Cheapest heat pump electricity tariff UK – August 2026 rates compared
The Ofgem price cap is £1,663 a year, taking the Standard Variable electricity rate to 26.11p/kWh. A dedicated heat-pump electricity tariff at 13–15p/kWh is the single biggest lever a heat-pump household has to cut running costs. EnergyPlus compares every UK supplier accepting new heat-pump applications, checks they will take your MCS install, and shows the rate that beats the new cap.
Weighing a heat pump against simply renewing your gas boiler? Compare gas boiler replacement costs first — the up-front gap between the two matters as much as the unit rate you pay afterwards.
- Whole-of-market comparison verified August 2026 – Octopus, E.ON Next, British Gas and EDF
- Time-of-use and flat-rate heat-pump tariffs side by side, with worked annual-cost examples
- Works for air source (ASHP), ground source (GSHP) and hybrid systems, with or without solar PV and a battery
- BUS grant £7,500 and 0% VAT battery-storage policy – what is still claimable in 2026
Quick answer: what is the cheapest heat pump electricity tariff in the UK?
As of August 2026 the cheapest flat-rate heat-pump electricity tariff is E.ON Next Heat Pump v2 at 14p/kWh, with the British Gas Heat Pump Tariff at 14.5p/kWh close behind. If your system has thermal storage and you can load-shift, Octopus Cosy at 13p/kWh in its three off-peak windows is cheaper still on a blended basis. All of these sit roughly 45–50% below the 26.11p/kWh Standard Variable rate that applies once the price cap rises.
A 4,500 kWh heat-pump home pays about £839 a year on E.ON Next Heat Pump v2 including standing charge, versus roughly £1,384 on the new Standard Variable cap rate – a saving of around £545 a year from the tariff switch alone. Heat-pump tariffs require proof of an MCS-certified install; enter your postcode below to see which are open in your region.
Why a dedicated heat-pump tariff matters more from July 2026
With the Ofgem default cap is £1,663/yr and gas unit rates jumping about 24%, the gap between the Standard Variable electricity rate (26.11p/kWh from 1 July) and a dedicated heat-pump rate (13–15p/kWh) is now the single largest controllable lever on a heat-pump heating bill. A well-configured Octopus Cosy or E.ON Next Heat Pump v2 household running a 7kW air source heat pump at a seasonal performance factor (SCOP) of about 3.2 can keep annual heating spend below £700 – worked examples are below, verified August 2026.
Crucially, only Standard Variable tariffs are hit by the July cap rise; around 40% of households on fixed deals are protected until their deal ends. EnergyPlus checks your postcode against every supplier accepting new heat-pump applications this month, confirms MCS eligibility, and shows the unit rate, standing charge, exit fee and any sign-up credit side by side before you commit.
Find the cheapest heat-pump tariff for your home
Enter your postcode and heat-pump details and we will match you against every live heat-pump tariff verified August 2026. Takes about 60 seconds.
UK heat-pump electricity tariffs – full table (verified August 2026)
Every dedicated heat-pump tariff currently open to new applications is listed below. Standing charges shown are the July 2026 average – Ofgem’s regional caps still apply, so your exact pence-per-day varies slightly by region. the typical electricity standing charge is 57.19p/day.
| Tariff | Rate structure | Unit price | Standing charge | Best for |
|---|---|---|---|---|
| Octopus Cosy | Three off-peak windows: 04–07, 13–16, 22–00 (peak 16–19) | 13p off-peak / ~28p peak | ~55p/day | ASHP with a buffer tank or thermal store to soak up off-peak windows |
| E.ON Next Heat Pump v2 | Flat single rate, dedicated (MCS only) | 14p flat | ~55p/day | Continuous-run modern ASHP – no time-of-use scheduling needed |
| British Gas Heat Pump Tariff | Flat single rate (a separate Heat Power ToU option also exists) | 14.5p flat | ~56p/day | Existing British Gas customers adding a heat pump |
| EDF Heat Pump Tracker | Time-of-use: ~10p/kWh below your regional day rate, 04–07 & 13–16 | ~16p blended (region-dependent) | ~57p/day | Households that can shift heating and hot water into the discount windows |
All four tariffs require MCS-certified installation evidence at sign-up and none charge an exit fee in their August 2026 terms; standing-charge variation by region is about ±4p/day. Note: OVO Heat Pump Plus, which previously offered an effective 15p/kWh, closed to new customers on 1 February 2026 and is no longer a switching option – existing OVO customers now pay the standard variable rate on heat-pump usage, so it is worth comparing the four tariffs above.
