Heat pump tariffs explained

With the right combination of funding and energy tariff, a heat pump really can be the cheapest way to heat your home. By taking advantage of the £7500 government BUS grant to have a heat pump installed, and switching to the most appropriate electricity tariff, both the upfront installation cost and ongoing energy bills can be lower than a gas or oil boiler.

More heat pump tariffs are being launched so let’s look more closely at a few of them.

Using the Octopus Agile tariff, which charges according to demand based on the half-hourly energy price, the savings can be considerable. Using an average unit price of 21.57p/kWh, this would result in savings of £214 per year at SCoP 3.0 or £395 per year at SCoP 4.0, compared to running a gas boiler.

Your potential savings with OVO’s new Heat Pump Plus tariff could be even greater. This tariff offers a rate of 15p/kWh for the energy used by the heat pump only; a standard rate applies to all other energy use. Based on the OVO tariff, we calculate savings of £434 for a SCoP 3.0 heat pump, and £560 for SCoP 4.0, compared to running a gas boiler.

Now, EDF has launched a heat pump tariff that will never charge customers more than the price cap. The new EDF Heat Pump Tracker tariff is available to new and existing customers with any heat pump technology. Heat pump users that switch to the tariff will save at least £164 against standard variable tariffs, with greater savings for shifting consumption to the off-peak windows.

The tariff offers fixed discounts or three years and six hours of discounted zero carbon electricity every day. With two off-peak windows from 4am – 7am and 1pm – 4pm, customers can shift their consumption without the burden of any peak rates. With off-peak discounts applying to all electricity usage in the home, customers can benefit from unit rates which are cheaper than the price cap for all appliances.

The announcement responds to recent research conducted by EDF which shows that 67% of households are seeking greater control over their energy costs, with 42% of those without an air source heat pump admitting they have concerns about their current heating systems. The top causes for concern include rising costs (71%) and environmental impacts (40%). When the time comes to replace heating systems, 55% would consider monetary savings on their bills as the most important factor in their decision to switch.

For more information on heat pump grants or tariffs, please email hello@ohmenergy.co.uk.