Air source heat pump running costs: what a tenant pays and what a landlord should explain

Who pays for heat pump running costs in a rented home

In most tenancies the tenant pays the energy bills, so the landlord pays for the heat pump and the tenant pays to run it. The person choosing the equipment does not see the bill. Check what the tenancy agreement says about utilities. If the rent includes bills, the running cost is yours.

A heat pump moves the heating cost from the gas meter to the electricity meter. A tenant who only ever watched the gas bill will see the electricity line rise sharply. If the home is all-electric today, the change is smaller and usually favourable. On mains gas, the tenant’s total energy bill may fall slightly, stay level or rise, depending on how well the system performs.

A heat pump that costs more to run than the boiler it replaced is a rent-affordability and complaint risk, even if the installation is perfect. A tenant who does not understand the controls may switch it off or boost it with plug-in heaters, which raises the bill further.

Running cost arithmetic and the assumptions behind it

Running cost is the heat the home needs, divided by the pump’s seasonal efficiency, multiplied by the price of electricity. Every figure uses the Ofgem price cap for 1 October to 31 December 2026: electricity at 26.32p per kWh (no VAT from 1 October 2026 to 31 March 2027) and gas at 7.97p per kWh (5% VAT included). The cap is a ceiling on a standard variable tariff, not a guaranteed price, and it changes each quarter.

The assumptions:

• Heat demand is the heat delivered to radiators and hot water in a year: 5,000, 9,000, 12,000 and 18,000 kWh. The 12,000 kWh row is the illustrative three-bedroom semi used across this site. An EPC figure is a modelled estimate, not a meter reading.
• SCOP (seasonal coefficient of performance) is the heat produced per unit of electricity over a year. This guide uses 2.8, 3.0 and 3.5.
• Gas boiler efficiency is 90%, so 1 kWh of heat costs 7.97p ÷ 0.9 = 8.86p.
• Heat pump heat costs 26.32p ÷ SCOP: 9.40p at 2.8, 8.77p at 3.0 and 7.52p at 3.5.
• Electricity standing charge is ignored because the tenant pays it with or without a heat pump.
• Gas standing charge is 29.68p a day, about £108 a year, and counts only if the gas supply is disconnected.

Electricity costs 3.3 times as much per kWh as gas. A heat pump would need a SCOP of 3.3 to match gas burned at 100% efficiency. Because a boiler wastes 10% of its fuel, the real hurdle is about 2.97.

Annual heating cost table: heat pump against a gas boiler

At these prices a heat pump with a SCOP of 3.0 costs about the same to run as a gas boiler, and a SCOP of 2.8 costs more. Only at 3.5 does it clearly win. The table shows the yearly cost of the heat, rounded to the nearest £1.

Annual heat demand	Gas boiler (90%)	Heat pump SCOP 2.8	Heat pump SCOP 3.0	Heat pump SCOP 3.5
5,000 kWh	£443	£470	£439	£376
9,000 kWh	£797	£846	£790	£677
12,000 kWh	£1,063	£1,128	£1,053	£902
18,000 kWh	£1,594	£1,692	£1,579	£1,354

Formula. Gas cost = heat demand ÷ 0.9 × £0.0797. Heat pump cost = heat demand ÷ SCOP × £0.2632. For 12,000 kWh: gas 12,000 ÷ 0.9 × 0.0797 = £1,063; heat pump at SCOP 3.0 = 12,000 ÷ 3.0 × 0.2632 = £1,053. Standing charges are excluded.

Worked example (modelled, not a real project)

Inputs: 12,000 kWh of heat, boiler efficiency 90%, gas 7.97p, electricity 26.32p. At SCOP 3.0 the pump uses 4,000 kWh of electricity and the tenant’s electricity bill rises by about £1,053 a year, while the gas bill falls by about £1,063. At SCOP 3.5 it uses 3,429 kWh and costs £902, which is £161 a year less than gas. At SCOP 2.8 it uses 4,286 kWh and costs £1,128, which is £65 more.

If the gas supply is disconnected

If the heat pump replaces gas for heating and hot water and the home has no other gas use, the gas supply can be disconnected and the £108 a year standing charge stops. Saving = gas cost plus standing charge minus heat pump cost:

Annual heat demand	Gas plus standing charge	Saving at SCOP 2.8	Saving at SCOP 3.0	Saving at SCOP 3.5
5,000 kWh	£551	£81	£112	£175
9,000 kWh	£905	£59	£116	£229
12,000 kWh	£1,171	£43	£118	£269
18,000 kWh	£1,702	£10	£123	£349

Disconnection takes planning and may carry a cost, so do not count it until it is arranged.

Break-even SCOP

The break-even SCOP is 2.97: below that, a heat pump costs more than a 90% efficient gas boiler to run at these prices. The calculation is 26.32 × 0.9 ÷ 7.97 = 2.97. It does not depend on heat demand, so it applies at 5,000 kWh and 18,000 kWh alike. If the gas standing charge is saved, the break-even falls to about 2.39 at 5,000 kWh, 2.62 at 9,000, 2.70 at 12,000 and 2.78 at 18,000.

