Ofgem Q1 2026 Tariffs: How Do They Affect Heat Pump Running Costs?

Ofgem's Q1 2026 tariff cap sets electricity at 24.5p/kWh and gas at 6.4p/kWh (standing charges aside). Here is what these figures mean for the heat pump vs gas boiler running cost comparison.

The electricity-to-gas price ratio is 3.83:1. For a heat pump to match a gas boiler on running costs, it needs a SCOP of at least 3.83. Most modern air source heat pumps achieve SCOP 3.5-4.5 in real UK conditions, meaning well-installed units are cost-competitive or cheaper than gas.

For a typical 3-bedroom semi-detached house with 12,000 kWh annual heating demand: gas boiler annual cost at 6.4p/kWh is approximately £768. Heat pump at SCOP 3.5 and 24.5p/kWh electricity is approximately £840 - just £72/year more. At SCOP 4.0, the heat pump costs £735 - slightly cheaper than gas.

The oil comparison is more compelling. Oil at 72p/litre and 10.35 kWh/litre equates to approximately 6.96p/kWh - higher than gas but the comparison is still affected by efficiency. For a heat pump with SCOP 3.5, the annual saving versus oil is typically £400-700/year.

LPG users see the biggest savings. At approximately 7.2p/kWh effective cost, LPG heating for the same property costs around £864/year. A heat pump at SCOP 3.5 saves roughly £24-100/year versus LPG at these tariffs - modest on the running cost comparison, but becomes very significant when combined with the £7,500 grant.

Use our running cost calculator to input your own heating demand and get a personalised comparison with current Ofgem tariffs built in.