Which energy company offers the cheapest way to get a heat pump?

British Gas has unveiled a new energy deal that claims to save heat pump owners up to £450 a year on their energy bills – in addition to a raft of competitive incentives to encourage households to replace their gas boilers.

The National Audit Office said in March that the high costs of heat pumps and a lack of understanding are preventing more households from choosing energy-saving appliances.

In response, the government and energy companies have introduced cheaper heat pumps, subsidies and better energy deals for those who have the devices installed.

Here you will find all the discounts available for homes with a heat pump or who are thinking of purchasing one.

Cheap energy deals

British gas

A new offer from British Gas claims it can save households up to £450 a year on energy bills if they switch to a heat pump.

To get cheaper electricity, customers must have an air-to-water heat pump installed by British Gas before September 31, 2024.

They will then have to take out a British Gas energy deal, which will give them access to the special heat pump tariff.

All electricity used by the heat pump will be reduced to 14 cents per kilowatt hour (kWh) for the first twelve months of the deal. After that the price is unknown.

A spokesperson for British Gas said: ‘As with all our energy offers, we continually review our prices to ensure we provide value for our customers.

‘We will do the same with our heat pump energy offering after the 12 months of the reduced tariff.’

The average home currently pays 24.5 cents per kWh for electricity.

This is due to the Ofgem price cap, which limits gas and unit rates for those on variable rate energy contracts paid by direct debit.

More than 80 percent of British homes have an energy contract that is limited by the price cap.

British Gas says this will save customers up to £450 on their heating bills compared to a D-rated gas boiler. The savings are credited to the energy bill every month.

EDF

EDF has a heat pump tariff that claims to save heat pump customers £164 per year on energy bills, provided they use it during two daily windows.

The EDF Heat Pump Tracker tariff is available to new and existing customers with any form of heat pump. The energy company claims it will never charge more than the maximum prices.

The tariff provides six hours of cheap electricity every day, between 4 a.m. and 7 a.m. and from 1 p.m. to 4 p.m.

If you use your heat pump during these hours, this means that EDF saves 10 cents per kWh, regardless of the capped rate for electricity units in your region. The national average is 24.5 cents per kWh, so EDF customers can run their heat pumps for 14.5 cents per kWh.

However, running a heat pump outside the two windows will be charged at full rate, and the tricky timing of the windows may not correspond with the times when customers actually want to heat their home, such as in the evening.

Households must also have a smart meter to register.

Ovo

Ovo’s Heat Pump Plus is advertised as saving up to £300 per year on heating costs, compared to a capped tariff.

Similar to those offered by British Gas and EDF, the tariff offers energy rates of 15 cents per kWh for a heat pump only.

The offer is an addition to every Ovo energy deal. To qualify, customers must have a Vaillant heat pump, or have purchased a heat pump through Ovo’s partner Heat Geek.

They must also have a smart meter.

Any savings will be refunded to the customer.

Octopus energy

The Cozy Octopus tariff offers cheap electricity every day between 4am and 7am and from 1pm to 4pm – not just for heat pumps.

Octopus says this tariff could save the average home up to £300 a year on energy bills.

The electricity used during the two off-peak hours will be 51 percent cheaper than the flexible Octopus tariffs with a maximum price.

But the deal has a big catch. For electricity used between 4:00 PM and 7:00 PM, you will be charged 45 percent above that

For example, in central Kent, Octopus charges 25.29 pence per kWh for electricity based on the price cap rate.

Someone with Cozy Octopus would pay approximately 12.3 cents for electricity consumption during the two off-peak hours.

But that rises to an alarming 36.67 cents per kWh between 4pm and 7pm, when many households would normally have high energy consumption.

Customers must have a smart meter to register.

Subsidies for heat pumps

£7,500 government grant

Homeowners who swap their gas or oil boilers for heat pumps can get government grants of up to £7,500 to install them under the Boiler Upgrade Scheme (BUS).

To get the grant, homeowners must agree a quote for the work with a Microgeneration Certification Scheme (MCS) certified installer, who will then do all the paperwork.

Energy regulator Ofgem will then contact the customer to confirm whether they wish to proceed.

£2,500 from Worcester Bosch

Homeowners with a gas boiler can get £2,500 to have a heat pump installed – if they choose one from Worcester Bosch.

Worcester Bosch’s ‘Clean Heat Cashback Pledge’ is offering the cash in return for choosing a Bosch heat pump, or £1,000 if they choose a Bosch hybrid system.

Cheap heat pumps

British gas

British Gas has a heat pump that can be installed from £499 plus the £7,500 grant.

The country’s largest energy company said the starting price for heat pump installations was £7,999 – or £450, assuming the homeowner has access to the full £7,500 BUS grant.

That £450 price assumes no upgrade work is required for the property to have a heat pump.

However, this is not possible for all homes. British Gas said the average home that received a heat pump paid £5,690 on top of the £7,500 government grant.

Octopus

Octopus Energy says the ‘Cozy Octopus’ heat pump can be fitted for free, or for just £500, provided customers can get the full £7,500 BUS grant.

A homeowner must also own a home that does not require any renovation work to make it suitable for a heat pump. Consider requiring new insulation, radiators or pipes.

Homes that need some upgrades to accommodate a heat pump can get the Octopus heat pump for around £3,000 after the BUS grant.

Ovo

Ovo has a heat pump deal that can be installed for just £500, again, provided a homeowner can get the full BUS grant of £7,500.