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The best electricity tariffs for heat pump owners in the UK (2026)

Last updated 2026-09-10

Replacing an old gas or oil boiler with an electric air source heat pump is one of the most effective ways to lower your carbon footprint and modernise your home heating. However, for many UK homeowners, moving from gas to grid electricity creates a new financial question: how do you keep electricity bills manageable when heating your home?

In the UK, grid electricity costs roughly 27p per kWh, whereas mains gas sits around 7p per kWh. Even though a heat pump operates with remarkable efficiency—converting 1 kWh of electricity into 3 to 4 kWh of heat—your annual bill depends heavily on the specific energy tariff you choose. Selecting the best tariff for heat pump heating can reduce your total electricity costs by 15% to 30%, saving £150 to £400 every year without sacrificing home comfort.

This guide compares the leading UK cheap electricity for heat pumps options—including the dedicated Octopus Cosy tariff, dynamic pricing on Octopus Agile, EV tariffs, and traditional time-of-use options—so you can pick the right plan for your system and lifestyle.

Why your choice of heat pump tariff matters so much

In a typical UK home with a gas boiler, electricity powers lights, appliances, and electronics, accounting for roughly 2,700 kWh of annual consumption. When you switch to a heat pump, your home becomes largely or entirely electric. A typical air source heat pump uses between 3,000 and 5,000 kWh of electricity per year for space heating and domestic hot water.

That means your heat pump will represent 40% to 60% of your home's total electricity consumption. For a full breakdown of annual power usage and property sizing, explore our detailed heat pump running costs guide.

Because space heating requires so many kilowatt-hours, even small differences in unit rates have a massive impact on your annual energy bill:

• Standard Variable Tariff (27p/kWh average): 4,000 kWh for heat pump = £1,080/year
• Smart Heat Pump Tariff (21p/kWh average blended rate): 4,000 kWh for heat pump = £840/year (saving £240/year)
• Smart Tariff + Battery Pre-heating (16p/kWh average blended rate): 4,000 kWh for heat pump = £640/year (saving £440/year)

Unlike physical home improvements such as cavity wall insulation or double glazing, switching to a dedicated heat pump tariff costs nothing upfront and can be completed in minutes online.

Octopus Cosy: the dedicated heat pump tariff explained

The most widely used specialist heat pump tariff in the UK is Octopus Cosy, created by Octopus Energy specifically for homes with clean heating systems.

Unlike traditional flat-rate tariffs that charge the same unit rate 24 hours a day, Octopus Cosy uses a time-of-use structure with two discounted off-peak windows, a standard daytime rate, and an evening peak rate:

• Off-Peak Window 1 (04:00 – 07:00): Roughly 50% cheaper than standard variable rates (~12p/kWh). Perfect for pre-heating your house before waking up and boosting your domestic hot water cylinder.
• Off-Peak Window 2 (13:00 – 16:00): Roughly 50% cheaper than standard variable rates (~12p/kWh). Ideal for topping up indoor warmth during the afternoon before peak evening pricing begins.
• Standard Day Rate (All other non-peak hours): Roughly 20–25% cheaper than the standard variable tariff (~21p/kWh vs 27p/kWh). Applies throughout the morning, late evening, and overnight outside off-peak slots.
• Peak Window (16:00 – 19:00): A higher rate (~38p/kWh) designed to discourage heavy power usage during the national grid's highest demand period.

By shifting hot water heating cycles and minor space-heating boosts into the two 3-hour off-peak slots, heat pump owners on Octopus Cosy typically achieve an effective average unit rate of 18p–21p/kWh. This delivers typical annual bill savings of 10% to 20% (£150 to £300/year) compared to standard variable rates.

How to qualify and sign up for Octopus Cosy

To switch your home to Octopus Cosy, you must meet three straightforward requirements:

1. A smart meter sending half-hourly reads: You need a working SMETS1 or SMETS2 smart meter so Octopus can log your exact electricity usage during every 30-minute window.
2. A qualifying heat pump system: Your home must have an air source or ground source heat pump installed. While an MCS-certified installation is standard for claiming government support like the Boiler Upgrade Scheme (£7,500 grant), Octopus simply requires confirmation of a heat pump on-site or integration with compatible smart controls (such as Daikin, Mitsubishi, Vaillant, NIBE, or GivEnergy).
3. An Octopus Energy account: If you are currently with another energy supplier, you can switch to Octopus Energy on a standard variable plan first. Once your smart meter data stream is confirmed, you can toggle onto Cosy inside the Octopus app or online dashboard.

Comparing other smart tariffs: Agile, Go, and Economy 7

While Octopus Cosy is the leading out-of-the-box tariff for air source systems, other smart and time-of-use electricity tariffs exist across the UK market. Here is how they stack up for heat pump owners:

1. Octopus Agile (Dynamic half-hourly pricing)

Octopus Agile updates its electricity unit rates every 30 minutes based on wholesale electricity market prices. On windy or exceptionally sunny days, electricity rates drop significantly—sometimes even into negative pricing where you are paid to consume power.

