Are Heat Pumps Cheaper to Run Than Gas Boilers?

A survey of 1,000 heat pump owners has sparked fresh discussion about whether heat pumps really cost less to run than gas boilers. Surprisingly, despite claims about the savings they can offer, the results commissioned by the Green Britain Foundation show that many households are actually paying more than expected. This naturally raises questions for both businesses and homeowners who are thinking about making the switch.

How do running costs compare in November 2026?

In percentage terms, gas has risen faster than electricity at wholesale level this year, which helps heat pumps a little. Year-ahead gas was 184.5p a therm on 2 November against a February average of 67.1p, while year-ahead power was £143.14/MWh against £67.58.

The retail gap is still wide. Our indicative small business prices as at November 2026 are 29.0p a kWh for electricity and 8.9p for gas, more than three to one. Households on Ofgem's price cap for October to December 2026 pay 26.32p and 7.97p, a similar gap. In simpler terms, a heat pump has to turn each kWh of electricity into more than three kWh of heat just to match gas before boiler losses. At three to four times efficiency and 29.0p a kWh, heat costs roughly 7p to 10p a kWh (our calculation), so your building decides whether you save. Check your own business gas rates first.

What did the survey find?

The survey carried out by the Green Britain Foundation found that around two-thirds of respondents, roughly 60 per cent or more, said their heat pumps cost more to run than their old gas boiler systems. Around 15 per cent said their bills had gone down, while the rest reported little change or said they were not sure.

In reality, this seems to contradict surveys previously carried out by the government, which showed high levels of satisfaction among heat pump users. Officials have often pointed to research suggesting that most homeowners see lower energy bills after installation.

Understanding Electricity Prices and Heat Pump Efficiency

When you look at the data alongside people’s real life experiences, it does paint a mixed picture. However, much of this comes down to how energy is priced in the UK. Heat pumps are actually very efficient and, on average, they can produce three to four times more energy than they use. The challenge is pricing, as electricity costs more per unit than gas. For many users, that difference can cancel out the potential benefits of running a heat pump.

We would highly advise businesses to compare gas prices per kWh with commercial electricity rates before investing or to get in touch with us. At the moment, the gap between gas and electricity prices means that even very efficient heat pumps can struggle to deliver the savings people expect. Especially, in older buildings with poor insulation.

This suggests that the type of property may be the biggest factor when it comes to heat pumps. Modern, well-insulated buildings are more likely to see real savings. Older properties, on the other hand, can struggle to retain heat, which means they may not see these benefits.

Start with the basics

While the debate around heat pumps continues, many businesses are currently paying too much for their commercial gas and electricity. Before investing in new technology, it is worth checking whether you are on the cheapest business gas and the best business electricity rates available. Reviewing your current contracts is often enough: savings in our published case studies run from £595 to £67,625 a year, with a median of about £5,600.

Moving forward with heat pumps?

The government’s November 2025 Budget, which moved 75% of the household Renewables Obligation cost onto the Exchequer for three years from April 2026, showed a growing recognition that the price gap between gas and electricity needs to be addressed. Business electricity bills still carry the full cost. As the grid becomes greener, electricity prices may begin to fall and move closer to gas prices, which would allow heat pumps to make more financial sense over time.

However, for now it is important to understand that heat pumps can save money only in the right conditions. Installing one without proper planning can easily lead to disappointment. Much depends on the state of your building: a well-insulated, draught-proofed property allows a heat pump to run efficiently at lower flow temperatures. Whereas a poorly insulated one forces the system to work harder and pushes running costs up. Your existing heating setup, radiator sizes, and how you use heat throughout the day all play a part too. It is also worth weighing up the upfront installation cost against available grants and your likely long-term savings, rather than assuming the switch will pay off automatically.

Can Purely Energy Help?

As a UK energy broker rated 4.9 on Google from 67 reviews, we're here to help you make the right choice. If you need help with your business gas or electricity, get in touch with us.

Managing energy costs is one of the biggest challenges facing UK businesses today, and the market rarely stands still. Wholesale prices shift constantly, contract terms vary widely between suppliers, and the wrong deal can lock you into rates that quietly erode your margins for years. That is where we come in. We compare 19 suppliers on your behalf, cutting through the jargon so you can see clearly what you are paying for and why. Whether you are a small independent business or managing multiple sites, we tailor our advice to your usage, your budget, and your plans for the future.

Our team handles the legwork, from gathering quotes to arranging your switch, so you can stay focused on running your business rather than chasing tariffs. We keep the process straightforward, transparent, and built around getting you a deal that genuinely works.

To find the best rates please click here. For more information, contact us on 0161 521 3400 or email us at info@purelyenergy.co.uk.

Written By Faith Labong at Purely Energy