What SCOP should a landlord expect? SCOP is the paper design figure, and real homes often do worse. In the DESNZ Electrification of Heat demonstration project, analysed by Energy Systems Catapult, the median measured seasonal performance factor of 428 air source heat pumps was 2.93 (interquartile range 2.67 to 3.19), on the report’s SPF H2 measure. The measured figure was below the designed SCOP in 91.9% of homes, by 0.66 on average. So 3.0 is a fair central case, 2.8 a realistic poor case, and 3.5 needs a well designed system. Treat 3.5 as a target to ask the installer to evidence, not a promise.

What moves the running cost: flow temperature, radiators and cylinder

Flow temperature is the biggest design lever: the lower the water temperature sent to the radiators, the more heat each unit of electricity produces. In the Energy Systems Catapult report, the median heat output per unit of electricity was 3.50 at a flow temperature of 35°C, 2.38 at 55°C and 2.02 above 65°C. The mean operating flow temperature across monitored air source pumps was 39.7°C.

• Radiator sizing. Lower flow temperatures need larger emitters. Radiators sized for a hot boiler may not heat a room at a lower flow temperature. The fix is bigger or double panel radiators, fan-assisted units or underfloor heating. A room by room heat loss calculation shows which are too small.
• Fabric first. A home that loses less heat needs less heat, which lowers every figure in the table and lets the pump run cooler. Loft insulation and draught proofing are often cheaper per kWh saved than any heating change.
• Hot water cylinder. Hot water is made hotter than space heating water, which lowers efficiency for that part of the load. A correctly sized cylinder set no hotter than needed keeps cost down. An electric immersion top-up costs 26.32p per kWh of heat, three times the cost of heat from a pump at SCOP 3.0. In the same project, some households chose to use the immersion heater rather than the heat pump for hot water.

Weather compensation, which adjusts flow temperature to the outside air, holds the flow temperature low. Ask the installer to leave it on and to explain it to the tenant. Ask also for the heat loss calculation, the design flow temperature and the SCOP expected for this property, not a brochure figure for a different house.

What a landlord should hand the tenant

A written handover note stops most running cost disputes before they start. Keep it short, plain and with the tenancy paperwork. It should contain:

• The make, model and location of the heat pump, cylinder and controller, with the installer’s contact details.
• The installer’s design flow temperature and expected SCOP, labelled as estimates, not guarantees.
• The heating schedule and room temperature the system was set up for, with a warning against switching it off and on through the day.
• A short explanation of weather compensation and why radiators feel warm rather than hot.
• What the tenant should not change, such as flow and cylinder temperature, and who to call if a setting looks wrong.
• When to use any boost or immersion function, as the installer specifies.
• An indicative running cost range with its assumptions: demand, SCOP and unit rates, plus a note that bills depend on weather, habits and tariff.
• The previous heating cost, where known, so the tenant can compare like with like.
• Who services the system, how often, and what the tenant pays, if anything.
• Where to find the commissioning certificate, warranty and manuals, and how to report a fault or a bill concern.

Invite the tenant to raise a surprising bill early. For the landlord’s side checklist, see before you install a heat pump in a rental.

Bill-shock risk and how to reduce it

Bill shock is a first winter electricity bill far above what the tenant expected. It is most likely when a home moves from gas to a heat pump with a SCOP near or below 3.0. In the 12,000 kWh example at SCOP 3.0 the pump uses about 4,000 kWh of electricity a year. A tenant who previously used 2,500 kWh would see electricity use more than double, even though the gas bill disappears, and most of the rise lands in the coldest months.

What raises the risk:

• A high flow temperature, which makes the pump behave like an expensive electric heater.
• A direct electric boost doing work the pump should do.
• Boiler-style habits: short bursts of heat suit a pump less than steady running.
• A tariff that does not suit the load. The cap figure is a standard variable rate. Some suppliers offer time-of-use or heat pump tariffs with cheaper periods, but rates and hours vary by supplier and region, so check current prices for the property. This guide does not model them.

What cuts it: a written estimate before the first winter, an installer check of flow temperature and weather compensation after the first cold spell, an early settings review, and comparing the tenant’s total energy spend before and after, not the electricity line alone. Poor fabric first is often right: see is a heat pump worth it for landlords.

A tenant on a low income in a poorly insulated home is at real risk of fuel poverty. A grant-funded heat pump that is expensive to run can leave them worse off, which is why the bill should be modelled, not only the installation cost.

When a heat pump is not the cheaper option

A heat pump is not the cheaper way to heat a home when its SCOP is below about 2.97 and the property stays on mains gas. At 12,000 kWh and SCOP 2.8 it costs £65 a year more than the boiler, before a capital cost the Energy Saving Trust puts at around £12,000 before any grant. Typical cases:

• A solid-wall home that needs a high flow temperature and has not been insulated or had radiators changed.
• A small flat on cheap gas, where heat demand is low and the saving in pounds is small.
• A home that keeps its gas supply, so the standing charge stays.

The case in those homes rests on other things: the Boiler Upgrade Scheme grant, a future EPC target, a boiler at end of life, or the tenant’s preference. Those are legitimate, but do not oversell running cost. See the cost page and the grant guide.

Next step

To test your own numbers, use the heat pump landlord calculator, or send an enquiry through the quote page and relevant independent firms contact you, with no charge to you and no obligation.