However, Agile prices can spike up to 35p–50p+/kWh during national peak hours (16:00–19:00). Agile is best suited to tech-savvy homeowners who use automated home energy management systems (such as Home Assistant, Homely smart thermostats, or integrated home battery storage) to automatically pause heat pump operation during price spikes and run at maximum output during cheap half-hours.

2. Octopus Go (EV-focused off-peak tariff)

Octopus Go is primarily designed for electric vehicle owners, offering a 4-hour super-cheap overnight window (typically 00:30–04:30 at ~8p/kWh) with a standard daytime rate of ~26p/kWh for the remaining 20 hours.

If you own an electric car alongside a heat pump, Octopus Go allows you to charge your car overnight while simultaneously running your heat pump to heat your domestic hot water cylinder to 60°C for just a few pence. However, for daytime space heating throughout winter, Cosy's lower daytime rate (~21p/kWh) usually beats Go's daytime rate (~26p/kWh).

3. Economy 7 (Traditional time-of-use tariffs)

Traditional Economy 7 tariffs provide 7 hours of cheap electricity overnight (e.g. 00:00–07:00 at ~12p/kWh) but penalise users with high daytime rates (~32p/kWh).

Economy 7 is usually NOT recommended for heat pumps. Gas boilers work by firing intermittently at high temperatures (60–75°C), whereas heat pumps operate most efficiently when running continuously at low flow temperatures (35–45°C) throughout the day. To learn more about low-temperature heat distribution compared to boilers, read our guide on air source heat pumps vs gas boilers. Turning a heat pump off all day on Economy 7 forces it to work twice as hard during expensive daytime hours, wiping out overnight savings.

Smart controls, weather compensation, and thermal mass synergy

Signing up for a smart heat pump tariff is only half the equation; the real magic happens when your heat pump controls work in tandem with your tariff schedule.

To maximize your savings on tariffs like Octopus Cosy, your system should leverage three key principles:

• Weather compensation: Ensure your installer has enabled weather compensation on your heat pump controller. This feature automatically adjusts the water flow temperature based on outdoor weather—running lower on mild days (improving COP efficiency) and higher only when freezing outside.
• Scheduled pre-heating: Program your thermostat to boost indoor temperatures by 1°C–2°C during off-peak windows (04:00–07:00 and 13:00–16:00). Heating the home when electricity costs 12p/kWh reduces the work your heat pump needs to do when rates jump later in the day.
• Building thermal mass: Heavy building materials—such as brick walls, concrete subfloors, screeded underfloor heating, and insulated plasterboard—act like a giant thermal battery. A well-insulated house pre-heated during the afternoon off-peak window will retain its warmth through the 16:00–19:00 peak period without the heat pump needing to run at all.

When budgeting for a new installation or upgrading controls, review our guide on how much a heat pump costs in the UK to factor in smart thermostat equipment and setup fees.

The solar panels and battery storage advantage

If you want to take energy independence a step further, pairing your heat pump with rooftop solar panels and a home battery (5 kWh to 10 kWh capacity) unlocks the lowest possible running costs.

During winter, solar PV generation is naturally lower, but a home battery allows you to "time-shift" cheap grid electricity. You can charge your battery from the grid during Cosy's early morning or afternoon off-peak windows at ~12p/kWh, then use that stored energy to power your heat pump and domestic appliances during the expensive 16:00–19:00 peak window.

In spring, summer, and autumn, rooftop solar panels generate free electricity during daylight hours, running your heat pump's daily hot water maintenance cycle for zero cost. For full financial payback calculations and system designs, read our complete guide on pairing solar panels with a heat pump.

UK heat pump tariff comparison (2026 benchmark rates)

The table below compares typical UK electricity tariffs available for heat pump owners. Figures represent national average benchmark rates for standard payment types as of September 2026:

How to switch tariffs and set up your heating schedule

Switching to a smart heat pump tariff is a straightforward process that takes just a few steps:

1. Verify smart meter reads: Check your energy supplier app to ensure your SMETS1 or SMETS2 smart meter is successfully sending half-hourly readings. If you don't have a smart meter, contact your supplier to request a free installation.
2. Submit your tariff switch request: Log into Octopus Energy (or your chosen supplier) and request a switch to Octopus Cosy or your selected smart tariff. The transition usually takes 24 to 48 hours once smart meter communication is validated.
3. Program your domestic hot water cylinder: Set your heat pump's hot water schedule to run during one of the cheap off-peak windows—such as 04:00 to 06:30 in the morning or 13:30 to 15:30 in the afternoon.
4. Configure thermostat temperature setbacks: Set your living areas to your desired comfort temperature (e.g., 20°C) during off-peak slots. For the 16:00 to 19:00 peak period, set a mild setback temperature of 18.5°C–19°C. Your home's insulation and thermal mass will keep rooms comfortable while preventing high grid electricity imports during peak rates.

Price cap caveat & rate updates

Note on energy price updates: UK energy tariffs, wholesale energy costs, and the Ofgem energy price cap are updated regularly throughout the year. Unit rates and standing charges vary slightly depending on your geographic region in the UK and your payment method. The figures listed in this guide serve as illustrative national benchmarks as of September 2026. Always confirm live unit rates directly with energy suppliers before switching plans.

Frequently asked questions

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