Flat-rate versus time-of-use – which suits your heat pump?
Flat-rate tariffs (E.ON Next, British Gas)
The simplest model – one price all day and all night. You do not have to schedule the heat pump or worry about cold mornings drawing peak power. This is the sensible choice if your installer set the system to run continuously at low flow temperatures (weather-compensated modulation), which is the recommended operating mode for most modern modulating air source heat pumps.
Time-of-use (Octopus Cosy, EDF Heat Pump Tracker)
13p across three off-peak windows totalling nine hours on Cosy – but around 28p in the 16:00–19:00 peak. Worth it if you have a buffer tank, hot-water cylinder, or the discipline to schedule heating around the windows. Households with the right thermal storage routinely reach a blended effective rate of 14–16p/kWh. EDF’s tracker works similarly, discounting two daily windows against your regional rate.
Worked annual running costs (verified August 2026)
Typical heat-pump homes draw 3,500 kWh (a well-insulated 2-bed) up to 6,000 kWh (a 4-bed detached with older fabric) for heating plus around 1,000 kWh for hot water. The snapshot below shows indicative annual electricity spend by tariff at 4,500 kWh – the most common 3-bed semi figure – using the July 2026 cap rate of 26.11p/kWh and a 57.19p/day standing charge for the Standard Variable comparison.
| Tariff | Unit cost basis | Annual unit spend | Plus standing charge | Total annual |
|---|---|---|---|---|
| Standard Variable (cap) | 26.11p flat | £1,175 | £209 | £1,384 |
| Octopus Cosy (blended 15p) | 15p blended | £675 | £201 | £876 |
| E.ON Next Heat Pump v2 | 14p flat | £630 | £201 | £831 |
| British Gas Heat Pump Tariff | 14.5p flat | £653 | £204 | £857 |
| EDF Heat Pump Tracker (blended) | ~16p blended | £720 | £208 | £928 |
Switching from the new Standard Variable cap rate to E.ON Next Heat Pump v2 at 4,500 kWh saves about £545 a year – enough to fund the heat pump’s annual service with change to spare. Octopus Cosy households who load-shift well report around £500 of savings against the July cap (verified August 2026). Your figure depends on your seasonal performance factor (SCOP), how well your home holds heat, and how much you can shift into off-peak windows.
BUS grant and battery VAT – policy backdrop August 2026
BUS grant £7,500
The Boiler Upgrade Scheme grant of £7,500 toward an MCS air source heat pump install remains live across England and Wales for all of 2026. The Scottish equivalent (Home Energy Scotland grant plus an interest-free loan) runs in parallel. The grant is paid to your installer and does not tie you to any energy supplier.
0% VAT on battery storage
Domestic battery storage installed alongside – or retrofitted to – a heat pump or solar array attracts 0% VAT through 2026. HM Treasury confirmed the relief continues, so pairing storage with a heat-pump tariff stays tax-efficient.
SCOP disclosure
MCS reform from April 2026 requires installers to publish the modelled Seasonal Coefficient of Performance (SCOP) – making like-for-like running-cost comparison far more accurate when paired with the tariff table above.
Switching to a heat-pump tariff – the four steps
- Confirm your MCS install certificate is to hand (a digital PDF or installer reference) – every supplier will request it.
- Read your meter – ideally both day and night readings if you are on Economy 7 – so the new supplier takes over without an estimate. If the cap rise is imminent, take a reading on 30 June so the cheaper cap covers usage up to that date.
