you have two or more designs, give each provider the same heat-demand and tariff inputs, then record what differs.

Comparison item Questions to ask
Heat demand What annual space-heating and DHW kWh did you assume? Was it based on a room-by-room heat-loss assessment?
Seasonal performance What SPF or SCoP is expected, and does it include DHW, immersion use, pumps, controls and defrosting?
Electricity use How many kWh per year does the design predict at the stated demand?
Tariff Which unit rate, standing charge and tariff conditions were used, and for what date or term?
System scope Are radiators, pipework, cylinder, controls, electrical upgrades, commissioning and removal of the old system included?
Hot water Is DHW included, and what demand and efficiency assumption were used?
Price categories Are product, installation, taxes, grant assumptions, finance, maintenance and running costs shown separately?
Baseline Is the saving compared with your actual current system or a hypothetical new replacement?

Keep the assumptions sheet with the quote. If a provider gives only a headline annual saving, ask for the heat demand, seasonal figure, tariff and scope that produced it.

What “running cost” does not include

Running cost normally means the energy needed to operate the system. It is not the purchase price, installation labour, design fees, financing, grants, maintenance, repairs, replacement parts or lifecycle cost. Ask for each category separately. A lower annual energy figure can still have a different payback once capital and finance are included; that is a separate calculation.

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Grants and support can change, and energy prices and inflation can change the future bill. Treat any forecast as conditional on its stated assumptions, not as a promise of savings.

Common estimation mistakes and how to correct them

  • Using a single CoP as an annual result: replace it with an SPF or SCoP and document what it covers.
  • Starting with the wrong demand: use measured fuel history reconciled to efficiency or a property-specific heat-loss assessment instead of bedroom-count averages alone.
  • Mixing scopes: include DHW on both sides, or exclude it on both sides, and label the choice.
  • Using a promotional or old tariff: enter the current bill rate, then show any alternative tariff as a dated scenario.
  • Counting the whole gas saving: retain gas standing charges and other gas uses if the supply remains.
  • Assigning the whole electricity bill to heating: calculate the heat pump’s kWh separately from appliances and lighting.
  • Comparing unlike baselines: distinguish replacing your current boiler from choosing a new boiler instead of a heat pump.
  • Hiding installation work: require itemised radiator, pipework, cylinder and electrical allowances.
  • Treating a calculator as a design: use online tools to screen options, then obtain a heat-loss assessment and written design.
  • Assuming solar eliminates operating cost: account for timing, self-consumption and imported electricity.

Questions to put in writing before you sign

The Competition and Markets Authority recommends comparing accredited businesses and obtaining at least three quotes or assessments. Its consumer guide says a written quote should make product and installation prices clear, identify the work and products supplied, show taxes, state whether grants are included and identify potential ongoing costs. Read the CMA consumer guide.

  • What annual space-heating and DHW demand did you assume?
  • What SPF or SCoP is used, and what equipment and usage does it include?
  • Which electricity unit rate, standing charge and tariff conditions were used, and on what date?
  • Will the household keep gas, and which standing charges remain?
  • Is the comparison with the actual existing system or a hypothetical replacement?
  • Are purchase, installation, taxes, grant assumptions, financing, maintenance and running costs separate?
  • Which radiators, pipework, cylinder, controls or electrical upgrades are required?
  • Are the predicted electricity use and assumptions included in the signed quote?

Use the answers to build your own worksheet. If a provider will not disclose the assumptions behind an annual-cost claim, you cannot make a meaningful like-for-like comparison.

A practical decision rule

Proceed to a detailed design when the estimate uses your property’s heat demand, a clearly defined seasonal performance figure, your current tariff and an explicit treatment of DHW, standing charges and retained gas. Delay a purchase decision when the number relies only on a point CoP, a generic house benchmark, an unexplained “typical” saving or a tariff you cannot obtain. The arithmetic is simple; documenting the boundaries is what makes it useful.

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Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.

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