Heat Pump vs Gas Boiler: A 2026 Running Cost Reality Check

The Ofgem Q1 2026 default tariff cap, effective 1 January to 31 March 2026, sets:

• Gas: 5.74p/kWh unit, 32.13p/day standing charge (single-rate, direct debit)
• Electricity: 24.67p/kWh unit, 64.18p/day standing charge (single-rate, direct debit)

The cap will be reset for Q2 2026 (April to June) — at the time of writing this guide, Cornwall Insight's May 2026 forecast is for a 3-5% increase to gas unit rates and a 1-2% reduction in electricity rates, narrowing the gas:electricity ratio slightly.

For comparison, smart tariff alternatives in May 2026 include:

• Octopus Tracker: wholesale-linked, currently around 21p/kWh electricity
• Octopus Cosy (heat pump tariff): 13p cheap / 26p standard / 39p peak — effective rate around 18-20p/kWh for heat pump load
• Octopus Agile: half-hourly, frequently 6-15p/kWh in off-peak windows
• Octopus Go (5h overnight): 7p cheap, 24p rest of day — primarily for EV but useful for heat pump cylinder reheat

If you are heat-pump curious, switching to a smart tariff after install is the single biggest running cost lever. See our Octopus Cosy explainer.

To compare like-for-like we need to convert raw fuel costs into cost per kWh of usable heat.

Gas boiler efficiency

Modern condensing combi and system boilers (Worcester Greenstar 4000, Vaillant ecoTEC plus, Viessmann Vitodens 100-W) are rated 92-94% ErP under SAP. In real-world steady-state operation in a typical Cornwall home, true seasonal efficiency tends to be lower because:

• Many installations run too-hot return temperatures, suppressing condensation (target return: 55°C; reality: often 60-65°C)
• Short-cycling on mild days reduces effective efficiency
• Standing losses on the cylinder (for system boilers) add 5-10% annual loss

Honest field figures from BRE/DESNZ studies put combi seasonal efficiency at 85-90% and system boiler at 82-87%. We use 88% as a reasonable mid-point in this guide.

Heat pump SCOP

SCOP (Seasonal Coefficient of Performance) is the heat pump equivalent figure, measuring how much heat is delivered per unit of electricity over a full season. Field data from the DESNZ Electrification of Heat trial put median ASHP SCOP (H4 boundary, including circulating pumps and immersion top-up) at 2.80 nationally. Our Cornwall installs typically run 3.2-3.8 because we design conservatively and the climate is mild.

For this guide we use:

• SCOP 3.0: conservative case, existing radiators, basic controls
• SCOP 3.5: typical case, upgraded radiators where needed, weather compensation enabled
• SCOP 4.0: best case, underfloor heating or oversized radiators, modern controls

Cost per kWh of heat

The headline: on the default tariff, a SCOP 3.5 ASHP is about 8% more expensive per kWh of heat than a modern gas boiler. On Octopus Cosy, the same heat pump is 17% cheaper than gas. This is the crux of the comparison.

To turn cost-per-kWh into annual bills we need typical heating demand. These are space heating + hot water combined, based on BRE statistics for 2025 and our own Cornwall installation data.

Cornwall demand tends to skew slightly lower than the UK average because of the mild climate (heating degree days around 1,950 versus UK average of 2,400) but slightly higher than that average for older granite-built properties because of fabric heat loss.

Combining the unit costs and demand, here are the headline annual bills (excluding standing charges, which are roughly equivalent and offset by the gas standing charge saving if you go all-electric).

Add the gas standing charge saving if you go fully electric (cancel the gas meter): around £115/year. So the all-in comparison adjusts:

• 2-bed terrace: gas £767 vs ASHP-Cosy £543 = save £224/year
• 3-bed semi: gas £1,093 vs ASHP-Cosy £815 = save £278/year
• 4-bed detached: gas £1,419 vs ASHP-Cosy £1,086 = save £333/year
• 5-bed farmhouse: gas £2,071 vs ASHP-Cosy £1,629 = save £442/year

So for any reasonably sized Cornwall home on Octopus Cosy, the heat pump comes out ahead by £200-450 annually versus a modern gas boiler. The savings increase with property size because the absolute heat demand scales linearly while the standing charge offset is fixed.

On a basic standard tariff (no smart tariff), the heat pump is roughly equivalent to gas — within ±£100/year. So the smart tariff is doing most of the running-cost work.

Carbon intensity is where heat pumps win unambiguously. The relevant figures for May 2026:

• Mains gas: 183 gCO2/kWh (combustion only, before methane leakage upstream which adds another 5-15%)
• UK grid electricity: 138 gCO2/kWh (average, 2025 calendar year, falling at ~5%/year)

Per kWh of heat delivered (after applying boiler efficiency and heat pump SCOP):

So a heat pump on grid average produces about one-fifth the carbon of a gas boiler, and on a green tariff the carbon is effectively zero. For a 4-bed Cornwall home using 20,000kWh of heat, that is a saving of around 3,400kg CO2/year — roughly equivalent to taking a small petrol car off the road.