- Use the comparison form above. We confirm which tariffs are open in your postcode this month and present a side-by-side of unit rate, standing charge and any introductory credit.
- Apply online; the switch completes within five working days under the Faster Switch Guarantee. You stay on supply throughout – there is no engineer visit, just a meter handover.
Frequently asked questions – heat-pump tariffs (August 2026)
What is the cheapest heat pump electricity tariff in the UK right now?
For flat-rate simplicity, E.ON Next Heat Pump v2 at 14p/kWh is the cheapest single-rate option live in August 2026, with British Gas at 14.5p just behind. For households that can load-shift, Octopus Cosy’s 13p off-peak rate across three windows beats it on a blended basis. All sit well below the 26.11p Standard Variable rate that applies. Run your postcode through the comparison form to confirm which is open in your region.
Do I have to have an MCS-certified heat pump to access these tariffs?
Yes. All four dedicated heat-pump tariffs require MCS install evidence at sign-up. If your heat pump was installed before MCS was mandatory or by a non-MCS installer, you can still move to a cheap fixed tariff to beat the rising cap – use the comparison form and select ‘no MCS’ to filter.
Why do heat pump households need a smart or time-of-use tariff?
A heat pump turns electricity into roughly three units of heat, so almost all of a heat-pump home’s bill is electricity. Paying the 26.11p Standard Variable rate on that volume is expensive; a dedicated tariff at 13–15p – or a time-of-use tariff that lets you heat during cheap windows – cuts the controllable part of the bill by close to half. That is why a heat-pump-specific tariff matters far more than it does for a gas-heated home.
Does the current cap rise affect my heat pump tariff?
Only if you are on the Standard Variable (price-capped) tariff – that rises to a 26.11p/kWh electricity unit rate and a 57.19p/day standing charge. The dedicated heat-pump tariffs in the table are fixed deals, so they are protected from the cap rise until each deal ends. Around 40% of households on fixed deals are unaffected.
Should I fix under the current price cap?
If you are on the Standard Variable rate and your heat pump runs through the day, locking in a dedicated heat-pump tariff or a cheap fixed deal now protects you from the +£221 increase. Take a meter reading on 30 June so the cheaper cap covers everything used up to that date, then apply – the switch completes within five working days.
Is Octopus Cosy worth it compared with a flat rate?
Cosy works best where you have thermal storage (a buffer tank, hot-water cylinder or underfloor screed) that can charge during the 04–07, 13–16 or 22–00 windows. Without that storage, peak-period draw at around 28p/kWh can erode the benefit. Run a worked comparison via the comparison form to see a like-for-like estimate.
Will I lose the BUS grant if I switch supplier after install?
No. The £7,500 Boiler Upgrade Scheme grant is paid to the MCS installer when the install completes and is independent of which energy supplier you choose afterwards. You are free to switch electricity supplier at any point – including the moment your heat pump is commissioned.
What happened to OVO Heat Pump Plus?
OVO Heat Pump Plus, which gave an effective 15p/kWh on heat-pump usage, closed to new customers on 1 February 2026 and stopped applying the rebate to existing accounts. Affected households now pay OVO’s standard variable rate, so it is worth comparing the four open tariffs above – Octopus Cosy, E.ON Next, British Gas and EDF – via the comparison form.
Written by: EnergyPlus Editorial Team. Last reviewed August 2026. Rates verified August 2026 against supplier tariff pages and Ofgem’s price-cap figures for 1 July–30 September 2026.
Worked examples use the July 2026 Standard Variable cap (26.11p/kWh electricity, 57.19p/day standing charge) and published heat-pump tariff rates; your figures depend on your region, usage and seasonal performance factor. We compare the whole of the market and do not charge you to switch.
Lock in your heat-pump tariff under the current price cap
The Ofgem cap rose £221 to £1,663, taking the Standard Variable electricity rate to 26.11p/kWh. Switching to a dedicated heat-pump tariff today protects you from that rise and routinely cuts annual heating spend by 35–45% versus the default rate. Verified August 2026.
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