Octopus Energy has claimed that heat pumps are now cheaper to run than gas boilers, backed by new data from thousands of UK homes.
The company’s newly launched performance dashboard suggests many households could save around £200 a year by switching.
But while the figures point to growing momentum behind low-carbon heating, wider evidence shows the reality may depend heavily on the home, tariff, and system design.
Article continues belowWhat Octopus is claiming
Octopus Energy says its new Cosy Heat Pump Fleet Performance Dashboard provides “real-world” evidence that heat pumps are already beating gas boilers on cost.
The tool aggregates anonymised data from thousands of systems installed across Britain, offering live insights into efficiency and running costs.
According to the company’s data, around 80% of its Cosy Octopus heat pump customers paid less to heat their homes than they would with a gas boiler over the past year.
Customers on its dedicated tariff reportedly saved an average of £219 per year, while the systems delivered over 4 units of heat for every unit of electricity used (COP ~4.1), far higher than the roughly 85% efficiency of a typical gas boiler.
Octopus Energy CEO Greg Jackson said the data shows heat pumps can “beat the boiler in efficiency” and reduce bills, adding that the dashboard is intended to demonstrate this “in perpetuity” using real household data.
What other data suggests
While heat pumps are widely recognised as more efficient than gas boilers, the cost comparison is less clear-cut across the wider market.
Independent sources, including the Energy Saving Trust, show that the cost of running a heat pump versus a gas boiler still varies widely and isn’t guaranteed to be cheaper in every household.
The Energy Saving Trust notes that electricity in the UK typically costs around four times more per unit than gas, which can erode some of the efficiency advantage of heat pumps - especially on standard tariffs.
Based on recent estimates, a typical air‑source heat pump in an average three‑bedroom semi might cost £900–£1,200 a year to run, compared with £1,400–£1,800 for a conventional gas boiler when using standard energy prices; this suggests savings can arise in some cases, but are not automatic.
The same Energy Saving Trust guidance also emphasises that whether a heat pump delivers lower bills depends on several factors, including how well‑insulated the home is, whether the system is properly designed and controlled, and the tariff being used. They point out that heat pumps generally cost slightly more to run than new gas and oil boilers on typical electricity prices, even though they are more efficient overall.
Independent comparisons also show that using specialist electricity tariffs - similar to those promoted by Octopus, can make heat pumps significantly cheaper to operate, tipping the balance in their favour. These findings underline that running cost outcomes depend heavily on electricity price, tariff structure, energy efficiency of the home, and heat pump performance, rather than heat pumps inherently costing less in all circumstances.
The verdict: It depends
Octopus Energy’s data adds to growing evidence that heat pumps can be cheaper to run in the right conditions, particularly in well-insulated homes using optimised tariffs.
However, the broader picture suggests costs still vary widely from home to home. Factors such as insulation, installation quality, heating system design, and energy tariffs all play a major role in determining whether savings are realised.
So if you're still deciding whether heat pumps are worth it, you now know heat pumps may now be cheaper than gas in some cases, but not all, and careful design and specification remain key.