The grid is decarbonising fast: in 2014, UK grid carbon was 446 gCO2/kWh; in 2025 it was 138 gCO2/kWh; National Grid ESO projects under 50 gCO2/kWh by 2030 as offshore wind and storage scale. Gas, by contrast, is fundamentally a fossil fuel — there is no decarbonisation pathway short of synthetic methane or hydrogen blending (both still pilot-scale and expensive). The carbon gap will widen, not close.

Capital costs are where the gas boiler still wins on raw outlay, but the BUS grant changes the calculus.

Modern gas boiler replacement

A typical Cornwall combi swap (Worcester Greenstar 4000, fitted by Gas Safe engineer, including flue, controls and certification) costs £2,400-3,500. A system boiler swap with new cylinder runs £3,200-4,800. These are mature, commodity prices.

Heat pump install (post-grant)

A typical Cornwall ASHP install for a 3-4 bed home costs £9,000-14,000 net of the £7,500 BUS grant. So the heat pump is roughly £6,000-10,000 more expensive than the like-for-like gas swap.

Capital payback

If the heat pump saves £300/year (4-bed on Cosy tariff), the capital uplift of £8,000 pays back in about 27 years — longer than the heat pump's 15-20 year design life. On pure cash payback, swapping a working modern gas boiler for a heat pump does not pay back.

However, the comparison shifts dramatically if your gas boiler is at end of life:

• If your gas boiler is 12+ years old and needs replacement anyway, the marginal cost of choosing a heat pump over a new boiler is only £6,000-10,000 — and the £300/year saving plus EPC uplift makes this a 15-20 year payback, well within the heat pump life
• If you are moving to a new property, installing a heat pump from day one is cheaper than installing a gas boiler then replacing later

Property value uplift

Land Registry analysis for Cornwall 2024-2026 shows EPC C+ properties sell at a 2-4% premium to EPC D-G properties of comparable spec. A heat pump install typically raises EPC by 1-2 bands. For a £350,000 Cornwall home, a 3% uplift is £10,500 — broadly equivalent to the capital uplift over a gas boiler. So in property-value terms, the install is roughly self-funding at sale.

Even leaving aside carbon, several Cornwall scenarios make heat pumps the unambiguous economic choice:

Replacing oil or LPG

The rural Cornwall majority. Oil at 78p/litre delivers heat at 8.52p/kWh; LPG at 75p/litre delivers heat at 11.74p/kWh. A heat pump at SCOP 3.5 on standard tariff delivers heat at 7.05p; on Cosy, 5.43p. Annual savings of £400-1,200 are typical. Payback inside 8-12 years post-grant.

New-builds and self-builds

The Future Homes Standard effectively ends gas in new builds, and a heat pump from new costs no more than a gas boiler plus a flue and gas connection. Plus you get the £7,500 grant via the self-build exemption. No-brainer.

Off-gas-grid electric storage heaters

Direct electric heating costs the full 24.67p/kWh — there is no boiler to amortise. A heat pump at SCOP 3.5 cuts heating costs by 70%. For a 3-bed off-gas Cornwall property using 12,000kWh of electric heating, that is a saving of around £2,000/year, paying back the grant-aided install in 5-6 years.

Combined with solar PV and battery

If you generate your own electricity at marginal cost zero, a heat pump becomes effectively free heat from May to September and very cheap heat the rest of the year. A typical 6kWp solar + 10kWh battery + ASHP combo on Octopus Intelligent Flux often runs an annual electricity bill near zero net of export income.

Two scenarios where the cash case is genuinely tight — though the carbon case still favours heat pumps:

Modern working gas combi

If your gas combi was installed in the last 5 years and is working perfectly, the cash payback for swapping to a heat pump is poor. You are forfeiting the residual value of a working asset and the running cost saving on Cosy is only £200-400/year. The case here is purely carbon, future-proofing, and possibly EPC compliance for landlords. We will tell you honestly if your situation falls into this bucket — and we have plenty of customers who choose carbon and future-proofing knowing the cash math is tight.

Poorly insulated solid-wall property in pure-cash terms

For older solid-wall granite Cornwall properties with high heat loss (35,000kWh/year+), a heat pump still works but flow temperatures need to be higher (55-60°C), suppressing SCOP to 2.8-3.2. At those SCOPs, the cash case versus mains gas is marginal. The right answer is usually fabric-first: insulate where possible (loft top-up, internal wall insulation on suitable elevations, secondary glazing on listed windows) before installing a heat pump, lifting SCOP to 3.5+ and cutting demand by 20-30%.

For both scenarios we recommend booking a free CCS heat loss survey — call 01209 596 002. We will give you the honest numbers for your specific property, not a sales pitch. See our heat pump page and the heat pump costs pillar guide.